NCOIL Marks Up Life Settlement Model

State lawmakers gathered in Chicago Thursday to fine-tune the language of a proposed life settlements model act.

Members of the National Conference of Insurance Legislators, Troy, N.Y., hope to adopt the model in November, at NCOIL’s annual meeting.

Participants in the Chicago work session included about 40 lawmakers, regulators, life insurance and life settlement company executives, according to Mike Humphreys, NCOIL director of state-federal relations.

Representatives from the North American Securities Administrators Association, Washington, offered a number of suggestions about model details.

After reviewing NASAA suggestions, NCOIL members deleted references in the NCOIL draft to terms such as “life settlement purchase agreement” and “life settlement investment agent.”

NCOIL members also deleted all of Section 14 of the draft, which dealt with false representations and deceptive words, Humphreys says.

NCOIL members deleted the section because they now believe the provisions “relate solely to the regulation of the securities side of life settlement transactions,” Humphreys says.

The work session participants also rejected some NASAA suggestions.

NASAA had recommended that NCOIL delete references in the life settlements model to financing entities, financing transactions and special purpose entities.

NCOIL kept the reference because the terms are used almost exclusively as carve-outs from certain restrictions, and because there is general agreement among interested parties that “the references needed to remain in the model act,” Humphreys says.

“These references are a part of current settlements regulation across the nation,” Humphreys says.