As a national group of insurance legislators prepares to vote on a life settlements model act, state records indicate that several members have taken campaign contributions from stakeholders in the model’s development and passage.
The National Conference of Insurance Legislators, Troy, N.Y., is in the final stages of developing its ‘Life Settlements Model Act.’ It is the hope of legislators developing the model that it can be voted through NCOIL at its annual meeting in Las Vegas in November, George Keiser, chair of the Life Settlements subcommittee, recently told National Underwriter.
Life settlements are the sale of life insurance policies to a third party. The issue has taken on considerable import because of recent variations on the initial concept of life settlements that involve the purchase of life policies with the intent to at some point in the near future settle them.
Filings listed on state websites indicate that several members of the subcommittee have accepted campaign contributions from stakeholders in the model’s development.
Records show that 4 members of the 11 member subcommittee developing the life settlement model law have accepted campaign contributions from parties that could be affected by the model.
The state legislators are: Rep. Robert Damron, Ky.; Rep. Robert Godshall, Pa.; Sen. Ralph Hudgens, Ga.; and Sen. James Seward, N.Y.
State election websites indicate the following campaign contributions:
–Rep. Damron–received 2 campaign contributions from Alan Buerger, CEO of Coventry First, Fort Washington, Pa. The first contribution was made on Nov. 14, 2005 for $1,000 with a second donation of $1,000 following on Aug. 14, 2006. A $1,000 donation was also made by Constance Buerger, CFO of Coventry First on Nov. 14, 2005.
–Rep. Godshall–A $1,500 donation was made by Alan and Constance Buerger on April 17, 2007. On the same date, a $1,000 contribution was made by Michael Freedman, listed as senior vice president of Coventry First.
–Sen. Hudgens–A $1,000 campaign contribution was made by Coventry First on Oct. 11, 2005. On Dec. 2, 2005, a $500 campaign contribution was made by Prudential Financial, Newark, N.J., and, on Dec. 5, 2005, the American Council of Life Insurers, Washington, made a $500 campaign contribution.
–Sen. Seward–2006 donations from the Life Insurance Council of New York, totaled $6,697.44; 2005 LICONY contributions totaled $6,000; and a $2,000 contribution from Habersham Funding LLC, Atlanta, was made on Oct. 20, 2006.
NCOIL and legislators responded to questions about the contributions. Susan Nolan, NCOIL executive director, said the group has no policy on recusals nor does it have a conflict of interest policy because each state legislator is bound by that legislator’s state campaign and ethics laws. She said she could not predict whether NCOIL would develop a conflict of interest policy at some point in the future.
Keiser, chair of the life settlements subcommittee, is not listed on his state’s website as taking contributions from stakeholders, but he did comment on the issue. During an election cycle, he said, it is usual for a legislator to receive legal contributions from entities that are involved in work on committees he works on. But, he continues, it would never affect a vote.
Keiser and several other legislators distinguished between regular election cycle contributions and excessively large contributions in off-election cycle years.
Keiser says he believes in the integrity of the other legislators on his subcommittee and does not think that it would impact the model’s development.
Damron responded by saying that all donations followed Kentucky law and that in the last election cycle he had raised approximately $150,000. Damron notes that he has taken contributions from a variety of parties in the industry and that it would “not at all” affect his vote.
Damron said he believes consumers should have the right to settle their contracts and that if a contract is surrendered or lapses, the true value is not realized. The NCOIL model is a “pretty good model,” he asserted.
Hudgens said he has taken legal contributions from stakeholders including a recent $1,000 contribution from the National Association of Independent Life Brokerage Agencies, Fairfax, Va., in June. He said he raised approximately $125,000 to $130,000 in the last election cycle.
He also confirmed that he had accepted a flight on Coventry’s private jet in order to reach an NCOIL meeting last year on life settlements at Crystal City, Va. Hudgens explained that the Georgia senate session had met until after midnight and when asked if he would be able to attend the NCOIL meeting, he had responded that it would be impossible. He said Coventry had maintained that it was important for legislators to be at the session which started in the morning and had offered him transportation. Without such transportation, he said, it would have been impossible for him to participate.
At press time, Rep. Godshall and Sen. Seward could not be reached for comment.