The National Conference of Insurance Legislators has passed a life settlement model draft that includes a definition of stranger-originated life insurance.
The full executive committee of NCOIL, Troy, N.Y., voted unanimously to approve the model during NCOIL’s recent annual meeting in Las Vegas.
Earlier, NCOIL’s life insurance and financial planning committee approved the model by a unanimous vote.
At NCOIL, unlike the National Association of Insurance Commissioners, Kansas City, Mo., the executive committee can approve models on behalf of the entire organization, without putting the model up for a vote by an organ that includes all of the organization’s voting members.
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North Dakota state Rep. George Keiser, R-Bismarck, N.D., who spearheaded development of the model, said all parties involved had to make concessions.
Representatives of life insurers, life settlement companies and institutional investors spent between 30 and 40 hours on conference calls and in all-day sessions to find a way to include a STOLI definition, Keiser said.
The NCOIL model is an alternative to an amended viatical settlements model adopted earlier this year by the NAIC.
A major difference between the two models is the length of time a policyholder is prevented from settling a policy.
The NAIC model would impose restrictions for 5 years and creates exceptions for a number of life-changing events, such as divorce.