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May 30, 2008 at 01:09 PM
Members of the Ohio Senate voted 95-0 Thursday to approve H.B. 404, a bill that seeks to discourage use of stranger-originated life insurance arrangements in Ohio.
Members of the state General Assembly voted 89-0 to approve H.B. 404 in January.
The bill would limit consumer’s ability to settle life insurance policies within 5 years after buying the policies, but it would permit consumers to sell policies during the 5-year period if they had gone through a major life change, including the death of the sole beneficiary of the policy.
The bill also would permit policyholders to settle policies within 5 years if they could certify that they used their own money to buy coverage and had no agreement to settle the coverage with 2 years of buying the coverage.
Another bill provision would require life insurers to notify state regulators if they suspect a life insurance sale may be a STOLI transaction.
Ohio Department of Insurance Director Mary Jo Hudson has welcomed passage of the STOLI bill.
“The department fully supports the legislature’s efforts and will implement new protocols to comply with consumer protections proposed in this bill,” Hudson says in a statement.
