Members of the California Senate voted 35-1 to approve S.B. 1543, a bill that would define “stranger-originated life insurance” and classify the creation of STOLI arrangements as a fraudulent act.
The California Assembly had already voted 76-1 to approve the bill.
The American Council of Life Insurers, the National Association of Insurance and Financial Advisors, and the Association for Advanced Life Underwriting, put out a statement welcoming the bill’s passage and calling for Gov. Arnold Schwarzenegger to sign it.
California state Sen. Michael Machado, D-San Joaquin, Calif., based S.B. 1543 on a model created by the National Conference of Insurance Legislators, Troy, N.Y.
At least 12 other states already have acted against STOLI arrangements, according to ACLI President Frank Keating.
By making S.B. 1543 law, California would “protect its senior citizens from the speculators whose only interest in them is their early death,” Keating says.