The Ohio Department of Insurance today withdrew its call for detailed information about life settlement deals completed by brokers doing business in the state.
The action was in response to complaints from a number of brokers that the demand for market information, known as a data call, was onerous and overreached the Ohio department’s authority. Some settlement producers also argued that providing the requested information would have put them in the position of being sued by clients for revealing confidential data.
“After due consideration, the industry has raised some issues that we believe we should consider,” the Ohio department writes in an electronic mail sent today to settlement brokers. “We will meet with industry representatives and discuss those issues and formulate a data call with the industry’s input.”
Brokers had complained that the data call, issued in January, demanded too much information, even for settlement deals completed outside of Ohio.
“It is in our best interest not to be put in position to be sued by clients whose private information could be given,” says Rob Haynie, managing director of Life Insurance Settlements Inc., Fort Lauderdale, Fla.
Information sent to the state might be used by opponents of life settlements, who might “twist it to their advantage” to help write state laws that could limit the right of insureds to sell their policies, Haynie says.
The Ohio department sent the form, a “self-audit data call,” to settlement brokers in January.
The department asked for about 90 data elements relating to completed settlement contracts, including the name and addresses of the insured, date of birth, whether the insured was chronically or terminally ill, and the insured’s life expectancy, along with information about the trustees and providers involved in each contract.
The data call was authorized under market conduct provisions of Chapter 3905 of the Ohio insurance law, officials say.
Information supplied in response to the call would have been reviewed by the Ohio department’s market regulation division, a department representative says.