The Ohio Department of Insurance has withdrawn its call for detailed information about life settlement deals completed by brokers doing business in the state.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 information about their completed deals, known as a data call, was onerous and overreached the DOI’s authority. Some settlement producers also argued that providing the requested information could subject them to lawsuits by clients for revealing confidential data.
“After due consideration, the industry has raised some issues that we believe we should consider,” the state DOI said in an e-mail to settlement brokers issued just days before the regulation was to go into effect March 1. “We will meet with industry representatives and discuss those issues and formulate a data call with the industry’s input.”
Brokers had protested that the data call, issued in January 2009, would have demanded a burdensome amount of information and even covered settlement deals completed outside of Ohio.
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The Ohio DOI sent the form, a “self-audit data call” to settlement brokers in January, asking for more than 90 data elements about their completed settlement contracts, including the name and addresses of the insured, date of birth, whether chronically or terminally ill, and life expectancy, along with information about the original life policy, including the time elapsed between the purchase of the policy and its sale.
It also asked about the settlement provider, the source of life expectancy projections, the agent writing the original policy, investors in the settlement, and the company financing each deal.
A number of brokers at the recent Life Settlement Summit in Orlando, Fla., complained bitterly about Ohio’s demand, although some reported the state had given them a 30-day extension to comply before it announced its decision to withdraw the data call. Some participants at the conference, sponsored by National Underwriter, Cincinnati, Ohio, and its parent, Summit Business Media Inc., expressed fear they could lose their license in Ohio if they failed to meet the demand.
“You have to break a law to comply with the law,” said one speaker, Rob Haynie, managing director of Life Insurance Settlements Inc., Fort Lauderdale, Fla. He argued that complying with the state’s call for data could violate the Health Insurance Portability and Accountability Act, which prohibits the disclosure of confidential health information about customers.
Another speaker, Kathleen A. Birrane, general counsel for Maple Life Financial Inc., Bethesda, Md., noted that companies submitting the data also had to provide an affidavit attesting to its accuracy.