North Dakota lawmakers have approved H.B. 1284, a bill that would strengthen a state law prohibiting stranger-originated life insurance transactions.
The bill, H.B. 1284, would define a STOLI arrangement as a fraudulent transaction in which financial speculators persuade a senior to buy life insurance with the specific intention of transferring the death benefits to the speculators.
The bill also would require life settlement providers to give cost information and other relevant information to seniors considering life settlement transactions, and it would require life settlement providers to submit information about their deals to the state insurance department.
The bill would permit life insurers to ask policy application questions designed to help underwriters detect STOLI transactions.
Another bill provision would restrict use of some premium-financing arrangements typically associated with STOLI.
The bill, approved by both the North Dakota House and the North Dakota Senate without dissent, was sent to Gov. John Hoeven, R, for his signature.
One of the sponsors of H.B. 1284 is George Keiser, R-Bismarck, N.D., the vice president of the National Conference of Insurance Legislators, Troy, N.Y.