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States Tackle STOLI

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Three states have recently adopted bills that seek to eliminate stranger-originated life insurance.

Nevada Gov. Jim Gibbons, R, has signed S.B. 426, and Vermont Gov. Jim Douglas, R, has signed H. 222.

The Nevada and Vermont bills limit the ability of policyholders to sell policies within 5 years after they have purchased the policies, according to the American Council of Life Insurers, Washington.

In Minnesota, Gov. Tim Pawlenty, R, has signed S.F. 166, a bill that imposes restrictions on selling policies within 4 years after purchase.

The ACLI, Washington, and the National Association of Insurance and Financial Advisors, Falls Church, Va., both applauded the bills.

The ACLI says 21 state legislatures have enacted anti-STOLI laws.