Ralph Simoni, a lobbyist for California Life Settlement Association, says the group opposed a life settlement law recently enacted in the state because it lacks consumer protections.
The new law, California Senate Bill 98, regulates life settlements and imposes a ban on stranger-originated life insurance policies in the state.
CALSA members believe the bill was weak in its requirements that life insurers notify policy holders that life settlements are an alternative to lapsing or surrendering their policies, Simoni says.
“The bill requires them only to notify people that they are options and should consult a financial planner,” says Simoni, who works for the lobbying firm California Advocates Inc., Sacramento. “It doesn’t say explicitly that life settlements are an option. The language is buried in renewal notices.”
CALSA maintains policy holders should be notified of the settlement alternative at “essential trigger points,” such as when the owner turns age 65, when the policy is about to lapse or when the owner seeks to surrender the policy for its cash value, according to Simoni.