NCOIL Posts Proposed Life Settlement Law

In July, when NCOIL reported that Crimm, a former insurance agency owner, was working on the model, he said he had never sold a life settlement.

But settlements are “a recognized option and should be included in the policy language, because it is legitimate,” Crimm said at the time.

The draft calls for each state’s insurance commissioner to provide a model notice. “The notice shall be developed at no cost to insurers or other licensees and shall be written in lay terms,” according to the draft text.

In addition to telling a policyholder about the life settlement option, the notice must tell the policyholder about other alternatives to letting a policy lapse, such as seeking an accelerated death benefit and assigning a policy as a gift.