In the ongoing debate over life settlements, another volley has been fired. Kentucky state representative Ronald Crimm (R-Louisville) has drafted a model bill that would require some policy owners to be told about the option to take a life settlement when considering terminating or cashing in a policy, according to a story by the NU Online News Service. The National Conference of Insurance Legislators (NCOIL) has posted the draft online.
The American Council of Life Insurers (ACLI) is opposed to such a requirement, saying that it would apply only to a very small number of policyholders. But Crimm, who formerly owned an insurance agency, said that, as a viable option, life settlement ought to be disclosed.
The draft requires that, in addition to life settlements, policyholders must also be told about other options, such as accelerated death benefits and the assigning of a policy as a gift. Each state’s insurance commissioner is tasked by the draft to produce the disclosure statement “at no cost to insurers or other licensees and . . . written in lay terms.”
NCOIL’s Life Insurance and Financial Planning Committee could consider the draft on November 19.