ORLANDO, FL -- 04/11/08 --
The Life insurance Settlement Association
(LISA) applauded Maine and Kentucky for enacting targeted legislation to
address Stranger Originated Life Insurance (STOLI), an illegal practice
that violates state insurable interest laws. These states rejected the
anti-consumer legislation being promoted by life insurance companies and
some state regulators that would take away the American citizens'
long-standing property rights in life insurance. The Maine legislature
adopted direct and clear measures that focus on Stranger Originated Life
Insurance while supporting the existing Maine life settlement law.
Likewise, the Kansas Legislature rejected efforts to re-write that state's
settlement law using the highly criticized and controversial Model Act of
the National Association of Insurance Commissioners (NAIC). The Kansas
bill is on its way to the Governor. Along with Kentucky legislation signed
by the Governor of that state this week, both the Kansas and Maine bills
are based entirely on model legislation developed by the National
Conference of Insurance Legislators (NCOIL).
According to Doug Head, Executive Director of LISA, "The best solutions to
the problem of Stranger Originated Life Insurance are to be found in
measures that aid in the detection, prevention and enforcement of improper
practices that occur at the origination of the insurance contract.
Attacking the right of policy owners to assign their policies is the wrong
approach. That approach has now been rejected by Kentucky and Maine, among
others," said Mr. Head, also citing recent legislation in Arizona. LISA
has opposed the five-year ban on the assignment of life insurance, adopted
in a cloud of controversy and scandal at the NAIC. "The NAIC approach is
an indirect attack on STOLI but directly attacks consumers and their
property rights in life insurance," explained Mr. Head. The NAIC Model Act
has been criticized by the NAIC's own funded consumer representatives,
state legislators and even members of the NAIC for failing to address STOLI
and for harming consumers.
"LISA supports direct methods which focus on the perpetrators of STOLI who
seek to violate state insurable interest laws." Mr. Head continued, "Laws
should enable carriers, agents and life settlement companies to stop STOLI,
but never in the history of the United States has there been an assault on
the rights of consumers who have acquired life insurance policies in good
faith and want to exercise those rights lawfully. We think most policy
makers will understand that this is the right way to deal with this, as
have the practical legislators of Kansas and Maine."
Established in 1994, the Life Insurance Settlement Association is the
oldest and largest trade organization in the industry. Its goal is to
promote the development, integrity, and reputation of the life settlement
industry, and to promote a competitive market for the people it serves.
LISA now represents 173 members with a wide variety of interests in the
industry. For more about the Association, visit www.lisassociation.org.
Contact:
Doug Head
LISA Executive Director
PH: 407-894-3797
Email Contact
