Life Companies, Agents, Brokers Strongly Support NAIC Panel Vote on Stranger-Originated Life Insurance
Contact
ACLI: Jack Dolan (202) 624-2418
jackdolan@acli.com
AALU: Tom Korb (703) 641-8120
korb@aalu.org
NAIFA: Lee Allen (703) 770-8112
leeallen@naifa.org
adp@wswdc.com
San Antonio, Tx, (Dec. 11, 2006) – The American Council of Life Insurers (ACLI), the Association for Advanced Life Underwriting (AALU), the National Association of Insurance and Financial Advisors (NAIFA), and the National Association of Independent Life Brokerage Agencies (NAILBA) strongly endorse the unanimous vote of the NAIC’s Life and Annuity (A) Committee to place restrictions on stranger-originated life insurance arrangements.
The life insurance industry offered particular praise to Committee Chairman and North Dakota Insurance Commissioner Jim Poolman for his leadership on the issue and advancing amendments to the NAIC's Viatical Settlement Model Act to address STOLI arrangements.
In STOLI arrangements, speculators who have no relationship to insured persons initiate coverage on older people and fund the premium payments for investment purposes and circumvent the intent behind state insurable interest laws.
It is the judgment of ACLI, AALU, NAIFA and NAILBA that the amendments approved by the NAIC effectively address STOLI while protecting life insurance taken out to benefit individuals, families, businesses and employees, as well as legitimate life settlements.
The NAIC panel voted to deter STOLI by prohibiting settlement of life insurance policies for five years from policy issuance when the policy is purchased for the purpose of selling it into the secondary market. However, the five-year prohibition would not apply if the insured, a family member or employer put up their own money or collateral to buy the policy. Other legitimate life insurance arrangements are also protected by the NAIC proposal.
The full NAIC is slated to act on the "A" Committee vote early next year.
About ACLI: The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association whose 377 member companies account for 91 percent of the life insurance industry’s total assets in the United States, 90 percent of life insurance premiums and 95 percent of annuity considerations. In addition to life insurance and annuities, ACLI member companies offer pensions, including 401(k)s, long-term care insurance, disability income insurance and other retirement and financial protection products, as well as reinsurance. ACLI's public Web site can be accessed at www.acli.com.
About AALU: The Association for Advanced Life Underwriting (AALU) is a nationwide organization of life insurance agents, many of whom are engaged in complex areas of life insurance such as business continuation planning, estate planning, charitable planning, retirement planning, deferred compensation and employee benefit planning. AALU represents approximately 2,000 life and health insurance agents and financial advisors nationwide. The mission of AALU is to promote, preserve and protect advanced life insurance planning for the benefit of its members, their clients, the industry and the general public. AALU's website can be accessed at www.aalu.org.
About NAIFA: Founded in 1890 as the National Association of Life Underwriters, the National Association of Insurance and Financial Advisors comprises 800 state and local associations representing the business interests of 225,000 members and their employees nationwide. Members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. NAIFA's mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members. NAIFA's website can be accessed at www.naifa.org.
About NAILBA: The National Association of Independent Life Brokerage Agencies (NAILBA) is a nonprofit trade association with 330 member agencies in the U.S., representing 100,000 producers who deliver more than one billion dollars in first-year life insurance premiums annually. NAILBA is dedicated to fostering the growth of its member agencies by providing educational resources, industry standards and a collective voice for legislative and regulatory efforts. Each of NAILBA’s members commits to a statement of responsibilities to ethically and responsibly serve their clients’ best interests. For more information, visit www.nailba.org.