A charge to explore stranger originated/owned annuities was approved by state insurance regulators during the spring meeting of the National Association of Insurance Commissioners, Kansas City, Mo., here.
The vote took place during the NAIC’s Life Insurance and Annuities ‘A’ Committee on March 27. The charge reads: “…explore the issue of stranger originated/owned annuities, how these transactions may interact with insurable interest laws and the impact of this activity on consumers with respect to any appropriate regulatory action in the form of revisions to the Viatical Settlements Model Act (#697), a new model or other appropriate regulatory response. Important.”
Brenda Cude, an NAIC funded consumer advocate and professor of the University of Georgia, recommended to the ‘A’ Committee that NAIC buyers’ guides and literature be reviewed to reflect new issues that the market now faces. And, Doug Head, executive director of the Life Insurance Settlement Association, Orlando, Fla., also recommended that the NAIC compendium of laws on viatical settlements be examined to reflect changes both to life settlement models and laws.
A decision was made not to change the charge but to separately examine changes to the buyers’ guides, Tom Sullivan, Connecticut insurance commissioner and ‘A’ Committee chairman, said. Sullivan said that a public hearing to address the issue of stranger originated/owned annuities will be held in Washington on May 20. Sullivan said that he and other members on the ‘A’ Committee look forward to hearing from consumers, insurers, the life settlement industry and anyone else who wants to speak on the issue. “But the real people I want to hear from are consumers who were victimized,” he added. Once regulators have the hearing, “we will tease out the issue and see what the next step should be.”