State insurance legislators tackled emerging issues including annuity sales to investors, the possible re-opening of a life settlement model and property-casualty issues including steering and after-market crash parts.
The issues were addressed during the spring meeting of the National Conference of Insurance Legislators, Troy, N.Y. in Charleston, S.C. The meeting drew 255 attendees and runs from March 5-7.
State Rep. Robert Damron, D-Nicholasville, Ky., NCOIL’s president, says that there was discussion about separating the after-market parts issue from the issue of steering policyholders to insurer favored body repair shops. Those issues were deferred until the July summer meeting in Boston on July 8-11.
On the life insurance side, he added, the right to sell annuity guarantees on the secondary market was discussed as well as the possibility of re-opening the Life Settlements Model Act to reflect the possible need for an update given the laws that are being put in place in many states.
Whether the annuity issue will be incorporated into any changes to the life settlement model or will be treated as a separate model will be determined during the July meeting, he adds.
Damron noted that producers are the ones who are selling annuities and insurers have not been performing underwriting on those annuities. So, companies which are seeing annuities and their riders re-sold to investors are being impacted not only by the resale but also by the commissions they are paying producers on annuities sold.
The Life and Financial Planning session this morning included a presentation from Larry Kosciulek, director of the Financial Industry Regulatory Authority (FINRA), in Baltimore, Md., discussed life settlement activity as it relates to variable life and annuities policies as well as how FINRA has treated life settlements since 2006.
Following Kosciulek’s presentation, state Rep. Brian Kennedy, D-Hopkinton, R.I., detailed the purchase of variable annuity products on terminally ill individuals so investors could profit once the individual died. It was agreed that more information is needed. Oklahoma Insurance Commissioner Kim Holland, secretary-treasurer of the National Association of Insurance Commissioners, Kansas City, Mo., detailed a planned hearing on the issue in New York on May 4 (see story on interview with Connecticut Insurance Commissioner Tom Sullivan below posted on March 4.)
Georgia state Senator Ralph Hudgens, R-Hull, Ga., discussed his concerns over insurance producers who are prevented by insurers from discussing the life settlement option. The issue will receive more discussion at NCOIL’s July meeting.