Life Settlement License

A license and regulation update regarding Illinois.

Illinois state officials are supporting legislation that will allow new policies to be sold after two years as well as other provisions favorable to the settlement industry, according to Steve Washington, a representative of the Life Settlement Institute, a provider trade group.

The last of three meetings was held today among interested parties who have been discussing legislation to regulate life settlements in the state. Currently, Illinois only regulates viaticals.

“It’s a very friendly discussion,” said Washington, who has attended all the meetings. “The sponsoring legislators are generally trying to reach a compromise.”

Discussion today focused on how the Illinois law will define stranger-originated life insurance, on premium financing, and on reporting and disclosure requirements for providers.

The Illinois legislation is based largely on the model act developed by the National Association of Insurance Commissioners (NAIC), Washington said. But the Illinois legislation would include a two-year waiting period before new life insurance policies could be settled, instead of the five-year waiting period that the NAIC had proposed. The settlement industry opposes the five-year waiting period. In addition, provisions from the model law developed by the National Conference of Insurance Legislators (NCOIL) are being incorporated into the proposal.

“Obviously, the devil’s in the details,” Washington said. “We’ll see what’s ultimately produced in a revised draft. There are still some issues to resolve.”

Besides the Life Settlement Institute, there were other industry representatives at the meetings as well, including Coventry First and Pacifica. The life insurance industry was also present, represented by the American Council of Life Insurers (ACLI).

One of the legislators involved in the discussions, Sen. William Haine, introduced SB 2091 on life settlements Friday. The bill is considered a placeholder because it contains no details.

More details will be posted when we receive them…