Agree, yet disagree.On behalf of the Life Insurance Finance Association, I would like to agree yet disagree with Bruce Ferguson's assessment of the work on the NAIC NAIC See National Association of Investors Corporation (NAIC). Viatical Settlements Model Act. (See "NAIC 2006 Models Could Spark Debate in Legislatures" on page 14.) The Life Insurance Finance Association represents the Life Insurance Premium Finance Industry, and other life insurance, financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against and loan professionals who support that industry. Life insurance premium loans enable consumers to purchase and maintain valuable life insurance coverage for their family and business needs. We are not in the viatical vi·at·i·cal adj. 1. or vi·at·ic Of or relating to traveling, a road, or a way. 2. Of or relating to a contractual arrangement in which a business buys life insurance policies from terminally ill patients for a percentage or life settlements market, but were involved in the drafting as premium finance became the focus of the work of the regulators, rather than the real issue: insurable interest A right, benefit, or advantage arising out of property that is of such nature that it may properly be indemnified. In the law of insurance, the insured must have an interest in the subject matter of his or her policy, or such policy will be void and unenforceable since it . We agree with and worked directly with the ACLI ACLI American Council of Life Insurers ACLI Associazioni Cristiane Lavoratori Italiani (Italy) ACLI American Council of Life Insurance ACLI Ada Command Language Interpretation and the NAIC to close the loophole on stranger-initiated life insurance. We are very concerned about these transactions, and our members work with insurers to ensure that insurable interest exists and that the fraudulent transaction is never funded. The impetus for LIFA's formation was the need for life insurance premium finance professionals actively to promote and embrace standards for "best business practices" and assist policymakers, insurance carriers and the public in understanding and differentiating legitimate premium finance transactions from schemes merely cloaked as premium finance transactions that violate insurable interest, anti-rebating, anti-inducement or other insurance laws. After the New York Department of Insurance Office of General Counsel's Opinion, LIFA LIFA Licensed International Financial Analyst LIFA Latino Immigration Fairness Act (USA) met with the General Counsel and staff and were requested to help identify legitimate premium finance transactions. In response to this and other requests, LIFA released the Statement of Best Practices for the Life Insurance Premium Finance Industry. We were working to find a common ground with the ACLI and the life insurance producer trade associations which were working through or with the ACLI in connection with the work on the NAIC model. We believe that these trade associations and LIFA, as well as the Life Insurance Settlement Association, really do want to end the sale of stranger-initiated life insurance. However, we urged all parties not to adopt the NAIC draft, as it failed to address or stop the sale of stranger-initiated life insurance. We also urged our life insurance colleagues in the other trade associations and those that they represent to review the issues in connection with the movement of the ownership of a trust. Such programs may place undue financial hardships on insurance producers while putting their licenses at risk. In addition, the Model, as it currently stands will have the unintended impact of including the insured in a scheme such that they may unknowingly be aiding and abetting a·bet tr.v. a·bet·ted, a·bet·ting, a·bets 1. To approve, encourage, and support (an action or a plan of action); urge and help on. 2. a fraud on the insurer. We strongly believe that this Model will actually embolden em·bold·en tr.v. em·bold·ened, em·bold·en·ing, em·bold·ens To foster boldness or courage in; encourage. See Synonyms at encourage. those that create these stranger-initiated life-insurance programs by allowing a loophole to legalize le·gal·ize tr.v. le·gal·ized, le·gal·iz·ing, le·gal·iz·es To make legal or lawful; authorize or sanction by law. le the now illegal activity by sidestepping the issue of insurable interest. Scott J. Cipinko Executive Director Life Insurance Finance Association |
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