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Panel Adopts Report on Life Settlements.

The Life Insurance and Annuities Committee of the National Association of Insurance Commissioners unanimously adopted a report that would outline state regulation of life settlements, the practice of healthy insureds selling their life insurance policies to investors for cash.

The committee's action means the updated model act contained in the report is likely to be approved by the full NAIC in March, Massachusetts Commissioner Linda Ruthardt said. It would then be up to individual states to adopt the model as law.

The report proposes an addition to the Viatical Settlements Model Act, which was adopted in 1993 and extensively amended in 1998. Under the proposal, life settlements would be added to the definition of viatical settlements, so the model would cover any sale of a life insurance policy for less than its face amount. The viatical business sprouted when parties began buying the policies of the terminally ill at a discount to face value. Since then, the terminally ill business has fallen, but the life settlement business has exploded.

The Viatical Settlements Working Group, which drew up the proposal, also included sections on fraud prevention and control and on criminal and civil remedies.
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Comment:Panel Adopts Report on Life Settlements.
Publication:Best's Review
Article Type:Brief Article
Geographic Code:1USA
Date:Jan 1, 2001
Words:193
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