NU Online News Service

Members of the National Association of Insurance Commissionersplan to wait at least until June to vote on adopting model changesthat could affect the "stranger-owned" life insurance market.

The executive committee of the NAIC, Kansas City, Mo., and theplenary--the body that represents all voting NAIC members--wereready to consider proposed changes to the Viatical Settlement ModelAct here at the group's spring meeting.

But regulators decided to revise the model changes to ensurethat they comply with the National Bank Act and theGramm-Leach-Bliley Financial Services Modernization Act, accordingto North Dakota Insurance Commissioner Jim Poolman.

The revisions are being added to a bill now in the North Dakotalegislature, and they also would be added to the model act, Poolmansaid.

Poolman has led efforts to update the NAIC's viatical model toaddress STOLI, or arrangements in which investors help consumerspay for life insurance policies in exchange for a share of thedeath benefits.

Commissioners expressed support for the STOLI update effort andasked that any changes in the update be narrow in scope.

The delay in consideration of the changes by the NAIC'sexecutive and the plenary will "give everyone a little more time tolobby," Poolman quipped.

"I am very disappointed with some of the lobbying taking place,"Iowa Commissioner Susan Voss said. "I hope in the future we cankeep discussions at a professional level."

The life insurance industry supports the model update draft, andthe life settlement and premium finance industries oppose it.

Representatives from all 3 industries have been lobbying theConnecticut and North Dakota legislatures on the update.

Frank Keating, president of the American Council of LifeInsurers, Washington, urged during a March 6 hearing that membersof the North Dakota House adopt a bill that resembles the currentNAIC draft.

Michael McRaith, Illinois insurance director, said he was notsure why the bank amendments were not addressed during theexecutive and plenary session.

"This is a very serious consumer issue and we need to deal withthis promptly," McRaith said. "This is not an efficient way, in myopinion, to operate."

During a Life Insurance and Annuities Committee session, JulieMcPeak, the chair, said she would like to have a revised modelupdate ready for consideration by the executive and plenary inJune.

McPeak said she is "interested in keeping the amendments to aminimum" but will consider "constructive, substantive amendments"in addition to the bank amendments.

McPeak noted that she "has not seen any additional amendmentsthat make more sense" than the language in the current draft.