developments selling life insurance
Washington Gov. Chris Gregoire signed life settlement legislation today, becoming the third governor to approve a law regulating the market this legislative season.
SB 5195, which allows new policies to be sold after two years, is based largely on model legislation developed by the National Conference of Insurance Legislators (NCOIL). This is the first time the state of Washington has regulated the market. Until now, it had only regulated viaticals.
“This is an excellent bill,” said Doug Head, executive director of the Life Insurance Settlement Association (LISA). “This is a first in the nation with mandated disclosure by insurers of the settlement option.”
The bill requires carriers to tell policyholders who are age 60 or older, or who are terminally or chronically ill, that they have other options if they’re thinking of surrendering or lapsing their policies or of seeking accelerated death benefits.
The law also requires the state insurance department to prepare a document to be used by insurers to let insureds know that alternatives exist to lapsing policies. The legislation doesn’t require insurers or the department to specifically mention life settlements, however.
Head said that Washington Insurance Commissioner Mike Kreidler is “very aware of the settlement option.”
In an April 9 letter to the governor, Kreidler said that “life insurance companies are required to disclose information about life settlements to policyholders, so that consumers are provided with fair and reliable information to use when making decisions regarding the disposition of their life insurance policies.”