Florida Office of Insurance Regulation Reports on Secondary Life Insurance Market Protections
Dec 2, 2013
Pursuant to legislation enacted this year, the Florida Office of Insurance Regulation (“OIR”) released a report today, December 2, 2013, in which it reviewed Florida law and regulations to determine whether there are adequate protections for purchasers of life insurance policies in the secondary life insurance market to ensure that this market continues to exist for Florida seniors.
To view the report, click here.
In preparation for the creation of this report, the OIR held an informational public hearing on October 25, for which accepted materials and comments, and surveyed Florida life insurance companies.
Based on the evidence and testimony provided at the hearing, the OIR concluded that Florida appears to afford adequate protections for purchasers of life insurance policies in the secondary life insurance market.
In the report, however, the OIR states that ” . . . legislative changes proposed (at the hearing) . . . appear to be proposed in order to address the actions of a small handful of insurance companies. The courts are addressing these issues based on the fact-specific circumstances of each case, and there is a significant concern that enacting these legislative changes may have the unintended consequence of encouraging STOLI (Stranger-Oriented Life Insurance) and fraud. The treatment of life insurance solely as a commodity from inception is at odds with the purpose of life insurance and may have negative ramifications for the industry, to the detriment of Florida consumers, life insurance companies, and the legitimate viatical settlement industry.”
According to the OIR, some related issues have been identified that may merit further investigation administratively, but the agency has no recommendations for legislative action at this time.
To go directly to the OIR’s Web page on the October 25 public hearing, click here.
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