Washington — Legislators in California have passed Senate Bill 1543, which aims to restrict abuses of stranger-originated life insurance (STOLI).
S.B. 1543 is based on a model law developed by the National Conference of Insurance Legislators (NCOIL), which is the association of state representatives and senators with insurance oversight responsibilities. S.B. 1543 establishes a statutory definition of STOLI and classifies it as a fraudulent act. It also allows the California Insurance Department to collect information from life settlement providers that will help it monitor the market and identify STOLI.
“STOLI is an ugly and twisted transaction that undermines the integrity of the life insurance marketplace,” says Frank Keating, president and CEO of the American Council of Life Insurers. “We are very happy the legislature has approved a bill to give the California Insurance Department better tools to detect and crackdown on abusive STOLI transactions.”
Source: American Council of Life Insurers
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