On Nov. 19th, NCOIL (National Conference Of Insurance Legislators) approved landmark model language regarding life settlement disclosures. These aren't the disclosures you are thinking of. In fact, the model act requires life insurance carriers to notify clients that life settlements are an option when a policy is about lapse or be surrendered. Five states have similar requirements on the books already, but this new model act means the requirement probably coming to your state very shortly.
As you can imagine the carriers fought tooth and nail against this. However, the law is seen as very consumer friendly and passed easily. What is interesting is that a number of captive carriers, such as Farmers Insurance, prohibit their agents from participating in or even recommending a life settlement to clients. This new model act makes that type of policy an unfair trade practice.
We expect agents and producers to have many more life settlement discussions with clients as this model act takes hold around the country. Hopefully the insureds will benefit in the end from the additional awareness.
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