Consumers’ rights received a boost last week when a key committee of the National Association of Insurance Commissioners
(NAIC) approved an amendment to that group’s Model Regulation (for settlements). The action came during the NAIC’s quarterly meeting in New York City.
The amendment approved by the Life and Annuities Committee clears the way for life insurance agents to act as viatical and life settlement brokers in their state of licensure, simply by virtue of their life license(s) and by notifying their state’s insurance department that they intend to act as a broker.
NAIC Model Acts and Regulations are developed to simplify and streamlinestate-level insurance regulation, by literally providing model regulations that can be adopted in whole or in part by states and U.S. territories. The Viatical (and Life) Settlement Model Act and Regulation has evolved over the last few years and has been adopted by a number of states already.
“We see this as a positive step,” said Doug Head, executive director of the Viatical and Life Settlement Association of America. “This amendment will bring the possibilities of our industry to more consumers; they may not have been aware of viatical and life settlement services, but now their life insurance agents will be able to work with them on a settlement, when such a
solution best meets the needs of the individual circumstances.”
Head refers to the fact that, with the exception of a few states, most
consumers had to be served by a viatical and life settlement broker, so there was no real incentive for life agents to take part in the chain of service, unless they wanted to take the time and effort to become licensed.
The Model Regulation, including this amendment, is expected to be approved at the NAIC’s next quarterly meeting, June 12-15 in San Francisco. “This amendment reflects the trend among the states,” Head said, “and, in fact, a number of them have already put a provision like this in place. And, many commissioners I spoke with at the New York meeting say the amendment is
consistent with the goals of uniformity and reciprocity included in both federal and state (life insurance) producer laws.”
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