Amendments to the National Association of Commissioners (“NAIC”) Viatical Settlements Model Act continue to work their way towards final consideration by the NAIC. Last December, the Life & Annuities (A) Committee approved a package of amendments and sent the proposal to the Executive Committee for review. The proposed amendments included a five-year general prohibition on settlement of a policy after issuance. Early this year, the Executive Committee sent the proposal back to the (A) Committee so that the committee could consider comments received from federal banking regulators expressing concern that the amendments might interfere with the lending practices by banks authorized under federal law. In April, the (A) Committee approved revisions to the amendments to address these concerns but left in place the five-year prohibition on settlements.
In May, the (A) Committee met again to review amendments, this time to consider whether they were consistent with new NAIC standards for model laws. The new standards require the committee with jurisdiction over a particular subject matter and the Executive Committee to conclude that a proposed new model or amendments to an existing model meet the following criteria: (1) that the subject of the model law (or proposed amendments) necessitates a national standard and requires uniformity among all states; and (2) that NAIC members are committed to devoting significant regulator and association resources to educate, communicate and support the model or amendments. By conference call on May 16, the (A) Committee voted again to approve the amendments and sent them back to the Executive Committee for review. The Executive Committee is expected to take up the amendments at the NAIC National Meeting in June.
Meanwhile, the National Conference of Insurance Legislators (“NCOIL”) is considering amendments to its own Life Settlements Model Act. At a meeting in April, NCOIL’s Subcommittee on Life Settlements approved a number of proposed changes to the NCOIL model, including a five-year general prohibition on life settlements similar to the prohibition adopted by the NAIC (A) Committee. Consideration of amendments to the NCOIL model will continue at the NCOIL Summer Meeting in July.
Joe Holahan is Of Counsel in Morris, Manning & Martin’s Washington, D.C. office and is Director of the firm’s Terrorism Insurance Group. His areas of experience include privacy and data security, compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), state and federal insurance regulation, and managed care. He received his bachelor’s degree from University of Virginia and his law degree from Catholic University of America, J.D., 1990.