The market for resale of life insurance policies owned by seniors, known as life insurance settlements, has dramatically increased over the past several years. However, along with the increase of sales has been the regularity of fraud. That is why 27 states, including Idaho, have passed legislation to protect the owners of life insurance policies, reports the Idaho Press-Tribune.
As mentioned in the article, The Life Settlements Act added new portions to Idaho Code, which establishes many protections for the seller of the policy, including required licensure of the senior life settlements insurance provider (the individual or firm purchasing the policy) and the life settlement broker (the individual marketing and negotiating the sale of the policy who works for the policy owner).
In addition, the act requires that all life insurance settlement contract forms, disclosures and advertising be filed with the Department prior to use in Idaho.
“An important part of the legislation makes it illegal to engage in stranger-originated life insurance (STOLI) transactions,” said Bill Deal, director of the Idaho Department of Insurance. A STOLI is a plan to initiate a life insurance policy for the benefit of a third party investor who has no insurable interest in the insured.”
