The New OHIO STOLI Law
Tuesday, June 17th, 2008 8:18 amThe following is a newsletter put out by National Underwriter on STOLI (Stranger Owned Life Insurance).
BY MATT BRADY
Washington Bureau — NU Online News Service, June 12, 2008, 5:07 p.m. EDT
Ohio Gov. Ted Strickland today signed into law a bill that was written in an effort to root out stranger-originated life insurance.
The new amendments to Ohio insurance law “recognize a shared responsibility of the life settlement industry, life insurance companies and the [insurance] department to protect consumers against STOLI transactions,” says Mary Jo Hudson, director of the Ohio Department of Insurance.
The bill, H.B. 404, officially amends the state Viatical Settlement Act. Under the new law, the department will have more authority over life settlements, and life settlement brokers and providers are required to give insurers more information before engaging in a life settlement.
Life insurers will have to ask specific questions aimed at uncovering STOLI schemes and report suspected schemes to the department.
The Ohio law also limits the ability of consumers who use certain types of premium financing arrangements to sell life insurance policies within 5 years of buying the policies.
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