Fla. Regulators Mull STOLI Bill

- Bob Rubin of the Association for Advanced Life Underwriting, Falls Church, Va. — Rubin, who is a producer in Boca Raton, Fla., says STOLI is showing up in mutated and hybrid variations.

One effect of STOLI is that it now can take 3 or 4 weeks to get the illustrations needed to service an in-force contract, Rubin says.

- Marshall Jones of the AALU — "Any type of premium financing can be made to look like traditional insurance planning," according to Jones, the president of a West Palm Beach, Fla., firm.

Some insurers approve a transaction and learn only later that the policy is part of a STOLI arrangement, Jones says.

Seminars and luncheon meetings are continuing to encourage seniors to take advantage of their "unused insurance capacity," Jones reports.

Since 2003, the cost of the universal life insurance with secondary guarantees that is often used in STOLI transactions has risen 5% to 7%, and the product is also less available, Jones says.

- Scott Cipinko, executive director of the Life Insurance Finance Association, Marietta, Ga. — Cipinko says life insurance premium finance has been in use for decades and predates the life settlement market.

"Premium financing should be available," Cipinko says. "It is a good product, a worthwhile product."

- Doug Head, executive director of the Life Insurance Settlement Association, Orlando, Fla. — If STOLI legislation is pursued, care needs to be taken to ensure "you are accomplishing what you want to accomplish," Head says.

Care also needs to be taken to ensure that "efforts to go after STOLI are not really efforts to go after the settlement business," Head says.

Companies are doing a good job of identifying STOLI transactions, and, if a producer knows of questionable transactions, that producer should report it, Head says.

There is an "ample body of law to go after perpetrators of STOLI," Head says.

Head says states should use the STOLI bill recently passed by California lawmakers, S.B. 1543, as a model.