California Bill Would Trim Life Settlement Rules

By Trevor Thomas

June 30, 2010 at 08:00 PM

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California lawmakers may update a life settlement statute that was approved just last year.

State Sen. Ron Calderon, D-Montebello, Calif., has introduced a bill, S.B. 1242, that would cancel a section in the new law that requires life settlement broker and agent applicants to provide any information required by the California Department of Insurance.

S.B. 1242 also would:

- Exempt information the California department gets from life settlement producers from the state's Public Records Act. The act makes most information gathered by state agencies available to the public.

- Eliminate a section of the law that requires settlement providers to disclose to the seller of a policy the life expectancy estimates used to price the individual's policy.

- Require the California insurance commissioner "to adopt rules and regulations reasonably necessary to implement and enforce the express provisions of the act."

David Link, the California department's legislative director, has blasted the bill in a letter sent to Jose Solario, chair of the state Assembly's Committee on Insurance.

If the life settlement industry has problems with the regulations the California department has proposed to regulate its business, it should appeal to the state Office of Administrative Law, not the legislature, Link says.

"Until the legislature knows for sure whether CDI has exceeded its authority under [the law], its resources are being used primarily for legal speculation," Link says. "That is exactly the sort of dispute OAL was created to resolve definitively."

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