Stranger-Originated Life Insurance (STOLI)
Stranger-Originated Life Insurance (STOLI) Hearing
The Office of Insurance Regulation (Office) held a public hearing August 28 on Stranger-Originated Life Insurance (STOLI) to give all interested parties an
opportunity to voice their issues and concerns on STOLI arrangements. The testimony and material submitted at the hearing assisted the
Office in producing a report entitled Stranger-Originated Life Insurance and the Use of Fraudulent Activity to
Circumvent the Intent of Florida's Insurable Interest Law, which was released on February 5, 2009.
Additionally, Florida's Deputy Insurance Commissioner for Life and Health, Mary Beth Senkewicz, testified before the Senate Special Committee on Aging in Washington, D.C. on
April 29, 2009. A video of the hearing, entitled Betting on
Death in the Life Settlement Market - What's at Stake for Seniors?, and a copy of the testimony are available for viewing.
These STOLI arrangements have gained attention because, generally, a party purchasing life insurance must have an ?insurable interest? in the person being insured. For example, a person has an
insurable interest in his or her spouse.
In a STOLI transaction, however, a person with no insurable interest (a stranger) in another persuades the other person to obtain life insurance with the understanding that after a certain time (usually
two years) the insured will sell the policy to the stranger.
These arrangements circumvent public policy requirements behind insurable interest laws. The Office is now in the process of assessing whether those arrangements require specific
regulation, and, if so, what are possible next steps for regulating such arrangements in Florida.
If you feel that you have been victimized by a STOLI transaction, please contact the Office's Deputy General Counsel, Susan Dawson, at (850) 413-4195 or
Video of hearing (Part 1, Part 2 and Part 3).
The links below are to documents provided for the record of that hearing.
- Cantor Fitzgerald
- Chapter 2008-36
- Institutional Life Markets Association _ ILMA
- Life Insurance Settlement Association (9/3/2008)
- Life Insurance Settlement Association (8/28/2008)
- Life Settlement Solutions, Inc.
- Mass Mutual Finance Group
- RMJ R Marshall Jones, Inc.
- American Council of Life Insurers - Answers to Difficult Questions on STOLI
- Testimony of Robert Rubin, CLU, ChFC, Florida State Chairman, Association of Advanced Life Underwriting
- Bricker & Eckler LLP, June 2008 Insurance, Banks & Financial Services Bulletin - Ohio?s Anti-STOLI Legislation
- ILLICIT LIFE INSURANCE SETTLEMENTS by Michael Lovendusky, American Council of Life Insurers
- Estate Planning, July 2008 Volume 33/Number 7 - "Free" Insurance: Risks and Costs of Non-Recourse Premium Financing By R. Marshal Jones, Stephan R.
Leimbert, and Lawrence J. Rybka, Attorneys
- Testimony of Lawrence J. Rybka JD, CFP, President & CEO, Valmark Securities, Inc., to the House Insurance Subcommittee Regarding Ohio House Bill 404 on
December 18, 2007
- Testimony Supporting Ohio House Bill 404 by J. Bruce Ferguson, American Council of Life Insurers, before the State of Ohio House Insurance
Committee, Represenative Bill Batchelder, Chairman
- Testimony of Mary Jo Hudson, Director, Ohio Department of Insurance, before the House Insurance Committee on January 15, 2008
- Deterring Stranger-Originated Life Insurance: Two New Model Life Settlements Acts by Kenneth W. Kingma and Stephan R. Leimberg
- "Free" Insurance: Some Things I'd Tell My Mother by Stephan R. Leimberg
- CFC of Delaware II LLC