Simple Solutions for Difficult Times
In light of the current economic environment, we have created "Simple Solutions for Difficult Times - 9 Tips to Boost Your Revenue with Provada".
The New OHIO STOLI Law
The 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.
How long do life settlement transactions take to complete?
One of the inescapable facts of life settlements is that they take longer than anyone involved wants. But, according to speakers at the recent Life Insurance Settlements Association conference in Washington, D.C., there may not be much anyone can do about it.
“Certain steps have to be done,” such as the underwriting and evaluating of a policy, noted Scott Kirby, co-president of business development and compliance issues for Orlando-based Advanced Settlements LLC.
Life settlement developments
Despite the likelihood of increased regulation of life settlements and of those who play a role in arranging for life settlements, as well as longer life expectancies potentially leading to lower offers, it is expected that the life settlement industry will continue to grow and flourish, especially with more and more institutional money entering the picture.
Understanding the Underwriting Process and Timeline
Knowing the basic timeline prior to submitting a case allows you to set expectations, which gives you and your client a better idea of what to expect. Below is the process and timeline we utilize at Provada, which is fairly typical of well-run Brokerage General Agencies. The first part of this post is specific to life insurance policies while life settlement processing is discussed at the end.
- Allow 4-6 weeks for a simple application.
- Most Brokerage General Agencies (BGAs) process applications within 24 hours of receipt.
- If medical records are required, allow for 2 additional weeks. This can vary depending on the applicant’s doctor’s ability to get the records out to the BGA.
- Clients are typically contacted by the paramedical firm with 24 hours of the requirements being ordered.
- BGAs are typically updated weekly by the paramedical facility.
- Once the exam is completed, results are received within 5-7 working days.
- An average turn around time of 10-14 working days for medical records ordered from doctors and medical facilities.
Small Face Amount Life Settlement Programs Launched
Several life settlement providers have recently launched small face amount programs for policies under $500,000. Backed by large institutional funding, the "SFP" program is a simple and fast way to include Life Settlements in your insurance practice!
With just the application and illustration, your client can receive a competitive Life Settlement offer for qualifying policies!