Posted September 21, 2010 4:24PM PST
Proposed changes to the consumer disclosure model act by life insurers were rejected last week by a National Conference of Insurance Legislators (NCOIL) committee.
The Life Insurance & Financial Planning Committee plans to hold a second conference call on Friday to look at the proposed model act again, according to Jordon Estey, director of legislative affairs and education for NCOIL.
NCOIL’s proposed consumer disclosure model act would require insurers to let insureds who are 60 or older or are known by insurers to be chronically or terminally ill to be told about life settlements or other options if they are planning to surrender or lapse their policies.
The committee is preparing a final model act proposal to be considered for adoption at the group’s annual meeting on Nov. 18 to 21 in Austin, Texas.
The committee rejected proposed changes to the model act by an insurance trade group and a carrier that would have weakened the model act. If passed by NCOIL, the model act can be used as a basis for state laws throughout the country next year.
The American Council of Life Insurers (ACLI), representing major carriers, had suggested a disclosure provision like the one passed by the California Legislature last year. That version would have required carriers to advise policy holders if they were considering making a change in the status of their policies to consult an insurance or financial adviser.
MetLife had proposed a written notice to be developed at no cost to insurers saying that life insurance, life settlements or other alternatives to lapsing or surrendering a policy may not be available to a particular policy owner, depending on his or her circumstances, and such policy owners should contact an adviser, agent or broker to get further advice.