Life Care Funding Group provides final testimony advocating for consumer rights and access to information
For Immediate Release
(November 19, 2010) – The National Conference of Insurance Legislators (NCOIL) passed by super-majority vote the Life Insurance Consumer Disclosure Model Law at their annual legislative meeting in Austin, TX. The members of the Life Insurance and Financial Services Committee heard testimony from Life Care Funding Group, Coventry First, the American Council of Life Insurers (ACLI), and MetLife and then voted 13-7 in favor of immediate passage.
Both Life Care Funding Group and Coventry First argued for consumers to have access to as much information and as many options as possible if they are considering surrendering or allowing a life insurance policy to lapse. The life insurance industry, represented by ACLI and MetLife argued that consumers could become confused if given too much information about their legal rights to alternative ways to keep their life insurance policies in force or convert them to other uses. The members of the committee supported giving the consumer information about their options and the only no votes came from members who thought the model bill did not go far enough. They suggested that insurance companies should inform policy holders on an annual basis what all of their rights and options are regardless of whether or not they might surrender or lapse their policy.
Chris Orestis, President of Life Care Funding Group testified that, “Our case workers hear from seniors and their families every day who have been paying premiums for years and are getting ready to abandon their policy. These are middle class Americans without insurance expertise and the typical size of their policy is well under $500,000. They are being told by their insurance company that their only option is to pay or walk away.” He went on to give the example of a family with a life insurance policy about to lapse that they converted quickly into a long term care benefit plan that will help cover the costs of an assisted living facility for the next couple of years.
He concluded his testimony by saying, “With this Consumer Disclosure law, policy owners will not make decisions based on a lack of information and instead will be informed that they have a number of options to consider first that could make a significant difference in their lives, and at a time when they need it most.”
After the Model Law was passed the insurance industry representatives made it clear that they would fight its passage in the states.
NCOIL Press Release: NCOIL Official Statement on Consumer Disclosure Passage
Life Care Funding Group Press Release: Press Release NCOIL Passes Consumer Disclosure Model Law