Language that would have limited consumer notification about life settlements in Maine was stricken from a bill that was approved today by the state Senate.
The bill, LD 1523, would also revise the definition of stranger-originated life insurance under Maine law.
After passage by the state Senate, the bill is returning to the Maine House of Representatives where it could be heard as early as tomorrow.
The Maine Bureau of Insurance requested the legislation that would revise a life settlement law passed last year. Currently, insurers are required to notify certain policy owners of their option to settle life insurance policies when policy owners request to surrender their policy, to seek an accelerated death benefit, or when the insurer sends an initial notice that the policy may lapse.
Before the amendment, LD 1523 would have required the notification only for policies of at least $100,000 in death benefit. It would also have required notification to be sent at least 20 days before the lapse of the policy and expiration of any grace period for reinstatement, instead of when a policy lapse notice is initially sent.
Those provisions were opposed by some in the life settlement industry, which favors broader disclosure of the right to settle policies.
Sen. Margaret Craven, a Democrat from the city of Lewiston, introduced an amendment removing the provisions that would limit notifications and the amended bill passed the Senate.
The bill was previously approved by the House on March 16 without the amendment.
The version of the bill that will return to the House would only delete a sentence from Maine’s life settlement law that excludes “lawful settlement transactions” from the definition of stranger-originated life insurance.
If the House does not agree to the Senate’s amendment, it could vote to send the bill to a conference committee, said Colleen McCarthy Reid, analyst for the Maine State Legislature’s Joint Standing Committee on Insurance and Financial Services. The bill would die if both sides do not come to agreement before the Legislature adjourns for the year. Its session is scheduled to end by April 21.
Source: The LifeSettlementReport