Anti-STOLI Legislation, Panacea or Pandora?


With the recent regulation of life settlements and stranger-originated life insurance, or "STOLI", it is uncertain whether the legislation will permit or even encourage the growth of the life settlements market. Notwithstanding the anti-STOLI legislation, the burden upon life insurance companies to detect and address STOLI will continue to increase.

Comparing the growth of the life settlement market and the regulation of life settlements to the secondary market for structured settlement annuity payments, the regulation itself ignited the growth in the secondary market for structured settlements. Once the payment rights were no longer acquired surreptitiously, the investment in the payment rights took off. Similarly, the regulation of life settlements will prove to be a catalyst to the secondary market for life settlements, of which STOLI is the bad apple.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Katherine Scanlon, Seiger Gfeller Laurie LLP | Attorney Advertising

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