Life insurers fight hedge fund legislation
February 22, 2013 by Elizabeth D. Festa
Life insurers are beating back legislative attempts in various states by hedge funds who invest in the life settlement industry and settlement providers to keep premiums on resold life insurance policies once they have been deemed to have been fraudulently obtained.
Such a situation, called a STOLI – stranger-originated life insurance – or a policy taken out with the purpose of reselling it to a person who does not have an insurable interest in the life of the original insured.
Hedge funds who are stuck with STOLIs as part of their secondary market portfolio of life settlements want the laws rewritten so insurance companies return the premium to them, the owner of the policy, even though the policy was fraudulently obtained. Click here to read…