The Idaho Life Settlements Act, which went into effect July 1, requires brokers of these policies to be licensed in Idaho and to disclose fees, the value of offers and contractual arrangements.
“This level of transparency is needed in our unstable economy when people may feel pressed to sell life insurance policies for their cash value,” said Bill Deal, director of the Idaho Department of Insurance.
To date 27 states, including Idaho, have passed legislation to protect the owners of life insurance policies.
Idaho’s Life Settlements Act is only three months old, but already department investigators are looking into several possible cases of fraud, said Gina McBride, supervisor of the department’s consumer affairs section.
Idaho law also makes it illegal for an unrelated adviser or investor to solicit someone to purchase a life insurance policy just to sell it to the investor. This is called stranger-originated life insurance, or STOLI.
