We put together the full Senate Bill No. 98, for you to read and understand.

Senate Bill 98

As you can see, it is very long… This is directy from leginfo.ca.gov, so it is official.

California Gov. Arnold Schwarzenegger has signed a bill aimed regulating life settlements and imposing a state ban on stranger-originated life insurance policies.

California defines a life settlement as the sale of an existing life insurance policy to a third party for more than its cash surrender value but less than its net death benefit.

In a STOLI arrangement, investors with no relationship to the insured initiate the purchase of the policy and pay the premiums.

The new law, S.B. 98, prohibits policy owners from entering into a life settlement for 2 years after a policy is issued.

S.B. 98 was sponsored by state Sen. Ron Calderon, D-Montebello, Calif., chair of the California Senate Banking, Finance And Insurance Committee.

The newly enacted law includes the following provisions:

- Requires individuals brokering or soliciting life settlement transaction in the state to be licensed by the state insurance commissioner after completing 15 hours of state-approved training in settlements.

- Forbids insurers from restricting lawful transfers of policy ownership.

- Requires agents and brokers arranging settlements to disclose to insureds all offers made on their policy and to divulge any business relationship, including compensation, with any person making an offer on a policy.

- Prohibits life insurance companies from acting to restrict agents from informing clients that life settlements are an alternative to surrendering or cashing in their policy.

- Allows individuals to cancel a settlement 30 days after signing the agreement or 15 days after receiving the proceeds, whichever is sooner.

A similar bill was advanced in the state legislature in 2008. Schwarzenegger, R, vetoed that bill, saying it did not include require the right disclosures.

LifeSettlementInfo.com is working on a full copy of Senate Bill No. 98 that will be shared on this website. Keep checking back, we will post updates here.

Source: National Underwriter

According to Sarah Hills of Reuters, Life settlements not as risky the subprime industry.

Although Life settlements are a type of life insurance-backed security, should not be compared to the failed subprime-backed products that presaged the global financial crisis.  In recent weeks several sources have speculated that life settlements will be the next craze in securitisation, prompting comparisons with the disastrous securitisations of subprime mortgages in the United States.

But the European Life Settlement Association (ELSA), established in May to promote the 9.5 billion euro ($13.89 billion) asset class, said in a statement that comparisons with subprime were unwarranted because life settlements are not subject to the same macroeconomic and market forces.

“Suggesting life settlements are the new subprime scandal is simply an exercise in sensationalism by the media,” said Patrick McAdams, Co-Chairman of ELSA and Investment Director at Surrenda-link Investment Management.

“There are risks in life settlements, principally relating to life expectancy, potential advances in healthcare, and liquidity to pay premiums.

“However, these can be well managed through rigorous actuarial modelling of returns, highly diversified fund portfolios in terms of profile and geography of policy, and conservative fund management,” he added.

Life settlement securities are backed by U.S. life insurance policies that have been sold by the policyholders for a cash sum to a financial institution, which then hopes to profit from the policy payout once the life assured dies.

These policies relate to individuals over the age of 65 with an anticipated life expectancy of less than 15 years.

ELSA also said regulatory interest in life settlements was growing, further enhancing their attractiveness to investors, with the U.S. Securities and Exchange Commission (SEC) now setting up a taskforce to look into the asset class.

Last month, lawmakers and regulators in the U.S. expressed caution about the burgeoning business of pooling, repackaging and selling life insurance policies into securities that can be sold to investors.

To use a free Life Settlement Calculator,  click HERE…..