Message from the Director

I applaud Governor Strickland and the Ohio General Assembly for enacting HB 404 to protect Ohio seniors. The new Ohio law limits Stranger-Originated Life Insurance (STOLI) transactions in the Ohio life insurance market.

This consumer protection measure for Ohio seniors has been a major priority for the Department. I am delighted that Ohio lawmakers have enacted solid amendments to the Ohio insurance code that recognize a shared responsibility of the life settlement industry, life insurance companies and the Department to protect consumers against STOLI transactions.

The legislation amends the Ohio Viatical Settlement Act, which regulates the sale of life insurance policies to third party investors and the companies involved in these transactions. The amendments provide the Department with the following

• Additional oversight authority over life settlement brokers and life settlement providers.
• Require life settlement brokers and life settlement providers to provide insurers with additional information prior to engaging in a life settlement.
• Life insurance companies are now required to ask specific questions to identify STOLI transactions and report them to the Department.
• A five-year waiting period is required in certain circumstances before an individual may settle a life insurance policy if the transaction includes certain elements that are not disclosed to the life insurers.

I believe that this law will deter STOLI transactions from occurring in Ohio. In addition, the Department will implement new protocols to comply with consumer protections now outlined in law.

If you have any questions or comments about our Insurance Insights newsletter, please click the email link at the bottom of the newsletter to contact us.

Best wishes,

Mary Jo Hudson
Director

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