The California life settlement act preserves the long-standing right of life insurance policy-owners to sell their policies when they no longer can afford
The governor of California has signed a law to regulate life settlements, which ensures that life insurance policy-owners of California are able to get the proper value for life insurance policies, that are likely to be lapsed or surrendered.
The new California life settlement act preserves the long-standing right of life insurance policy-owners to sell their policies when they no longer can afford or otherwise keep them.
The law provides strong consumer protections, including licensing of settlement companies and brokers, strong consumer disclosures and measures to detect and prevent the illegal manufacturing of new life insurance policies by strangers.
Significantly, the new law ensures that California’s citizens can pursue a life settlement with the assistance from their life insurance agent. With the passage of the legislation, life insurance companies are no longer allowed to gag life agents who would tell their clients about life settlements or otherwise act to harm consumers in life settlement transactions.
Since almost 9 of 10 life insurance policies issued are lapsed or surrendered, according to a leading international actuarial firm, life settlements are a valuable option for consumers.
As Californians face losses in income and value because of declines in stocks and home prices, many are not able to maintain their life policies and a life settlement is a valuable alternative to surrendering the policy back to the insurer for an inadequate cash value, said the company.
Senate Bill 98 was supported by Coventry and the American Council of Life Insurers, the National Association of Insurance and Financial Advisors, the AARP, and the majority of life settlement and life insurance organisations.