TO: HONORABLE MEMBERS OF THE WISCONSIN STATE ASSEMBLY FROM: CONNIE L. O’CONNELL, WISCONSIN COUNCIL OF LIFE INSURERS SUBJECT: LIFE SETTLEMENT REGULATION – SB 513 DATE: APRIL 14, 2010 The Wisconsin Council of Life Insurers, an organization representing both domestic and nondomestic life insurance companies licensed in Wisconsin, strongly supports Senate Bill 513 (SB 513), providing consumer protection in life settlement transactions and respectfully request your support for this legislation, unamended. This bill provides critical consumer protections within life settlement transactions, particularly those known as Stranger Originated Life Insurance (STOLI). STOLI schemes involve investors who are wholly unrelated to an individual acquiring life insurance on that person solely to profit from his or her death. The sooner the person dies, the higher the profit. In effect, STOLI allows investors to speculate on the insured’s life. This practice disregards state insurable interest laws that mandate life insurance not be used for wagering on human life. SB 513 has passed the Senate Committee unanimously, the full Senate on a voice vote and the Assembly Insurance Committee on a vote of 8-2. The measure also has the backing of the Wisconsin Office of the Commissioner of Insurance, the Department of Financial Institutions, AARP, the Coalition of Wisconsin Aging Groups, the Elder Law Section of the Wisconsin State Bar, the life insurance industry, and the National Association of Insurance and Financial Advisors. The life settlement industry is opposed to this effort to regulate their practices, and representatives of the life settlement industry are expected to approach members with both substantive and nonsubstantive amendments in order to create additional barriers to passage of this important measure. We urge you to oppose efforts to amend SB 513 – even well-intended ones – and support passage in order to create a deterrent to STOLI and provide an effective regulatory framework for this industry. WCLI Wisconsin Council of Life Insurers Parrett & O’Connell, LLP 10 East Doty St. – Suite 621, Madison, WI 53703 Phone: 608-251-1968 Allianz Life Insurance Company of North America American Equity Investment Life Insurance Co. Ameriprise Financial Services, Inc. American Family Life Insurance Company Aviva USA Catholic Knights CUNA Mutual Insurance Equitable Reserve Guardian Life Insurance Company of America Genworth Financial MetLife National Guardian Life Insurance Company Northwestern Mutual Prudential Life Insurance State Farm Thrivent Financial for Lutherans WEA Trust