Iowa moves to ban STOLI products

The Iowa Legislature has approved a bill to ban stranger-originated life insurance practices. The bill is awaiting the signature of Chet Culver, Iowa’s governor. This new legislation, S.F. 2392, includes elements of the two anti-STOLI model laws from the National Association of Insurance Commissioners in Kansas City, Mo., and the National Conference of Insurance Legislators of Washington. Drawing on NAIC’s model law, S.F. 2392 puts a five-year moratorium on settling STOLI policies. The bill also provides a legal definition of STOLI and identifies it as a fraudulent act, an element from the NCOIL model law. “Legislators in Iowa have taken great strides in underscoring the true value of life insurance and in protecting the interests of senior Iowans,” Jeffrey J. Taggart, president of the Falls Church, Va.-based National Association of Insurance and Financial Advisors said in a statement. “Life insurance products are designed to create security for the financial future of individuals and their families and those who truly depend on them for their well being.”