Topic: Life Insurance & Annuities

NAIC Follows States Lead To Prohibit Travel Discrimination In Life Insurance Policies

Following the recent trend set by states such as California, Florida and New Jersey, the National Association of Insurance Commissioners (“NAIC”) has adopted a revised version of the Unfair Trade Practices Model Act (the “Act”) that limits the circumstances in which a life insurer can deny coverage to an individual based on the individual’s lawful past and future travel. 

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New Jersey Prohibits Travel Discrimination in Life Insurance Policies

On March 26, 2008, New Jersey Governor, Jon Corzine, signed into law Assembly Bill 1586, sponsored by Assemblyman Neil Cohen.  The new legislation prohibits unfair discrimination by life insurance companies against individuals based on their travel plans by expanding the definition of unfair discrimination to include “failing to issue, extend, or renew a life insurance policy, or fixing the rates, terms, or conditions of the policy based on an individual’s intent to travel abroad, unless the decision is based on sound actuarial principles.” 

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Supreme Court’s Decision in LaRue v. DeWolff, Boberg & Associates, Inc. Could Lead to an Increase in Individual Account Holder 401(k) Litigation

In a 9 – 0 decision, the U.S. Supreme Court decided on Wednesday of this week that individual participants in 401(k) retirement plans can sue plan fiduciaries to recover losses that result from mishandling of their individual retirement accounts.  Until the decision in LaRue v. DeWolff, Boberg & Associates, Inc., No. 06-856, (Feb. 20, 2008) courts and commentators disagreed over whether an individual account holder could bring an ERISA action against plan fiduciaries or whether only the plan itself had standing to bring those lawsuits. 

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Spitzer, NYLB Announce Proposed Resolution of Projected Shortfall in Executive Life Insurance Company of New York Rehabilitation

Executive Life Insurance Company of New York (ELNY) was placed into rehabilitation in 1991 after affiliated companies became insolvent and concerns about its future solvency arose.  The rehabilitation plan adopted in 1992 involved the transfer of much of ELNY’s business to another carrier; however, ELNY in rehabilitation retained substantial assets and continued payment on certain annuities, with the bulk of the payout going to structured settlement annuitants that had received long-term and/or lifetime annuities as settlements in personal injury lawsuits. 

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Connecticut Proposes to Adopt Military Sales Practices Regulation

Thomas R. Sullivan, Insurance Commissioner of Connecticut, recently published notice of intent to adopt a regulation concerning military sales practices to provide uniform standards through which active duty service members of the United States Armed Forces are protected from dishonest and predatory practices in the sale of individual life insurance and annuity products. 

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