The National Association of Insurance Commissioners (NAIC) has approved a document for policymakers and various stakeholders that provides an overview of long-term care (LTC) financing mechanisms currently available in the private market, including the life settlement option.

Life Settlements Identified by NAIC Innovation Group as Private Market Option for Financing Long-Term Care Services


Orlando, Fla. – July 26, 2017 –
The National Association of Insurance Commissioners (NAIC) has approved a document for policymakers and various stakeholders that provides an overview of long-term care (LTC) financing mechanisms currently available in the private market, including the life settlement option.

The LISA team had been working with the NAIC’s Long-Term Care Innovation Subgroup in an effort to include life settlements in the NAIC document as an accepted financial strategy for consumers. The document was adopted by the subgroup on July 19, 2017.

The NAIC document outlines a handful of private market financing options, including various hybrid products that combine life insurance or annuities with coverage for LTC needs, and life settlements, which allow consumers to sell an existing life insurance policy in order to pay for LTC services.

“Life Settlements – the sale of an in-force life insurance policy for a market-based settlement value in excess of the cash surrender value (i.e., the account value less any surrender charge) – is one option seniors might use to generate resources to pay for their long-term care needs,” affirms the NAIC in Private Market Options for Financing Long-Term Care Services.

The NAIC is currently involved in an effort aimed at increasing the number of affordable asset protection product options available for Americans, potentially paving the way for the private market to play a more meaningful role in financing LTC needs.

“Part of this effort involves identifying and addressing potential regulatory barriers to innovation in the private market, in order to spur innovative private market solutions to financing Americans’ long-term care needs,” reads the introduction to the NAIC document. “At the same time, it is important to recognize that a variety of options currently exist to help consumers finance their long-term care needs.”

The NAIC document will be shared with insurance commissioners in all 50 states and is expected to be disseminated widely to other state regulators, policymakers, consumer groups and relevant financial advisor groups. LISA’s efforts to work with the NAIC LTC Innovation Subgroup were led by Michael Kreiter, director of legislative and regulatory affairs.  “It was a pleasure working with the Subgroup and NAIC staff during the development of this important document,” said Kreiter. “Their openness during the process led to the development of an excellent tool for consumers and advisors who want to learn more about private market alternatives to fund long-term care.”

“This NAIC document is another step forward in the movement to make sure that every senior in America is aware that life insurance is personal property they can use as a retirement asset, and that they are informed of all options available to them if they own a life insurance policy they no longer need or can afford,” said Darwin M. Bayston, CFA, president and chief executive officer of LISA. “LISA will continue its efforts to advance legislation, regulations and public information that promotes consumer awareness of the life settlement option as a financing mechanism for long-term care and other retirement funding needs.”

To download a PDF of the adopted NAIC document, please click here.

About the Life Insurance Settlement Association

The Life Insurance Settlement Association (LISA) is the nation’s oldest and largest organization representing participants in the life settlement Industry, with a current membership of more than 90 companies doing business in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. The mission of LISA is to promote the development, integrity and reputation of the life settlement industry, to advance the highest standards of practice and professional development for the industry, and to educate consumers and advisors about a life settlement as an alternative to lapse or surrender of a life insurance policy. For more information, visit www.lisa.org.

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