LexisNexis® Legal Newsroom
New Hampshire Restricts STOLI Transactions

New Hampshire Governor John Lynch (D) signed HB 660 into law which enacted life settlement legislation in New Hampshire effective June 14, 2010 (the "Act"). The Act is primarily based on the National Association of Insurance Commissioners' model, and, among other things, imposes restrictions...

Principal Life Insurance Co. v. Rucker: Carrier Wins Substantial Victory in Beneficial Interest/STOLI Transaction Case

By Stephan Leimberg and Howard Zaritsky The decision in Principal Life Ins. Co. v. Lawrence Rucker 2007 Ins. Trust, 2010 U.S. Dist. LEXIS 89243 (D. Del. Aug. 30, 2010) is important for three reasons. First, most of the prior insurer victories have been limited to surviving a motion to dismiss,...

Nationwide v. Steiner: Stranger Initiated Annuity Transactions (STATs) Again Upheld

By Stephan Leimberg and Howard Zaritsky In LISI Estate Planning Newsletter #1655, Howard Zaritsky provided members with his analysis of what appeared to be the first reported “STAT” decision, W. Reserve Life Assur. Co. v. Conreal LLC, 2010 U.S. Dist. LEXIS 56340 (D.R.I. June 2, 2010) ...

Lincoln National v. Snyder: Another STOLI Case, Another Carrier Victory

By Stephan Leimberg and Howard Zaritsky "Investors who are interested in STOLI arrangements should consider that the insurers are litigating all of these cases that they discover, and that they are investigating policy claims carefully to discover STOLI arrangements. Furthermore, the insurers...

Principal Life v. Mosberg - STOLI on the Rocks

By Stephan Leimberg and Howard Zaritsky The story below concerns yet another case of "STOLI ON THE ROCKS." EXECUTIVE SUMMARY: A U.S. District Court held that insurable interest was lacking in the purchase of a life insurance policy and that it was therefore void from inception. Principal...

PHL Variable Insurance Company v. Morello – STOLI Policy Rescinded

By Stephan Leimberg and Howard Zaritsky "where the insurer is induced to enter into a contract for insurance by the actual fraud of the insured, the insurer is not required to return the premiums paid." The reasoning is that "a contrary rule would be an invitation to commit fraud."...

Ashkenazi v. AXA Equitable Life – Policies Procured by Fraud

By Stephan Leimberg and Howard Zaritsky "life insurance is designed to replace or preserve wealth or income that is lost due to an insured's death, rather than create wealth or income." Ashkenazi v AXA Equit. Life Ins. Co., 2009 NY Slip Op 33111U (N.Y. Sup. Ct. Dec. 16, 2009) , provides...

Kramer v. Phoenix Life Ins. Co. - New York Court of Appeals Holds STOLI Arrangements Satisfy NY Insurable Interest Requirements

By Stephan Leimberg and Howard Zaritsky In a case certified to it by the U.S. Court of Appeals for the Second Circuit, the highest court in New York held in a 5-2 decision that New York's insurable interest rules didn't prohibit an insured from buying a policy on his or her own life and thereafter...

Wager On Life Is Void -- Insurance Requires Insurable Interest

By Barry Zalma, Attorney and Consultant It is the essence of insurance that for insurance to exist the person insured must have an insurable interest in the property or life insured. Life insurance insurable interest can be defined as an interest based upon a reasonable expectation of pecuniary...