On Monday, the House Civil Justice Committee will debate and act upon Senate File 166, the life insurance industry sponsored bill that would prohibit stranger originated life insurance (STOLI) from being sold in Minnesota.  MIIAB is supporting this legislation to curtail this abusive practice.  Opponents of the proposal are still working to defeat or dramatically alter this bill.  Your assistance is requested.                

If your state representative is a member of the House Civil Justice Committee, (see list below) please contact them to ask them to support Senate File 166, the industry's anti-STOLI bill.  Here are a few talking points you may wish to use in your contact.

• STOLI is a growing abusive practice that is entirely contrary to the social purpose of life insurance, financial protection for families and businesses.  It allows investors without any insurable interest in a person to wager on that person's life.  It should be make illegal in our state.
• Minnesota has become a haven for STOLI like transactions because our common law definition of insurable interest is old and outdated.  Senate File 166 would update and strengthen our insurable interest laws. 
• Seniors who are age 70 and above with limited life expectancies are targets for STOLI transactions.  Speculators design complicated schemes to look legitimate and avoid detection and often arrange to loan or pay all premiums.  Then these policies are bundled together, securitize, and sold (just like sub prime mortgages).  The sooner the senior dies the greater the investor's profit.   This is wagering on human life.
• Proliferation of STOLI like transactions will result in higher premiums for those buying life insurance to protect their families.  If this is allowed to continue, it could jeopardize the favorable tax treatment of life insurance proceeds. 
• This bill does nothing to prohibit true life settlements and policyholders will still be able to sale their policies under situations like terminal illness, death of a spouse, divorce, loss of employment, medical disability, etc. 

Again, please contact your representative if they are on the House Civil Justice Committee, a listing of the members is provided below.  Ask them to support Representative Kate Knuth and vote for Senate File 166 prohibiting STOLI transactions in Minnesota.   Thank you for your assistance.