An Act To Make Corrections to the Life Settlement Laws
Maine Legislature, Session 124, LD 1523
Committee: Insurance and Financial Services
Sponsors: PRIEST
Amends: 24-A MRSA §6802

Legislative Document 
No. 1523 
H.P.1073 
House of Representatives, December 21,2009 
An Act To Make Corrections to the Life Settlement Laws 
Submitted by the Depaliment of Professional and Financial Regulation pursuant to Joint 
Rule 204. 
Received by the Clerk of the House on December 17,2009. Referred to the Committee on 
Insurance and Financial Services pursuant to Joint Rule 308.2 and ordered printed pursuant to 
Joint Rule 401. 
Presented by Representative PRIEST of Brunswick. 
Printed \In l'L',:~~bl p::lpL'r 
fl/;jr0~ /tJ. 7Iltl£~l-r4{ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec.!. 24-A MRSA §6802.;.A, sub-§12-A, as amended by PL 2009, c. 376, §5, 
is further amended to read: 
12-A. 
Stranger-originated life insurance. 
"Stranger-originated life insurance" 
means an act or practice to initiate a life insurance policy for the benefit of a person who, 
at the time of the origination of the policy, has no insurable interest in the' insured. 
"Stranger-originated life insurance" includes, but is not limited to, cases in which life 
insurance is purchased with resources or guarantees from or through a person who, at the 
time of the inception of the policy, could not lawfully initiate the policy and when, at the 
time of policy inception, there is an arrangement or agreement to directly or indirectly 
transfer the ownership of the policy or the policy benefits to another person. "Stranger-
originated life insurance" also includes the creation of a trust to give the appearance of 
insurable interest and the use of such a trust in order to initiate policies for investors in 
circumvention or violation of insurable interest laws and the prohibition against wagering 
on life. "8trat1ger originated life insurance" does not include those practices set forth in 
subsection 9 A. DaraEraDhsA. to J or other la\',rful settlement transactions. 
Sec. 2. 24-AMRSA §6808-A,SUllb..:§4, ~,'asenactedbyPL 2009, c. 376, § 12, 
is amended to read: 
D. If the insured under an individual life insurance policy, other than a policy of 
credit life insurance as defined in section 2853, is 60 years of age or older, or is 
known by the insurer to be terminally iII or chronically ill, and the policy has a death 
benefit of at least $100,000, exclusive of any accidental death benefit or other benefit 
limited to death by specified causes, the insurer shall send notice to the policyowner 
that there may be alternative transactions available, including a copy of the 
superintendent's brochure, whenever: 
(1) +he If the policyowner has requested the surrender of the policy in whole or 
in part; 
(2) +he If the policyowner has requested an accelerated death benefit; 
(3) The insurer sends an initial notice that the policy may lapse At least 20 days 
before the lapse of the policy and the expiration of any applicable grace period 
for reinstatement; or 
(4) As the superintendent may require by rule. 
SUMMARY 
This bill clarifies the definition of "stranger-originated life insurance" in the laws 
governing life settlements by removing an extraneous reference to settlement transactions 
and adds standards clarifying which types of life insurance coverage are subject to the 
consumer notification requirement. 
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