California Gov. Arnold Schwarzenegger has vetoed a bill that would have created a regulatory framework for life settlements.
The bill, SB 1543, would have enacted the Life Settlement Consumer Protection Act.
Life settlements are transactions in which a policy owner sells the coverage to a third party.
The third party then pays the premiums and becomes the beneficiary of the policy.
According to the act, beneficiaries of trusts who owned an insurance policy but didn’t have an insurable interest in the person who was covered would be violating insurable interest laws.
Also, the bill would prohibit people from soliciting life settlements unless those individuals were licensed to do so.
The proposed legislation would have specified the requirements to obtain a life settlement license, as well as disclosure requirements at the point of solicitation.
There were also other regulatory provisions to protect the confidentiality of an insured’s medical and financial information.
The governor rejected the bill, saying that its provisions were amended late in the legislative session and were therefore still subject to debate.
“For instance, it is my desire to ensure that life settlement transactions contain proper notification and disclosure to consumers,” Mr. Schwarzenegger wrote.
“I am also concerned that the final version of the bill may unfairly exclude some companies from participating in the legitimate life settlement market.”
Mr. Schwarzenegger said he believes that any outstanding issues could be resolved, and any necessary legislation could be passed next year.
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Arnold Alois Schwarzenegger (German IPA: [ˌaɐnɔlt aloʏs ˈʃvaɐtsənɛɡɐ]; born July 30, 1947) is an Austrian-American bodybuilder, actor, businessman, and politician, currently serving as the 38th Governor of the state of California.Schwarzenegger gained worldwide fame as a Hollywood action film icon. He was nicknamed "The Austrian Oak" and "The Styrian Oak" in his bodybuilding days, "Arnold Strong" and "Arnie" during his acting career, and more recently "The Governator" (a portmanteau of Governor and The Terminator, one of his film roles)
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