Attorneys For STOLI Disputes

Although illegal, it is not uncommon for a third party to take out a policy on an elderly or terminally ill individual for the sole purpose of waiting out the two-year contestability period and then selling the policy for a profit on the open market. Likewise, it is not uncommon for parties to be unjustly accused of such fraudulent dealings.

At the Los Angeles law firm of Beitchman & Zekian, PC, we vigorously defend clients in a wide range of life settlement disputes throughout the U.S., including those involving misrepresentation, fraud and stranger-originated life insurance (STOLI) transactions.

Insurable Interest Is The Touchstone

The right of policyholders to participate in life settlement transactions has been guaranteed ever since a landmark case in 1911 that was presided over by Supreme Court Justice Oliver Wendell Holmes. However, the Department of Insurance (DOI), the Department of Corporations (DOC) and other regulatory agencies still keenly scrutinize life insurance transactions that occur within the two-year window of contestability.

The pivotal issue is typically that of insurable interest. If evidence exists that the life settlement transaction occurred for the sole purpose of financially benefiting a third party, agencies are likely to conduct a prompt and thorough investigation. Though cloaked with the raiment of respectability, such transactions actually violate the principles of insurable interest. On the other hand, if the policyholder has outlived his or her insurable interest and no longer requires life insurance, he or she has every right to sell the policy to the highest bidder.

Turn To Our Trial Lawyers

Beitchman & Zekian, PC, is a strong advocate for agents, brokers and other parties accused of participating in STOLI actions.