INVESTOR OWNED LIFE INSURANCE
1254 2005-2 NAIC Proc. 338
For over 200 years there has been a requirement for an insurable interest before someone could purchase a life insurance policy on an insured.
Conference of Insurance Legislatures (NCOIL) has adopted a resolution in opposition to the concept of investor owned life insurance. President George W. Bush and members of Congress have raised questions about this practice and there is, in fact, a bill pending to tax the transactions. She suggested that there is a danger that this practice could destroy the income tax benefits that have been available to consumers for many years
He opined that the distinction is based on a Supreme Court case from 1911 where Justice Oliver Wendall Holmes affirmed the right of a policy owner to sell a policy as an essential property right. He differentiated that from the investor-initiated life insurance, where the investor has a speculative interest