UPDATE: Oklahoman Editorial: Turning treasures into trash

Originally Posted 4/22/08

As rank-and-file Republicans look on in amazement, yet another corporate welfare scheme is advancing through the Oklahoma House of Representatives, once again being pushed by the Republican leadership.

Despite some negative media attention last week, Big SCREW (Selfish Companies Reaping Excessive Windfalls) remains on general order this week in the house. State Rep. Ron Peterson, already in hot water with the public over his awkward handling of an autism-related insurance matter, is pushing hard for SB 1980, a Trojan horse bill that purports to eliminate so-called Stranger Originated Life Insurance (STOLI) scams, but according to knowledgeable observers is actually a back-door way to eliminate ‘life settlements,” an investing tool that gives Oklahoma Seniors and charitable institutions options for estate planning purposes.

Ironically, the STOLI bill, which purports to stop one type of scam, is a swindle itself. “There is no STOLI problem in Oklahoma,” another insider tells OKPNS. “Over 60% of life insurance policies lapse, so this is just a way to keep from paying claims. It will hurt senior citizens and Oklahoma charities, and the backers of this fraud should be ashamed, VERY ashamed. If they want to stop STOLI, a short amendment would suffice. It wouldn’t take a massive esoteric bill to end STOLI, but let’s be real: stopping STOLI is not what this is all about,” she says. Regular OKPNS readers will recognize the gang that is advancing the Big SCREW. The primary proponent is the American Council of Life Insurance (ACLI) in Washington, headed by former Oklahoma Governor Frank Keating. Keating, also a member of the Chesapeake Energy Board of Directors, has hired the Fried lobbying bunch to pull the wool over legislators’ eyes. Also lobbying hard for the bill is the insurance industry’s toady, insurance commissioner Kim Holland, and the Senate author Sean Burrage.

Under the pretext of ending STOLI, the 88-page bill includes cynical clauses, including on that mandates that life insurance policy holders cannot receive less than 50% of the face value of the policy, which effectively kills the practice. Life settlements enable financially-strapped seniors to realize some yield from their investments if they are sick or in need of some financial assistance. Further, seniors who violate that aspect of the bill will be guilty of a FELONY, an excessive and immoral element. The bill is especially ironic when considering that Ronald Reagan is believed to have sold some policies in his last years.

Under SB 1980, “Big Insurance” wins, and Oklahoma seniors and charities lose. This bill will seriously and dramatically affect those citizens who buy life insurance policies for estate planning purposes and negatively affect the net worth of Oklahoma seniors. It is a scandalous bill rooted in the desire of Big Insurance to take every last nickel from their policy holders, regardless of morals and fairness. This bill would have jailed Ronald Reagan, and at some point people will find out what has happened, and for legislators who support this abomination, it could be THE campaign issue of the year.

Labels: Frank Keating, Kim Holland, Rep. Ron Peterson, Sen. Sean Burrage

Posted at 4/23/2008 01:29:00 PM