New York's Court of Appeals recently issued a ruling that legalized Stranger Owned Life Insurance transactions.
In a 5-2 decision issued by the New York Court of Appeals on November 17, 2010, the majority ruled against Alice Kramer, widow of Arthur Kramer, a prominent New York lawyer who died in 2008, and held that New York State's insurable interest law is not violated when an insured takes out an insurance policy with an intent to have the policy resold to investors. The Court further concluded that in order for Alice Kramer to continue her claim against the investors for the insurance that her children had sold, she would have to prove that Arthur Kramer was subject to coercion or other nefarious conduct from the investors in the insurance policies.
NSSTA member Michael J. Miller, a partner with Philadelphia's Drinker Biddle law firm, represented Lincoln Life and Annuity, one of the life insurers.
Judge Carmen Beauchamps Ciprarick wrote the decision. To review a copy of the decision Download Kramer STOLI NY CT Appeals Decision 11-17-2010
Despite the adverse ruling, the American Council of Life Insurers stated it will continue its work to get states to adopt regulations to deter STOLI. At the present time 29 states have such regulations.