The 4th Circ. Stance In First Penn V. Evans

Law360, New York (May 13, 2009, 12:00 AM EDT) -- One of the many challenging issues currently facing the life insurance industry is the increasing prevalence of stranger-originated life insurance transactions, commonly referred to as STOLI.

In the typical STOLI transaction, an elderly individual obtains life insurance on his own life by financing the premiums through a third party, with the understanding or agreement that the policy will later be sold to an entity lacking an insurable interest — usually following the policy’s two-year contestability period.

STOLI has become a big business, and it is having...
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