STOLI On The Rocks With A Twist

Law360, New York (November 28, 2011, 1:03 PM EST) -- We previously wrote about the concept of insurable interest and the potential challenges that life insurers face when seeking to avoid stranger-originated life insurance (STOLI) transactions.

In particular, New York’s highest court in late 2010 refused to categorically invalidate several STOLI transactions after concluding the then-applicable New York law did not prohibit such arrangements which, in their simplest form, involve an investor who purchases the opportunity to recover the death benefit of a policy insuring the life of a stranger.

The case was Kramer v. Phoenix...
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