SB 646 Summary

• Establishes comprehensive regulation of life settlement contracts in Michigan by adding Chapter 43 to the Insurance Code, requiring licensing of providers and brokers by the state insurance commissioner effective 90 days after enactment.

• Prohibits stranger-originated life insurance (STOLI) schemes and fraudulent life settlement acts, including misrepresentation in applications, deceptive marketing claiming insurance is "free," and transactions designed to evade insurable interest laws.

• Requires providers to obtain medical records, life expectancy evaluations, and written consent from insureds, and mandates a 15-day rescission period for owners to cancel life settlement contracts after execution.

• Implements strict disclosure requirements for providers and brokers covering tax implications, government benefit impacts, rescission rights, compensation amounts, and potential risks of policy ownership transfer.

• Establishes enforcement mechanisms including civil penalties up to $2,500 per violation, license revocation for 5+ years for fraudulent acts, antifraud program requirements for licensees, and immunity for good faith reporting of suspected fraud to authorities.