The life settlement industry scored a major victory in California this week in the case of Lincoln Life and Annuity Co. of NY v. Berck, as Trustee of the Jack Teren Insurance Trust, when the California Court of Appeals, in a 2-1 ruling, reversed a lower court’s ruling and held that the sale of a beneficial interest in an irrevocable life insurance trust to an investor shortly after the issuance of a policy was not a violation of California’s insurable interest statute even though the sale may have been contemplated at the time the policy was applied for. The California law has since been changed. I tip my hat to my wonderful litigation counsel, Steve Sklaver, Ryan Kirkpatrick and Matt Berry of Susman Godfrey LLP.
This echoes the decision of the New York Court of Appeals in its decision in the Kramer litigation this past November, and continues the recent streak of victories the life settlement industries has had in recent months.
