Ameritas Urges Georgia Supreme Court To Void ‘Life Wager’ Policy
September 15, 2025 | JacobiJournal.com — Ameritas Life Insurance Corp. is pressing the Supreme Court of Georgia to rule that a controversial life insurance arrangement cannot be enforced, arguing the deal amounts to an illegal wager on human life. At the center of the dispute is an investor-backed life insurance policy that was later purchased by a trust, raising the question of whether such agreements violate Georgia’s long-standing prohibition on wagering contracts. Ameritas contends that allowing the trust to collect benefits would effectively transform life insurance into a speculative investment vehicle, undermining its intended role of providing financial security to families and policyholders. The case highlights broader concerns within the insurance industry about so-called “stranger-originated life insurance” (STOLI) policies, which regulators and courts nationwide have increasingly scrutinized for potential fraud and abuse. Insurer Challenges Investor-Backed Policy Ameritas contends that a trust holding the policy—purchased years after it was originally issued—has no legitimate right to collect death benefits. According to the insurer, such investor-driven transactions undermine the very purpose of life insurance, which is to provide financial security for families, not serve as a speculative investment vehicle. The company argues that allowing investors to profit from policies they never had an insurable interest in could open the door to widespread abuse of the insurance system. Regulators and industry groups have long warned that such practices distort the risk pool, drive up costs for legitimate policyholders, and erode public confidence in life insurance as a safety net. Ameritas maintains that if courts uphold these investor-backed arrangements, insurers may be forced to reevaluate underwriting practices and tighten compliance oversight to prevent similar disputes in the future. Stakes High for Life Settlement Industry The case is being closely watched in Georgia and beyond, as it could influence how courts treat investor-backed life settlement agreements. Industry experts warn that a ruling in favor of Ameritas could set a precedent that reshapes the market for secondary life insurance transactions. Legal observers note that these types of arrangements fall into the broader category of “stranger-originated life insurance” (STOLI), where third-party investors acquire policies with no insurable interest in the original policyholder. Courts across the country have wrestled with whether such contracts violate public policy by creating financial incentives tied to another person’s death. Ameritas argues that Georgia law, like many states, was designed to prevent such speculative practices, and the outcome of this case could set a pivotal precedent for how investor-backed life insurance is treated going forward. Broader National Trend Similar disputes have surfaced across the U.S., with insurers frequently challenging so-called “stranger-originated life insurance” (STOLI) policies. Courts have increasingly scrutinized these arrangements, questioning whether they violate long-standing public policy against wagering on human lives. In several states, high-profile rulings have either voided STOLI contracts outright or limited investors’ ability to enforce them, signaling a judicial shift toward stricter oversight. Regulators have also expressed concern that such practices could distort the life insurance market, inflating costs for policyholders who purchase coverage for legitimate family protection. Industry experts warn that unless clearer legal boundaries are established, these disputes will continue to surface, creating uncertainty for insurers, investors, and beneficiaries alike. What Comes Next in Georgia The Georgia Supreme Court’s decision will determine whether the trust may claim the policy’s benefits, or if the contract will be declared void as against public policy. A ruling is expected later this year and could have ripple effects for insurers, investors, and estate planners across the Southeast. Legal analysts note that the case could set a binding precedent in Georgia, influencing how courts in neighboring states approach similar investor-backed policies. A decision striking down the arrangement could embolden insurers to more aggressively challenge questionable policies, while a ruling in favor of the trust might encourage continued use of such structures in estate planning and investment circles. Either outcome is expected to draw close attention from financial advisors, policyholders, and lawmakers monitoring the balance between consumer protection and investment innovation in the life insurance market. For more context on life settlement regulation, visit National Association of Insurance Commissioners. FAQs: Ameritas Life Insurance Policy Georgia Ruling What is the core issue in the Ameritas case? Ameritas argues that the investor-backed life insurance policy is an illegal “wager on life” and should not be enforced. What is a STOLI policy? A STOLI, or stranger-originated life insurance policy, involves investors purchasing life insurance on strangers, often raising public policy concerns. Why does this case matter beyond Georgia? The ruling could influence national treatment of investor-backed life settlements, shaping future litigation and regulatory approaches. When is a decision expected? The Georgia Supreme Court is reviewing arguments now, with a ruling anticipated before the end of 2025. Subscribe to JacobiJournal.com for timely updates on insurance litigation and financial fraud cases. 🔎 Read More from JacobiJournal.com:
Life Insurance Wagering Contracts and Identity Fraud: A Deadly Combination
December 20, 2024 | JacobiJournal.com — Life insurance fraud has entered a perilous phase with the rise of wagering contracts intertwined with identity fraud. Insurance Fraud.org explored this issue in depth (Read the full article). It exposes vulnerabilities in life insurance policies, endangering both financial systems and individuals. Criminals exploit identity fraud to gain access to life insurance policies through wagering contracts, often targeting unsuspecting individuals or using synthetic identities. This allows them to manipulate the system for financial gain, making detection more difficult for insurers. The rise of such schemes underscores the importance of robust identity verification and monitoring processes to protect both policyholders and the broader insurance ecosystem. What Are Wagering Contracts? Life Insurance Wagering Contracts and Identity Fraud: A Deadly Combination, These fraudulent contracts involve policies obtained by individuals with no genuine insurable interest in the policyholder. Criminals exploit these policies using stolen identities or false data, aiming to cash in on payouts after the insured’s death. This practice undermines ethical and legal standards in the insurance industry. These wagering contracts become particularly dangerous when combined with identity fraud, as criminals can assume or fabricate identities to acquire multiple policies without detection. Insurers face increased risk because traditional verification methods may not catch synthetic or stolen identities. Understanding the interplay between wagering contracts and identity fraud is essential for developing stronger safeguards and protecting both the financial system and legitimate policyholders. How Can Insurers Respond? Here are actionable steps insurers can take: Why It Matters The combination of wagering contracts and identity fraud represents a sophisticated threat to the life insurance sector. Tackling these challenges demands innovative solutions and industry-wide vigilance. Insurers must remain proactive, continuously updating their verification processes and monitoring systems to detect unusual policy patterns. Collaboration across companies, regulators, and law enforcement agencies is essential to share intelligence and prevent large-scale exploitation. By understanding the mechanics of these fraudulent schemes and implementing comprehensive safeguards, the industry can better protect financial systems, policyholders, and the integrity of life insurance products. For an in-depth analysis of life insurance wagering contracts and identity fraud, refer to the Journal of Insurance Fraud in America: JIFA: Life Insurance Wagering Contracts And Identity Fraud. FAQs: Life Insurance Wagering Contracts and Identity Fraud What are life insurance wagering contracts? Life insurance wagering contracts involve policies obtained by individuals with no genuine insurable interest in the policyholder. Criminals exploit these policies using stolen identities or false data, aiming to profit from the insured’s death. How do identity fraud and wagering contracts intersect? Fraudsters often use stolen or synthetic identities to purchase life insurance policies with no insurable interest. This combination allows them to collect death benefits without legitimate ties to the insured. What are common schemes involving wagering contracts? Common schemes include Stranger-Originated Life Insurance (STOLI), where investors induce individuals to take out policies for their benefit, and synthetic identity fraud, where fabricated identities are used to obtain policies. How can insurers prevent such fraudulent activities? Insurers can strengthen identity verification processes, monitor policy patterns for inconsistencies, advocate for stringent regulations, and collaborate with law enforcement to detect and prevent fraudulent schemes. What is an example of a wagering contract? Stranger-Originated Life Insurance (STOLI) is a common example, where investors convince someone to take out a life insurance policy for the investors’ benefit, often combined with identity fraud to conceal ownership. What invalidates a life insurance policy? A life insurance policy may be invalidated if it was obtained without insurable interest, through fraud, misrepresentation, or use of stolen or synthetic identities. Such violations undermine the policy’s legitimacy and legal enforceability. Stay informed and proactive in combating insurance fraud. Subscribe to JacobiJournal.com for the latest updates, expert insights, and strategies to protect your organization from emerging fraud threats. 🔎 Read More from JacobiJournal.com: