Arent Fox’s Jule Rousseau, a partner in the firm’s insurance practice in New York, was quoted in a August 27, 2012 Life Settlements Wire article discussing an Illinois federal judge’s decision to side with an insurer over the question of whether premiums can be retained in a stranger-originated life insurance (STOLI) case, but leaving the door open for the trustee to assert a claim of unjust enrichment against the carrier. In another case decided in U.S. District Court in Wilmington, Delaware, a judge came to the opposite conclusion striking the carrier’s request for premiums when a policy was voided for lack of insurable interest at inception.

In the article, Jule says the Illinois result is the middle ground. He says it means, “We’ll leave you where we find you. We leave you as you are. Now, you can sue for unjust enrichment.” Jule goes on to say that we are not likely to see any new cases where carriers are seeking a return of premiums based on statutory rescissions because the two-year contestability periods have expired for most policies where this was an issue. Now, the new cases coming before the courts will focus on whether premiums should be returned when policies are voided due to lack of insurable interest.