On February 26, the U.S. 4th Circuit Court of Appeals in Richmond affirmed a lower court decision in the First-Penn Pacific Life Insurance Co. case holding, in effect, that insurable interest is not negated solely because the owner plans to sell a policy at the time of purchase. The carrier had appealed a 2007 decision by the U.S. District Court of Maryland denying it permission to rescind a $2 million policy it had issued to the late Stanley Moore of Arizona. The district court had held against First Penn on the grounds that the insurer had failed to take action within the two-year contestability period. The appellate court found that Moore had attempted to exploit the viatical settlement industry in 1997 when he obtained seven life insurance policies valued at a total of $8.5 million, based on its determination that Moore falsely claimed to be terminally ill when he discussed selling the policies with a broker and that he intended to sell all or most of the policies at the time he applied for them. The court stated, however, that “no third party participated in the procurement of Moore’s policy and therefore no one was ‘wagering’ on Moore’s life in violation of public policy.” The court also agreed with the position reflected in an amicus brief filed by Katten Muchin Rosenman LLP on behalf of the Life Insurance Settlement Association that “evaluating insurable interest on the basis of the subjective intent of the insured at the time the policy issues... would be unworkable and would inject uncertainty into the secondary market for insurance.” (First Penn-Pacific Life Insurance Company v. William Evans 2009 WL 497394)