A producer arranges for a 78-year-old to apply for a $2 million life policy that, by prior agreement, will be assigned within months to an unrelated investor group that paid the premiums. Under California law, this arrangement is BEST described as:

Why this is the answer

A viatical or life settlement is a post-issue, arm's-length transfer of an existing valid policy by a consenting owner. STOLI is fundamentally different: the policy is procured at the outset with a pre-arranged plan to assign it to an investor lacking insurable interest, often with the investor financing the premiums. § 10110.1(d) makes that pre-arranged-transfer intent itself unlawful; the policy is void as against public policy. Disclosing the arrangement does not cure it.