A wealthy investor offers to pay all premiums on a new $5 million policy on the life of an elderly stranger in exchange for an agreement that the policy will be transferred to the investor after the two-year contestable period. Under Florida law, this arrangement is best characterized as:

Why this is the answer

Florida prohibits stranger-originated life insurance (STOLI), defined at §626.9911(9) as any arrangement to initiate a life policy for the benefit of a third-party investor who has no insurable interest in the insured at the time the policy is originated. Section 626.99289 declares any contract, financing agreement, or other arrangement furthering a STOLI practice 'void and unenforceable,' and §626.99291 lets the insurer contest such a policy even after the normal two-year contestability window. A viatical settlement is the legitimate after-issued sale of an existing policy by an insured with terminal/chronic illness — not the same as STOLI. Per Fla. Stat. §626.9911(9) and §626.99289.