Life Settlement News

The Life Insurance Settlement Association (LISA) today renewed its objections to the recent amendments to the NAIC Viatical Settlement Model Act, after it was revealed that both the primary author of the model and its key supporter, the American Council of Life Insurance (ACLI), knew that the model act failed to address the problem of stranger originated life insurance (STOLI). LISA has repeatedly raised concerns about the highly unorthodox process and closed-door tactics which were used to develop and adopt the amendments and has held firm that the model does not stop what the NAIC has already identified as the improper manufacturing of life insurance.

The NASD and SEC have stressed over the last year or so the importance of maintaining open lines of communications with the industry and both have been using technology to make those conversations easier.

Genstar Capital, LLC and Boston Ventures announced today a majority investment in 21st Services, in partnership with management. The Minneapolis, Minnesota based Company is a leading provider of mission critical, life expectancy information that is currently used in the life settlement industry, the secondary market for life insurance, and with new applications planned to be launched in coming years.

Life-Exchange, Inc., (Pink Sheets:LFXG) the nation’s leading trading platform for the life settlement industry, announced today that their system has been successful in preventing the first attempted abuse of the electronic life settlement market. Three weeks ago it was discovered that a member broker had attempted to circumvent the exchange and simultaneously defraud their client by falsifying the offer amount. Due to the cooperation of Advanced Life Settlements Management (Advanced LSM), the first European member to join Life-Exchange, and other exchange members the abuse was quickly detected and prevented.

Boca Raton insurance magnate Barry Kaye was wrongly implicated in a fraud investigation after a Pennsylvania company gave erroneous information to a state regulatory agency, company officials said this week.

Ross and Collaborating Agents Acting in Concert with Him Could Be Held Liable for Millions of Dollars, According to MCC

The Honorable Ronald L. Bauer, Judge of the Orange County Superior Court, granted MCC’s request for a preliminary injunction against Mark Ross, his companies, and those acting in concert with them. The injunction comes five weeks after Judge Bauer entered a restraining order against the same group for various violations of contracts and tort law.

In a significant reversal of its previous position, the Superior Court of Orange County ruled that life insurance industry innovator Mark Ross cannot be prevented from engaging in public dialogue about the business practices of Mutual Credit Corp. [MCC], an Irvine, Calif.-based premium finance agency that Mr. Ross alleges has defrauded seniors out of hundreds of millions of dollars in life insurance protection. The decision continues the successful advance of Mr. Ross’ efforts to “clean up” abusive practices in the life insurance industry.

Ritchie Capital Management today filed a complaint against Coventry First, a leader in the life settlements industry, under the Federal RICO Act and for fraud, breach of fiduciary duty and breach of contract. This complaint, filed in the United States District Court, Southern District of New York, was brought to recover damages to Ritchie Capital caused by Coventry First’s pervasive fraud in the secondary market for life insurance, wherein an investor purchases a life insurance policy from the owner, pays the premiums as they come due, and then collects the benefits upon the expiration of the insured.

North Dakota last week became the first state to adopt a more stringent statute regulating life settlements, with special emphasis on stranger-originated life insurance. Other states may follow, making life settlements a less attractive option for adviser clients who want to sell or invest in life insurance policies, industry observers say. Life settlements are the sale of life insurance policies by policyholders to third-party investors.

New trade association formed to encourage best practices and growth of the mortality and longevity related marketplace

Earlier today top investment banks announced the launch of the Institutional Life Markets Association, Inc. (ILMA), a not-for-profit trade association formed to educate consumers, investors, and policymakers about the benefits of the mortality and longevity related marketplace. ILMA seeks to establish industry best practices and disclosures, to encourage standardization of documents, and to advocate for the appropriate regulation of the rapidly evolving life settlement and premium finance marketplace. These industries provide seniors with choices with regard to the economic value of their life insurance policies while still alive.