Life Partners Inc. paying $170,000 to settle Va. charges [Richmond Times-Dispatch, Va.]

May 12--Life Partners Inc., a Texas firm that sells existing life insurance policies to investors who get money when the insured person dies, is paying $170,000 to settle charges it violated Virginia securities law.

The settlement also includes Life Partners' promise that it will offer to unwind Virginia investors' contracts with it, the State Corporation Commission disclosed in an order posted this week.

<p>Life Partners also agreed that in the future it will disclose to Virginia investors the payouts that buyers of life insurance policies had received in the past.

The company, which will pay a $150,000 fine to the state and $20,000 to the commission to cover the costs of its investigation, did not admit any wrongdoing.

"We settled an administrative case with the Virginia State Corporation Commission, which provides for a safe harbor of procedures and disclosures that will permit us to accept Virginia residents as purchasers within a clearly defined regulatory structure," company spokeswoman Andrea Atwell said.

The company's offerings, called viatical or life settlements, involve paying an insured person in return for letting an investor receive the policy's benefit when the insured person dies.

The commission charged that Life Partners was basically selling securities that had not been registered. Registration requires basic disclosures about the nature of an investment and its risks.

The viatical and life settlement business started several years ago, mainly driven by insured people with AIDS who needed money. It has since grown to include older people who feel they no longer need their policies. Over the years, the business has drawn attention from securities and insurance regulators in many states over its marketing methods.

------

Contact David Ress at (804) 649-6051 or dress @timesdispatch.com.

To see more of the Richmond Times-Dispatch, or to subscribe to the newspaper, go to http://www.timesdispatch.com.

Copyright (c) 2010, Richmond Times-Dispatch, Va.

Distributed by McClatchy-Tribune Information Services.

For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.