The Life Settlement Institute Responds to ACLI Statement Urging Ban on Securitization of Life Settlements

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February 16, 2010 Tuesday 11:10 AM EST

LENGTH: 593 words

HEADLINE: The Life Settlement Institute Responds to ACLI Statement Urging Ban on Securitization of Life Settlements

DATELINE: WASHINGTON, Feb. 16

WASHINGTON, Feb. 16 /PRNewswire/ -- The Life Settlement Institute (LSI), the leading organization representing secondary market providers for life insurance, responded today to a February 3rd ACLI News Release urging policymakers to ban securitization of life settlements.

The February 3rd ACLI policy statement urging policymakers to ban securitization of life settlements because such securitization "will exacerbate the STOLI [stranger-originated life insurance] problem" is akin to proposing a ban on baseball because some players may use steroids or a ban on football because some players suffer concussions. Securitization of life settlements is pro-consumer as a mode of funding life settlements. STOLI issues are logically addressed through insurable interest and STOLI laws. To that end, the Life Settlement Institute supports insurable interest laws and has vigorously supported legislation to prohibit STOLI, including supporting legislation and regulation requiring insurers to ask appropriate questions in their life insurance policy applications to ferret out potential STOLI.

Unfortunately, the numerous straw man arguments in the ACLI statement concerning life settlement securitization are not useful or relevant to STOLI abatement discourse. Rather, we urge ACLI to distinguish between the pro-consumer benefits of life settlements (and life settlement securitization) as opposed to illegal STOLI practices, as previously set forth by ACLI President Frank Keating: "'Sometimes, circumstances force consumers who purchased life insurance policies in good faith to consider life insurance settlements. We are not trying to shut down the option for consumers. Our legislative efforts are targeted at STOLI," Keating said.'" ACLI should withdraw this misguided statement.

ABOUT LSI

The Life Settlement Institute is a trade association dedicated to: increasing the knowledge and awareness on the part of financial planning professionals and advisors of the life settlement industry, increasing the awareness of life insurance policyholders of the option of obtaining more value (where appropriate) for their policy than otherwise would be available from the issuing life insurance carrier, promoting the use of institutional financing in the life settlement industry, supporting laws and regulations that foster the use of such institutional financing and preventing fraudulent or dishonest life settlement transactions. LSI has been the leading organization in promoting and supporting strong regulation of the life settlement market and in promoting best practices within the industry. LSI and its members have successfully advocated for the passage of every state settlement law adopted since 2001, all of which are based on the model laws of the National Conference of Insurance Legislators (NCOIL: undefined, undefined, undefined%) and the National Association of Insurance Commissioners (NAIC: undefined, undefined, undefined%). Today, 34 states regulate life settlements to protect life insurance policy owners who are considering a life settlement and more states are currently considering and adopting legislation. Each state life settlement law contains strong consumer protections and anti-fraud measures, including required consumer disclosures, privacy protection, and the requirement that life settlement providers and others report suspected fraud to insurance regulators.

For additional information, please visit www.lifesettlementinstitute.org

SOURCE The Life Settlement Institute CONTACT:Brian Smith, President, +1-330-342-7772 ext. 230 http://www.prnewswire.com

LOAD-DATE: February 16, 2010

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