LSI Anti-Fraud Initiative

LSI Announces National Viatical Settlement Fraud Prevention Initiative

07/12/2002 PR Newswire (Copyright (c) 2002,

PR Newswire)WASHINGTON, July12 /PRNewswire/ --

The Life Settlement Institute ("LSI") announced yesterday a national viatical settlement fraud prevention initiative. The initiative's first charge will be to explore the creation of an anti-fraud database similar to the Medical Information Bureau used by the insurance industry. The database will become a repository of information to aid life settlement providers, and support professionals as well as government regulators in tracking fraudulent or suspicious behavior in transactions. The database will be designed to identify (i) policy sellers or insureds that have fraudulently represented their medical condition, (ii) brokers that have engaged in questionable conduct and (iii) other professionals -- such as doctors or financial advisers -- that have engaged in questionable conduct. Preliminary research will be conducted to explore potential exposure to liability including issues of immunity, privacy and defamation suits in connection with developing such a database. The ultimate database will comply with all applicable federal and state laws, compliment other government anti- fraud initiatives, and be created in such a way as to safeguard the dissemination of personal and private information. LSI will encourage participation by other responsible parties including insurance companies.

LSI is a trade association that represents institutionally funded companies involved in the life settlement business. The financing for LSI members comes exclusively from sophisticated financial institutions, including multi-national banks, international corporate conglomerates and global insurance companies. LSI members do not use individual investor funds to purchase policies.

LSI strongly supports the efforts of regulatory agencies and law enforcement throughout the nation that have aggressively investigated and prosecuted viatical fraud. At present, the greatest concern of regulators relates to the sale of interests in insurance policies to private investors without adequate disclosures and protections. LSI members only use institutional funds to purchase policies and believe that an investment in a life insurance policy by a private investor is an extremely risky proposition. David M. Lewis, President of the LSI, in announcing the anti-fraud initiative, stated: "LSI's position is that the appropriate way to purchase interests in life insurance policies is through the use of pools of capital that can purchase a large number of policies and thereby spread the risks related to such investments. Individual, private investors do not normally have the capital and expertise needed to participate at such levels. Companies that lure private investors into such investments should be closely regulated, and those that are taking advantage of such investors' lack of knowledge should be put out of business."

LSI recently presented formal testimony before the US House of Representatives in which it supported the amendment of the Federal Securities Laws to clarify that the sale of interests in viaticated insurance policies to private investors is an "investment contract" and therefore a "security" under Securities Act of 1933. The anti-fraud initiative announced above is LSI's next effort in support of law enforcement and regulatory efforts.

ABOUT THE LIFE SETTLEMENT INSTITUTE:
The Life Settlement Institute is a not-for-profit association made up of six institutionally funded, privately owned life settlement companies. The Life Settlement Institute works with government regulatory agencies, legislators and the life insurance industry to promote strict regulations and comprehensive standards and practices for life settlements.

CONTACT: Leyla Roshanian of the Life Settlement Institute, +1-301-951-2130, or lroshanian@lifesettlementinstitute.org.

MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X37287615 /CONTACT: Leyla Roshanian of the Life Settlement Institute, +1-301-951-2130, or lroshanian@lifesettlementinstitute.org/ 07:05 EDT Contact: /CONTACT: Leyla Roshanian of the Life Settlement Institute, +1-301-951-2130, or lroshanian@lifesettlementinstitute.org/ 07:05 EDT