Life Insurance Settlement Association Reaffirms Support of Efforts by State Securities Regulators in Protecting Individuals Against Investment Scams

Category LISA
Posted Date 08/31/2011
Publish By Marketwire
Publish Date 08/31/2011
Rating Positive

Marketwire, 31 August 2011
The Life Insurance Settlement Association (LISA) today reaffirms its long-standing support of the efforts of state securities regulators in calling for increased protection and enforcement against schemes that target individual investors. LISA is a long-time proponent of laws that allow policyholders the opportunity to receive the highest value possible for their life policies, and to protect consumers and investors in life settlements from scams by perpetrators of fraud. LISA strongly supports increased educational efforts by state and federal securities regulators as well as stronger enforcement actions against fraudulent activities.

"Tough economic times continue for many people, and it is all too easy for scam-artists to steal money from individuals through unscrupulous investment schemes and illegal practices," said Darwin Bayston, LISA Executive Director. "If we've learned anything over the past few years, there is a need for increased education among investors and stronger enforcement against those who would defraud people of their savings," he continued.

LISA applauded the recent announcement by the North American Securities Administrators Association (NASAA) of their annual list of products and practices that threaten investors. The list focused on those schemes that would target "investors troubled by lingering economic uncertainty and volatile stock markets." To date, Georgia and Pennsylvania securities regulators have also issued news releases warning investors against these types of scams.

The NASAA list, while recognizing legitimate investments in life settlement contracts, noted a troubling new scheme called "Securitized Life Settlement Contracts" that combine " settlement contracts with traditional securities, such as bonds that supposedly guarantee a fixed return on a fixed date, regardless of whether the insured outlive their life expectancies." NASAA noted that this type of investment offered to individual investors has too often proven fraudulent and may include "worthless paper" issued by a bonding company that does not maintain sufficient assets to stand behind the guarantee, operates in unregulated environments, or does not exist.

"Life settlements offer attractive options for investment portfolios. Investors in life settlements include insurance companies, reinsurance companies, banks and financial institutions, public and private pension funds and hedge funds. Schemes that defraud individual investors through illegal structures and unregulated parties should be identified and stopped," said Bayston.

LISA supports NASAA's efforts at alerting investors as well as disseminating information about these illegal scams to state securities regulators nationwide. For the past decade, LISA has worked with NASAA as well as state securities regulators and legislators to ensure that investments in life settlements are regulated as a security, which would ensure federal and state registration of any offering to individual investors as well as require licensing of promoters of these investments. According to a June 2010 report on life settlements by the Securities and Exchange Commission, 48 of 50 states regulate investments in life settlements as a security under state securities laws.

About LISA

Established in 1994, the Life Insurance Settlement Association is the oldest and largest trade organization in the industry. Its goal is to promote the development, integrity, and reputation of the life settlement industry, and to promote a competitive market for the people it serves. LISA represents over 110 members with a wide variety of interests in the industry. For more about the association, visit

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