LISA Response: Letter: Darwin M. Bayston: Commentary piece wrong about life settlement industry

Category Other
Posted Date 06/27/2018
Publish By Providence Journal
Publish Date 06/27/2018
Rating Neutral

Robert DiMuccio’s June 20 Commentary piece (“Hurting R.I. consumers and economy”) provided false information to Rhode Island citizens.

A life settlement is not a product. It is the sale of a life insurance policy for an amount greater than its cash surrender value but less than its death benefit. It is not, as Mr. DiMuccio states, selling a policy “for an upfront payment that is less than its value.” Life settlements in Rhode Island are regulated by the department of insurance, like the insurance companies that sell the policies.

A life policy, as confirmed by the U.S. Supreme Court, is personal property and may be sold. The life settlement industry is a marketplace where consumers may sell policies no longer needed or affordable, often for four to seven times the cash surrender value.

The statement that Rhode Island “should not force reputable life insurance providers to apprise their policyholders about questionable products” is an intent to not disclose information to policyholders (required by H-7124 and S-2048) that may be beneficial to them. Mr. DiMuccio’s preference is for policies to lapse, creating greater profits for the insurance company by not having to pay death benefits.

He writes of “brokers who unfortunately have a record of fraud, abuse and exploiting vulnerable senior citizens.” Brokers who assist seniors in selling their policies are often the same ones who sell insurance policies in the first place. Settlement brokers, like life agents, are licensed by the state and are expected to act in the best interests of consumers. Consumer complaints about life insurance sales are in the thousands, while complaints about life settlement transactions are nonexistent.

Rhode Island consumers need the required disclosures that H-7124 and S-2048 provide.

Darwin M. Bayston

Winter Park, Florida

The writer is president and CEO of the Life Insurance Settlement Association.

DISCLAIMER: The trademarks and copyrighted material found on this page are property of their respective owners.