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Life Insurance Finance Association Conference Reinforces Industry Support for Consumer Rights.

Overflowing Crowd Actively Participates in Discussions on Industry Regulation

NEW YORK -- At the first Life Insurance Finance Association conference, held Wednesday, Nov. 29, participants reinforced the importance of reasonable regulation of the life insurance premium-finance industry to protect consumer rights.

"There was overwhelming interest by all segments of the life-insurance industry in the conference and by the time everyone arrived there was standing room only," said Scott Cipinko, executive director, Life Insurance Finance Association. "Premium finance is a prominent topic that garners substantial interest, and our dynamic panel of speakers, including Louisiana Insurance Commissioner Hon. Jim Donelon and Hon. Gregory Serio, former superintendent of the New York State Insurance Department, covered reasonable industry regulation, the proposed draconian five-year prohibition on the sale of a policy and protection of consumer rights."

The Life Insurance Finance Association and most attendees expressed their concerns about the sale of stranger-initiated life insurance transactions that insurance regulators seek to stop by imposing a five-year ban on the re-sale of life insurance policies in the secondary market. The ban falls short of addressing the real concern of violations of insurable interest in stranger-initiated life insurance transactions and merely recharacterizes them as regulated life settlements. However, it was made clear these transactions have mutated, now relying on the moving of the ownership of trusts that own life-insurance policies used to evade the reach of the NAIC Viatical Settlements Model Act; therefore, the problem will not be resolved by the passing of such a five-year ban. The Life Insurance Finance Association is currently working on this issue with regulators to try to design a way to deal with stranger-initiated life insurance without endangering consumer rights, added Cipinko.

Legal experts agreed that the proposed five-year prohibition on the sale of a life insurance policy would be ineffective in fighting the sale of stranger-initiated life insurance. The experts also concluded the five-year ban will hurt consumers seeking to sell traditionally owned policies as well as policies financed through premium-finance loans which do not bear the characteristics of stranger-initiated life insurance after the standard two-year contestability period for estate planning purposes.

"Industry events like these help promote the reasonable regulation of the premium-finance industry by bringing all sides together openly to discuss hot-button issues," said Cipinko. "The magnitude of interest in the conference signifies a substantial hunger for an industry voice, which is why the Life Insurance Finance Association will continue to host more events like this conference."

For information of this year's Life Insurance Finance Association conference - sponsored by Wells Fargo; Lord, Bissell & Brook, LLP; and O'Melveny & Meyers, LLP - and upcoming events, visit www.lifaorg.org.

For more information about becoming a member of the Life Insurance Finance Association, contact Cipinko at 678-858-4001 or scipinko@lifaorg.org.

The Life Insurance Finance Association is a nonprofit, professional trade association and its members are comprised of individuals and companies involved in the life insurance premium finance industry. LIFA was founded to provide an open dialogue between and among life insurers, premium finance lenders, life insurance agents, brokers and insurance regulators, to provide consumer advocacy, and to foster a better understanding among participants in the life insurance and premium finance marketplace, state and federal policy makers, and the general public. For additional information, visit www.lifaorg.org.
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Publication:Business Wire
Date:Dec 7, 2006
Words:544
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