WASHINGTON, Nov. 2 /PRNewswire/ — The Life Settlement Institute (LSI), the leading organization representing secondary market providers for life insurance, reaffirmed today its pro-consumer and pro-competition efforts to regulate life settlements.

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 Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL).

Today, 27 states regulate life settlements and require licensing, and establish clear roles and responsibilities, of life settlement providers and brokers, that protect life insurance policyowners who are considering a life settlement. Each of the state settlement laws contains strong consumer protections and anti-fraud measures, including required consumer disclosures, privacy protection, and the requirement that providers and brokers report suspected fraud to insurance regulators.

In 2006, LSI successfully lobbied for a new law in Maryland that requires (i) all compensation arrangements to be disclosed in life settlement transactions and (ii) all offers to purchase life insurance policies from life settlement companies to be furnished to the owner of the policy. In New York, LSI has advocated for three years for the passage of legislation that would have required licensing of life settlement providers and brokers and included a clear disclosure requirement to policyowners that a settlement broker represents the policyowner and owes a duty to the policyowner to act according to the policyowner’s instructions. LSI supports similar measures as those advanced in Maryland and New York in the model laws currently under consideration by the NAIC and NCOIL.

A life settlement is the sale of an unwanted or unneeded life insurance policy to a third party for more than its cash surrender value, but less than its net death benefit. Consumers are increasingly aware of and choose to benefit from the secondary market for life insurance. Payments from life settlements are generally three to four times more than the cash surrender of a life insurance policy. In the past five years, policy owners — including seniors, family trusts and businesses — have received more than $2 billion dollars above the cash surrender value of their policies through life settlements.

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.

Lancaster, PA — November 1, 2006 — Milestone Providers, a Pennsylvania-based life settlement provider, has announced the launch of its Full-Disclosure Initiative for life settlement transactions. The decision to launch the initiative comes after discussions with several of Milestone’s institutional investors. “Our approach has always been the same – open and transparent transactions. With recent developments in our industry, we have decided to initiate Milestone’s Full-Disclosure Requirements, and make full disclosure standard operating procedure for every transaction” stated Kristian Armstrong, CEO of Milestone.

A life settlement is the transaction whereby a life insurance policy is sold to an investor for a value exceeding the policy’s cash surrender value. Life settlements focus primarily on elderly individuals whose life insurance policies no longer fit their needs, or the cost of premiums have become burdensome. Due to the nascent nature of the industry, regulation has been slow to address several issues regarding certain aspects of life settlement transactions. Many states require transactional disclosure, however how these disclosure requirements are understood and posed to clients is open to interpretation.

Milestone’s Full Disclosure Initiative comes shortly after New York Attorney General Eliot Spitzer sued a leading industry provider alleging that policy sellers were defrauded, and that several industry participants breached their fiduciary duties to policy sellers. “We have had several calls from our institutional investors questioning the future value of any policy which might be purchased in a transaction where the broker or agent didn’t fully disclose their commission in the deal. These investors are now asking that we document full commission disclosures from the brokers and agents to the seller. This was certainly an influencing factor in our decision to launch this initiative at this time, and to require full disclosure by all parties to the transaction,” Milestone COO Douglas Lehman said. Full disclosure and open transparency is not a new concept for Milestone. “We have had Settlement Sheets, Commission Disclosure Acknowledgments, and listing-type agreements finalized for a long time. We have been waiting for the right time to launch this initiative. It is clear that the time is now.”

“The problem has been getting brokers and agents to agree to full disclosure of their commissions. Not all industry participants were ready to embrace full disclosure. We understand that full disclosure can be a problem for some of the close relationships between agents and their clients. However, in light of current market developments, we feel we need to protect the value of the asset class. Regrettably for some, full disclosure will soon become par for the course” Lehman further commented.

Ideally, Milestone’s initiative would require brokers and agents to fully disclose all commissions taken in a life settlement, in a contract with the seller. The life settlement brokers and life insurance agents would be required to provide a broker of record “listing agreement” contract with the seller, detailing all commissions to be paid on the sale of the policy (represented by a percent of the sale price for the policy), the term of the listing, and the exclusive nature of the listing. Any co-broker would be required to have a sub-agency agreement. This would reduce co-brokering fees and confusion in the bidding process, and maximize the amount of money to the insured, Milestone executives said. “Our focus is to create an environment where an individual seeking to sell a policy can do so without having to beg the question of whether or not [they] were treated fairly. It’s really quite simple; provide a fair, equitable, and transparent transaction where ethics aren’t jeopardized,” Armstrong said.

Milestone Providers, LLC has been involved in the life settlement industry since early 2003. Prior to market entry, the principals of Milestone conducted extensive market research and identified market inefficiencies and weaknesses. With significant systems build-out and the ability to handle high processing loads, Milestone offers clients the ability to realize quicker than average transaction times and efficient placement of funds.

Founded upon the highest degree of ethical standards and an unrelenting desire to bring continued efficiency to the market place, Milestone operates under the slogan of “We didn’t create the life settlement industry, we fixed it.”