LSI Opposes Invester-Initiated Insurance Schemes:

Life Settlement Institute raises concerns over legislation to expand insurable interest definition by investor groups

WASHINGTON, D.C., (December 3, 2004) <ETH> The Life Settlement Institute (LSI) announced today that it has joined the efforts of a number of public officials and the American Council of Life Insurers (ACLI), the Association for Advanced Life Underwriting (AALU) and the National Association of Insurance and Financial Advisors (NAIFA) to oppose efforts to expand the state insurable interest laws in order to initiate life insurance on persons with whom investor groups would otherwise have no relationship.

Generally, the state legislation being sought would materially expand the rights of charitable organizations to have an Òinsurable interestÓ in its members and, therefore, have the authority to take out insurance on the life of its members. The primary purpose of expanding the ability of charitable organizations to acquire insurance on it members is to enrich investors, not the charity or the insuredÕs traditional beneficiaries.

These programs have recently been referred to with the misnomer of ÒInvestor-Owned Life Insurance,Ó but are more properly called ÒInvestor-INITIATED Life InsuranceÓ programs. Investor groups finance charities to initiate life insurance on their members and it is the investors, not the charities, who are guaranteed a profit from the scheme.

LSI stresses the importance of distinguishing life settlements from investor-initiated life insurance programs inasmuch as these new schemes lack a traditional purpose for the purchase of insurance comporting with standard insurable interest laws. As such, LSI, while opposing efforts by investors to expand insurable interest laws, continues to recognize the tremendous value that life settlements afford to life insurance consumers, and zealously supports providing consumers with the necessary access to the secondary market.

ABOUT LSI

LSI 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.

For more information about the Life Settlement Institute contact Michael D. Freedman (215) 836-8303 or visit www.lifesettlementinstitute.org.