ORLANDO, FL–(Marketwire – November 17, 2010) – The Life Insurance Settlement Association (LISA) praised today’s decision regarding insurable interest by New York’s highest court. ”Consumers won a resounding victory today,” said Doug Head, LISA Executive Director. ”This decision emphatically affirms property rights and the vitality of the secondary market.” LISA was pleased to submit an amicus brief to the court.

In Kramer v. Phoenix, the New York Court of Appeals was asked by the U.S. Second Circuit Court of Appeals to determine whether New York insurable interest law prohibits an insured from procuring a policy and “immediately transferring” it “if the insured did not ever intend to provide insurance protection for a person with an insurable interest in the insured’s life.”

Although most states, including New York, now prohibit an immediate transfer under LISA-initiated life settlement legislation that requires a two year waiting period before resale, this opinion has far-reaching impact going forward, Head explained. ”The Court grounded its decision in insurable interest law going back to the 1800s, and definitively concluded that an insured can take out a policy for any beneficiary, and any purpose. Thus the ‘intent’ question is relevant under today’s life settlement laws even if the ‘immediate transfer’ question is not.”

Head noted that the Court expressly followed “the common law rule that an insured has total discretion in naming a policy beneficiary” and that “When one insures his or her own life, the wagering aspect is overridden by the recognized social utility of the contract as an investment to benefit others.” The Court made a “basic distinction between policies obtained on the life of another and those obtained on one’s own life.”

“The Court recited and rejected insurer arguments ‘that a policy obtained with the intent to assign it to a party lacking an insurable interest violates’ insurable interest,” said Head. ”This nails it down: Insurers’ attempts to construct an intent standard through endless litigation is a failure.”

Head noted that the New York court’s decision in Kramer follows the U.S. Fourth Circuit Court of Appeals decision in First Penn v. Evans in 2009, which concluded that “evaluating insurable interest on the basis of the subjective intent of the insured at the time the policy issues… would be unworkable and would inject uncertainty into the secondary market for insurance.” Head said, “we believe that the insurance marketplace, as a whole, will benefit from this assurance.”

“In both First Penn and Kramer, U.S. Courts of Appeals have directly addressed the question of whether an insured violates insurable interest by procuring a policy on his own life with intent to resell. The Fourth Circuit rejected that argument last year and the New York Court of Appeals has now told the Second Circuit the same thing,” said Head.

“This case is very important. Insurance is property. Carriers simply cannot second-guess why a consumer buys a policy on his own life. The insured’s reasons for buying a policy — including as an investment — are his own. The confidence of all in the insurance market is enhanced with this decision,” Head concluded.

Oct. 14–REPORTING FROM SACRAMENTO – Two state assemblymen not much known beyond their districts are vying for a statewide office that has ample authority over automobile, home and life insurance coverage and is getting more power from the landmark federal healthcare law.

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FOR THE RECORD:

Insurance commissioner: An Oct. 14 article in Business said Harvey Rosenfield of advocacy group Consumer Watchdog personally endorsed Democrat Dave Jones forCalifornia insurance commissioner. In fact, Rosenfield has not endorsed any candidate in the race.

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The winning candidate for insurance commissioner — either Democrat Dave Jones ofSacramento or Republican Mike Villines of Clovis – will have a chance to help set up state programs as part of President Obama ’s national healthcare overhaul.

The commissioner runs the California Department of Insurance, which oversees a $124-billion market. As one of the larger state agencies, it has an annual budget of $150 million and 1,100 employees.

And because the agency licenses 340,000 insurance professionals and more than 1,500 companies to ensure that customers are treated fairly and claims are paid on time, both candidates have said they won’t take campaign money from the industry.

How the commissioner regulates the insurance industry affects business and individuals “every day,” said Mark Savage , a senior attorney at the West Coast office of Consumers Union, publisher of Consumer Reports magazine.

Modern market economies depend on affordable and available insurance to help people deal with risk and plan for their future, Savage said.

As candidates, both Jones and Villines tout their pro-consumer credentials. But just what that means is a function of their opposing political philosophies.

Jones, an activist lawmaker, said he would be a strong regulator who would keep insurers on a tight leash. “The biggest issue is making sure that California consumers andCalifornia businesses are protected against abusive insurance industry practices,” he said.

Villines wants to limit government intervention in the market and use his office to bring down costs by fostering competition. “If the costs are too high or the providers too few,” he said, “the businesses that are now struggling to keep their doors open in this economy will have one more reason to move their jobs to another state.”

Jones’ and Villines’ views particularly diverge on health insurance, though both support a new California law that creates a state-run exchange to provide coverage for people who can’t get private insurance.

Jones would go further to keep a lid on rates and provide support for the state’s 6 million people without health insurance. In the past, he has authored bills — never passed — to create a Canadian-style, government-run single-payer system.

This year, a Jones-sponsored bill signed into law by Gov. Arnold Schwarzenegger bans price discrimination against women in the individual health insurance market. Villines opposed the measure because he said it would increase costs.

Jones also wants to curb skyrocketing premiums for individual health insurance with proposals to give the commissioner the same power to approve healthcare rates that the commissioner now has over most types of property and casualty insurance.

“I believe this is one of the missing pieces of U.S. health reform,” he said.

Villines supports creating a strong, government-backed healthcare safety net to care for people who need help, while maintaining “a vibrant private sector” for for-profit companies. “We shouldn’t be afraid to have more people insured,” he said.

Villines also would monitor insurers closely to make sure they only cancel a sick person’s coverage if the companies can prove that the insured submitted a seriously fraudulent application.

But overall, Villines said, he opposes the president’s health insurance plan, especially its mandate that all individuals participate in the program.

With less than three weeks until election day, the leaders of three major consumer organizations have endorsed Jones.

Harvey Rosenfield , author of Proposition 103, the 1988 initiative that created the job of elected insurance commissioner, personally endorsed Jones. His Santa Monica group, Consumer Watchdog, is prohibited by law from making similar endorsements.

Amy Bach , executive director of San Francisco’s United Policyholders, also personally endorsed Jones. However, Bach noted that Villines canceled three appointments to meet with her.

The Consumer Federation of California in San Mateo endorsed Jones. It gave him a 99% pro-consumer voting record on the group’s “legislative scorecards” and gave Villines a 15% score.

Jones and Villines pointedly distanced themselves from the politically powerful insurance industry by refusing to accept campaign contributions from insurers.

Jones returned $8,400 in contributions collected earlier from insurance companies by his 2008 Assembly committee. In contrast, Villines transferred $54,300 in previous insurance contributions to his insurance commissioner’s campaign, state filings show.

Villines said he had “not taken a penny from insurance companies since I announced I was running” for insurance commissioner in June 2009.

Villines, though, is benefiting indirectly from insurance company financial support.

Various companies contributed to a political action committee controlled by the California Chamber of Commerce. The committee is airing independent television advertisements in praise of Villines and in opposition to Jones.

In September, the committee spent nearly $2 million on a pro-Villines TV blitz. This month it reported spending $280,000 on “media production” for ads against Jones.

Recent campaign finance report showed contributions from insurance companies totaling$1.26 million. The largest was $525,000 from George Joseph , chairman of Mercury General Corp.

Jones said he expected the chamber’s TV campaign against him to cost more than $5 million.

The chamber said its expenditure against Jones was part of its “long history of electing pro-jobs candidates.”

Villines said he had no control over what the chamber did.

For his part, Jones held a fundraiser last month in his hometown of Chicago that was attended by Florida lawyer Norman Taplin and his associates, including former insurance executives and regulators.

Taplin said on his website that “he utilizes his 30 years of experience as an insurance regulatory attorney to give his clients privileged access to the country’s insurance/regulatory decision makers.”

Jones said he received the contributions as part of a larger breakfast fundraiser. He said he was unaware of the background of Taplin and the other contributors until getting an inquiry from a reporter.

On Oct. 7, Jones returned $5,000 in contributions to Taplin and his associates.

http://www.wholesaleinsurance.net/

DENVER–(BUSINESS WIRE)– President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law on July 21, 2010, setting into motion a series of studies and regulatory analyses that may permanently alter the way the financial services industry interacts with American consumers.(1) As indicated by its title, the Wall Street Reform and Consumer Protection Act aims to more closely regulate banks while protecting consumers from predatory lenders and other deceptive practices.

Transamerica Life Insurance Company now offers two separate white papers describing how the new financial reform law affects the business practices of financial service providers and what it means for consumers. Financial professionals can use the “Wall Street Reform and the Financial Services Industry” piece to educate themselves while sharing the “Wall Street Reform and the American Public” version with their clients.

“The white papers provide an analysis of the matters most important to financial professionals and their clients,” says Blake Bostwick, Chief Operating Officer of Transamerica Capital, Inc. “Creating informational resources and thought leadership pieces will be a continued focus for us. We plan to roll out The Forum in 2011, which is a comprehensive program that will help educate and guide the financial professionals we work with, so they can better serve their clients.”

In the “Wall Street Reform and the Financial Services Industry” analysis, the new law is explained, including:

• A description of potential effects for a financial professional and their business
• The components of proposed industry-wide oversight
• The implications of industry-specific oversight
• An estimated cost to the financial services industry

The “Wall Street Reform and the American Public” edition describes how the new law affects consumers, such as:

• The establishment of new consumer education programs
• Revised mortgage lending rules
• A new government program offering free credit scores

Transamerica’s examination of the latest financial regulatory overhaul is a useful addition to a financial professional’s practice, enabling them to better educate themselves, and can assist them in explaining the implications of the new law to their clients.

Financial professionals may obtain both versions by calling the Transamerica sales desk at 1-800-851-7555. Investors interested in learning more should speak with their financial professional or contact the customer care group at 1-800-525-6205.

1. WhiteHouse.gov. President Obama Signs Wall Street Reform: “No Easy Task”.WhiteHouse.gov. [Online] July 21, 2010. http://www.whitehouse.gov/blog/2010/07/21/president-obama-signs-wall-street-reform-no-easy-task.

Annuities issued by Transamerica Life Insurance Company in Cedar Rapids, Iowa, and Transamerica Financial Life Insurance Company in Harrison, New York. (Transamerica) Annuities are underwritten and distributed by Transamerica Capital, Inc. Transamerica Financial Life Insurance Company is licensed in New York.

About Transamerica

Transamerica companies market an array of life insurance, annuities, retirement solutions and investments designed to help individuals, families, and businesses build, protect and preserve their assets. The Transamerica companies are members of the AEGON companies. For more information about Transamerica, visit www.transamerica.com.

About Transamerica Capital, Inc.

Transamerica Capital, Inc. is the underwriting and wholesaling broker/dealer for variable annuities issued by Transamerica Life Insurance Company and Transamerica Financial Life Insurance Company. All of these companies are AEGON companies. Transamerica Capital, Inc. works with financial professionals at wirehouse, regional, independent, and bank firms to provide a variety of insurance and investment solutions.

About AEGON N.V.

AEGON N.V., based in The Hague, The Netherlands, has life insurance, pension and investment businesses in over 20 markets in the Americas, Europe and Asia. AEGON companies employ approximately 28,000 people and have over 40 million customers across the globe. For more information about AEGON, visit www.aegon.com.

http://www.wholesaleinsurance.net/

According to a BBC article today, “The US senate has voted to tighten up regulation of credit rating agencies as part of measures to prevent another financial crisis.” Pointing out that although banks acted recklessly, by selling high-risk products with low-risk ratings, the rating system is partially to blame for the financial crisis in the US, because it was the rating system which allowed the banks to do so.

Rating Agencies:

• Moody’s
• Standard & Poor’s
• Fitch

In order to prevent bank crises, in the future, the US senate is debating legislation that will tighten financial regulation. “The plans for tigher regulation come amid reports that several major Wall Street banks are being investigated by New York’s attorney general over whether they misled rating agencies over mortgage-related deals in the run-up to the crisis,” Rating agencies face new US regulation, BBC News.

Well might the reader understand that the credit crunch has landed Americans on a fixed income in an especially sorry state, especially when the fed puts a freeze on their Social Security income.  For the afflicted geriatrics, a heretofore stigmatized source of financial relief is drawing greater popularity in recent months: many seniors possess some life insurance and can effect a “senior settlement.”  In a life insurance settlement, the policyholder sells his policy in exchange for a portion of the death benefit.  He gets to make use of some money when he needs it, and when the seller dies, the buyer is assured of a death benefit in excess of the amount he paid for the settlement.

Alas, state governments are also hard pressed for cash at present, and none of them budgeted and saved as carefully as our insured seniors did.  In reaction to the rising popularity of life insurance settlements, government officials have dipped their hands in even deeper.  April legislation raised taxes on sales of life insurance settlements and declared, moreover, that whereas life insurance death benefits are normally protected from taxation, the death benefit shall be taxed for the buyer of a settlement.

Thus, both buyer and seller are left with less incentive to enact their business, but the policyholder has scanty alternative.  If cash is already short, his policy risks lapsing because of nonpayment.  Surrender is preferable to lapse, but it is not likely to recover as much capital as settling would do.

This matter bears effects on a grander scale, as well: the imposed dis-incentive impairs the life insurance industry’s—an industry which asserts never to have defaulted on a legitimate claim—ability to adapt itself to the upset economy in a time of financial straits.  It is hard to drum up sympathy for the industry, though.  For the past fifteen years (or perhaps since the days of the robber barons) big business has been a popular target.

Regrettably, the imbroglio of legislation makes it nigh impossible for any but specialists to discern exactly how legal measures such as those mentioned here harm them.  Policyholders who wish to sell their life insurance policies for a settlement are advised to consult a tax advisor.