Viatical Attorneys For Federal Regulator Claims

The law firm of Beitchman & Zekian, PC, is a nationally recognized name in life settlement litigation. Based in California, we handle regulatory compliance matters and other regulator claims on behalf of clients throughout the country.

Our Los Angeles attorneys have handled numerous cases involving the Department of Corporations (DOC), the U.S. Securities and Exchange Commission (SEC), the Department of Insurance (DOI), attorneys general, and other state and federal regulators.

Most commonly, regulatory agencies investigate life settlement agents, brokers and funders for failure to comply with transactional laws, such as engaging in illegal stranger-originated life insurance (STOLI) transactions.

Questionable Rebating Practices

It is considered legal for a life insurance agent to rebate a certain percentage of the commission to his or her client. This reduces the overall cost to the insured and can help facilitate certain transactions. However, legal rebating practices can quickly enter the realm of the illegal, such as in this example:

• The insurance agent writes a check to the insured, who uses the agent's money to fund the premium. The premium then gets paid from the insurance company to the agent, who rebates it back to the insured.

In such a case, the policyholder has not actually paid for his or her own policy and has no insurable interest.

Fraudulent Life Expectancy Guarantee Bonds

Certain life settlement companies have chosen to offer life expectancy guarantee bonds to forestall complaints by investors about uncertain life expectancy estimates. These bonds promise to pay investors the amount that they would have received, had the policy matured when it was expected to.

According to the SEC's Office of Investor Education and Advocacy, however, not all claims related to such bonds are accurate. The SEC recently brought an enforcement action against a company charged with making fraudulent claims.