Regulation

Most of the current state legislation regarding settlements derives from the life insurance industry's own licensing and oversight requirements. These are contained in the Viatical Settlements Model Act, adopted by the National Association of Insurance Commissioners (NAIC) in 1994. The act was written to ensure that only stable financial institutions could participate, to formulate pricing guidelines for fair payment to consumers, and to establish fair trade, auditing and monitoring standards for providers. The state insurance departments are responsible for regulation in each state.

LPHI, through its subsidiaries, is licensed by the State of Texas to operate in the life settlement industry and is regulated by the Texas Department of Insurance.

The Company has worked closely with regulators in developing reasonable regulations for the industry. Some of the specific types of regulations that have come forth in the life settlement industry are listed below and since they pertain solely to LPHI and its business practices, have created a competitive advantage for LPHI in the marketplace.

Court Rulings

SEC Case

>> Securities & Exchange Commission VS Life Partners, Inc.
>> 87 F.3d 536, 318 US App D.C. 302

Court of Appeals Hands SEC Second Defeat in Life Partners Case

Waco, TX---(Business Wire)---Dec. 23, 1996 ---The US Securities and Exchange Commission was handed it second defeat this year in its attempt to persuade the US Court of Appeals to re-hear its ill-fated case against Life Partners, Inc. (LPI).

On July 5, 1996 the Washington D.C. based Court of Appeals threw out the SEC's case against Life Partners and upheld LPI's assertion that its purchase of viatical settlements on behalf of private clients does not constitute securities transactions and, therefore, are not subject to regulation by the SEC.

LINA Case

>> Court Ruling for Lina Case Nov 1998

LPI Wins Attorney's Fees

A federal court in Waco, Texas has ordered Life Insurance Company of North America (LINA) to pay $49,800 in attorney's fees to Life Partners, Inc. (LPI) for a case LINA lost in November, 1998.

At that time, U.S. District Court Judge Walter S. Smith Jr. ruled that LPI is not required to be licensed in New York in order to buy a policy from a New York resident and that LINA is obligated to honor the transfer.