Life Settlement Fraud

Wisconsin Life Settlement Bill

Senate Bill 513 is aimed at helping prevent Life Settlement Fraud in Wisconsin.

Currently the industry is unregulated in Wisconsin, which opens the door for fraud and abusive sales practices. Not to say that all life settlements are fraudulent – they certainly are not. AARP members fall into the age category where abuse typically occurs, which is why AARP is supporting this bill.

This bill will require full disclosure from life settlement providers, as well providing a licensing regime with continuing education requirements for brokers and consequences for defrauding consumers.

Full bill can be reviewed at:
www.legis.state.wi.us/2009/data/SB-513.pdf

Front paragraph:
Under current law, the owner of a life insurance policy that insures a person who has a catastrophic or life?threatening illness or condition, including AIDS or HIV infection, may sell the policy for an amount that is less than the expected death benefit under the policy in a transaction known as a viatical settlement. The person that makes the payment under the viatical settlement is known as a viatical settlement provider (provider) and must be licensed by the commissioner of insurance (commissioner). A person who, for a fee, offers or attempts to negotiate a viatical settlement between the owner of a life insurance policy and one or more providers is known as a viatical settlement broker (broker) and must be licensed by the commissioner. The commissioner may revoke, suspend, or refuse to renew a provider’s or broker’s license if the licensee misrepresented information in the application; engaged in fraudulent or dishonest practices or is shown to be untrustworthy or incompetent to act as a provider or broker; has been convicted of a misdemeanor or felony involving fraud, deceit, or misrepresentation; violated Wisconsin law regarding viatical settlements; or if licensed as a provider, failed to meet the minimum settlement payment requirements or demonstrated a pattern of making unreasonable payments to policy owners. Every provider or broker must maintain records for all viatical settlements and make those records available to the commissioner for inspection.

More info:
Life Settlement License
Wisconsin Life Settlement
Wisconsin Life Settlements

Richard Incandela

A two-time felon who Heritage Christian Schools officials say defrauded the school has been arrested in Florida on insurance fraud charges involving about $500,000.

Just before his arrest Monday, Richard Incandela, 57, attempted to solicit $528,000 from an undercover insurance investigator “to purchase life insurance policies not in existence,” according to an arrest affidavit filed in Hillsborough County, Fla. He was arrested on felony charges of scheming to defraud more than $50,000 and selling insurance without a license.

Then, on Monday, an insurance fraud investigator posing as the couple’s nephew met with Incandela in a St. Petersburg office. During that session, Incandela solicited money that he claimed would be used to purchase four insurance policies from two other people in deals known as life settlement transactions, Hirst said. In life settlements, people sell their life insurance policies to third parties who would then be entitled to any death payments.

Incandela was released from county jail on a $17,000 bond early Tuesday. It will be up to the Hillsborough County state’s attorney’s office whether Incandela should be formally charged with the crimes alleged in the arrest affidavit.

Incandela has two prior convictions, one for a $1.1 million fraud in Illinois and a second for grand larceny in Florida. Both convictions occurred in the early 1990s.

Source: Cary Spivak and Amy Hetzner of the Journal Sentinel