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Press Release

Florida Office Of Insurance Regulation Revokes License Of Mutual Benefits Corporation
Thursday, March 31, 2005
Contact:   Valerie Beynon, APR
                850/ 413-2515
 
Tallahassee – Florida Insurance Regulation Commissioner Kevin McCarty issued a consent order revoking the license of viatical settlement company, Mutual Benefits Corporation, for violations of Florida and federal laws involving securities violations, fraud and misrepresentation. The Receiver of Mutual Benefits Corporation signed the consent order agreeing to the revocation after obtaining permission from the United States District Court.
 
The action follows lengthy investigations by the Florida Office of Insurance Regulation (OIR) and the Securities and Exchange Commission (SEC). OIR issued an order suspending Mutual Benefits' license to act as a viatical settlement provider in Florida in May 2004. Additionally, the U.S. District Court, for the Southern District of Florida, authorized the SEC to seize the assets of the Ft. Lauderdale-based company and placed it in federal receivership.
 
The company was charged with racketeering and 15 counts of investor fraud based on an investigation by the Division of Insurance Fraud.
 
Viatical settlements are agreements in which existing life insurance policies may be purchased by viatical settlement providers and re-sold to investors. The life insurance policies are sold for a percentage of the face value and, upon the death of the insured, the investor collects the policy benefit. The company used investor money to purchase $1.55 billion in life insurance policies.
 
"Mutual Benefits utilized a Ponzi scheme, defrauding investors and creditors of millions of dollars," said McCarty. "I refuse to allow this business to fleece another Floridian out of their life savings."
 
McCarty also praised the work of investigators from OIR, the Department of Financial Services and the SEC in the case.
 
OIR's investigation revealed that Mutual Benefits did not escrow adequate funds to pay future policy premiums, did not honor contractual obligations, issued improper viatical settlement contracts, used unlicensed sales agents, failed to adequately disclose information to investors, and dealt in fraudulently obtained policies. Investigators also discovered that Mutual Benefits had transferred a total of $7.6 million between accounts to cover premiums. Mutual Benefits is currently a defendant in various federal and state actions brought by investors, beneficiaries and viators (those who sell their policies at a discount).
 
Any investor inquiries should be directed to the receiver for MBC, Roberto Martinez, at (305) 577-1099.

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