NU Online News Service, Jan. 30, 11:50 a.m. – Six life settlement companies have started the Life Settlement Institute, Washington.

The new, nonprofit group will develop laws, regulations and business standards for the life settlement industry.

Life settlement companies, also known as viatical companies, pay older life insurance policyholders and sick policyholders for the right to collect the policy death benefits.

Critics have accused some small life settlement companies of swindling individual investors. But the companies that belong to the new institute get their cash from banks, insurance companies and investment banking firms, not from private individuals, institute organizers say.

The founding members of the institute are Coventry First L.L.C., Fort Washington, Pa.; Life Capital BV, San Diego, Calif.; Life Equity L.L.C., Hudson, Ohio; Life Settlement Corp. d/b/a Peachtree Life Settlements, Boca Raton, Fla.; Living Benefits Financial Services L.L.C., Minnetonka, Minn.; and Stone Street Financial Inc., Bethesda, Md.

Each member company must have initial financing of at least $50 million from an “acceptable institution,” institute organizers say.