Florida Department Is Sued Over Viatical Company Practices
The Florida Department of Insurance is the target of a multi-million dollar lawsuit by investors who say the department failed to protect them from fraud perpetrated by American Benefits Services, Lake Worth, Fla.
The lawsuit accuses the state insurance regulators of knowing that American Benefits Services used deceitful insurance practices and allowing the company to continue to collect investors money anyway.
American Benefits sold viatical settlements, which are agreements in which existing life insurance policies are bought by viatical settlement providers and re-sold to investors.
The life insurance policies are sold for a percentage of the face value, and the investor collects the death benefit when the insured dies.
But, according to the suit, American Benefits did not spend investors money on life insurance policies. Instead, the suit alleges that American Benefits Services and its partner, Financial Federated Title & Trust, in Broward County, Fla., used investors money “to fund lavish and ostentatious lifestyles.”
Plaintiffs attorney Benjamin Schwartzman, The Grant Law Firm, Seattle, says, the department received “cogent proof” that American Benefits Services was selling fraudulent viatical settlements.