LSETTLEshapoST.xml Shapo interview–go page xx, with –35 lines. Graphic: none. ** This an edited version of an article that appeared in Web news on Sept. 2.

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State lawmakers and regulators have spent years working on viatical and life settlement laws and regulations, but Nat Shapo says the rules still need work.

“Many jurisdictions either have no settlement law, or regulate viatical settlements but not life settlements, thus providing a haven for questionable practices,” says Shapo, the new chief compliance officer at Coventry First L.L.C., Fort Washington, Pa.

Shapo, only 37, served as Illinois director of insurance before going into private practice as a lawyer 2 years ago.

Shapo says a life settlement deal with a sophisticated, older investor who has a life expectancy of 10 years is far different from a viatical arrangement with a young insured who is facing a good deal of time and financial pressure.

“Part of the natural growth of the secondary market will involve the recognition that life settlements are basic financial planning tools separate and distinct from viatical settlements, which have a very unique and very narrow reach,” Shapo says.

Shapo rejects arguments that the life settlement market will hurt life insurers by cutting lapse rates.

“A well-functioning secondary market should benefit carriers by creating demand in the primary market as consumers see the full value of purchasing a policy,” Shapo asserts.