SPRINGFIELD — In Illinois’ intense debate over the cost of medical malpractice, insurance companies and trial lawyers are often bitter enemies. Kim Presbrey is determined to change that.A former president of the Illinois Trial Lawyers Association, Presbrey has started an insurance company promising doctors more choice and better deals on expensive malpractice coverage.

The Aurora attorney is pumping a lot of money and hard work into challenging the state’s major medical insurance company, a doctor-owned business that has more than 65 percent of the malpractice market. Presbrey predicts his new Doctors Direct Inc. will make money for him and cut costs for doctors feeling the pinch of rising insurance costs.

”We expect to make money,” he said. ”To the extent that we are able to decrease their premiums at some level, I think we’ll save everybody money.”

It may even pay off for the Illinois patients who need care that’s growing more expensive and inaccessible.

That was the goal last year when state officials approved changes in the law meant to encourage more competition for malpractice insurance.

Some doctors were fleeing the state or retiring because of rising insurance premiums — some of which had more than tripled, topping $100,000 a year in some cases. Doctors and insurers blamed the increases on out-of-control lawsuit awards, while trial lawyers and victim advocates blamed insurance mismanagement.

In response, legislators approved some limits on lawsuit awards but also strengthened state oversight of doctors and insurers. The major insurer, ISMIE Mutual Insurance Co., was forced to promote competition by opening its ratemaking formulas to other firms.State regulators say the result is what they hoped for.

“The marketplace is increasingly competitive, and that competition s going to benefit the physicians and surgeons,” said Michael McRaith, director of the state Division of Insurance. ”It’s going to benefit all of us who pay for health care.”

The creation of Doctors Direct is not the only effect of the new law. ISMIE cut its rates 5.2 percent after McRaith ordered the company to try to cut them. Four other insurers cut their annual base rates, too. Medical Protective Co. cut prices 32 percent and announced plans in October to expand in Illinois.McRaith said other companies also are considering writing new policies.

But officials at ISMIE, which was created by the Illinois State Medical Society, say Doctors Direct may find success elusive.

“If they think they can make money and make big money … they’re going to be really surprised,” said Dr. Harold Jensen, ISMIE’s chairman.

Found here.

Because the cost to repair one’s credit after identity theft is often greater than the amount of actual money taken, consumers are beginning to turn to the insurance industry for protection.

Identity theft insurance, unlike most other types of insurance, does not offer a claim payout.
Instead, it pays for the repair of the policy holder’s identity, most often by hiring a specialized identity restoration firm.

Buying a policy with full restoration services is essentially paying to avoid the headache of contacting credit bureaus and consumer agencies. Theft resolution firms also offer knowledge and experience for a more thorough credit cleansing.

But some question the value of the plans.

“I don’t think that any identity theft insurance plan that I’ve seen is going to provide you with something you can’t do yourself,’ said Janet Jenkins, an administrator in the state Department of Agriculture, Trade and Consumer Protection.

Necessity?

Claudia Bourne Farrell, spokesperson for the Federal Trade Commission, said reports of identity theft have increased each year, along with reports of other fraud.

“I think 10 years ago the term ‘identity theft’ was not in general use,” Bourne Farrell said. “Now almost every one has heard of it and understands what it is.”

According to the FTC’s ID Theft Clearinghouse, Wisconsin had 2,782 reported cases of identity theft in 2005, or 0.05 percent of all the people in the state.

Several said victims of identity theft do not suffer out-of-pocket costs. The true costs of identity theft are in restoring personal reputations, they said.

In its latest estimate, the FTC found victims spend an average of $500 and 30 hours repairing their identity.

Numerous government and consumer advocacy groups offer checklists and instructions for fixing broken status.

Jenkins said for those who do not feel comfortable or simply do not want to spend the time sifting through credit reports, these policies could be a good choice.

“What you need to do if you’re thinking about it, no matter what you’re spending, is look into exactly what you’re getting,’ Jenkins said. “What help are they providing? Are they simply telling you what you need to do, or are they going to actually do it for you?”

West Bend Mutual Insurance began offering identity theft coverage in 2003, and now 19,105 of its policy holders carry the endorsement on their homeowners’ insurance.

In July, it partnered with Identity 911 of Scottsdale, Ariz., to offer their customers identity theft resolution services.

In West Bend Mutual’s version of the insurance, once a claim is filed, a personal advocate handles the legwork of repairing the theft damage.

The advocate handles restoring a client’s credit and filing a fraud report. Typically the victim’s time involved is cut down to phone calls with the advocate and signing papers.

“I look at it, as with any type of insurance, it’s there if something happens. Then if my identity is stolen, I don’t have to worry about returning my good name to where it was,” said Scott Wittliff, West Bend Mutual property specialist.

The endorsement is relatively inexpensive – West Bend Mutual’s policy is $15 for a year of coverage and national averages are in the $25 to $60 ballpark.

Dan Wolfgram, personal lines manager for R&R insurance, said the low price was an indication few claims had been filed. Still, he said that five to seven policyholders add the endorsement each week.

Not in it for the money

Jenkins said some identity thieves can take out credit cards and loans in someone else’s name. Others can use the information to get insurance benefits for which they cannot or do not wish to pay, she said.

Jenkins also said as the federal government begins to bear down on illegal immigrants, more and more people may become desperate for documents to prove they are allowed to live and work in the U.S.

“You can get about $60 on the black market for a social security number with a date-of-birth,” said Lance Gordon, executive director of Prepaid Legal Services in Waukesha. “A photo ID that can pass for the buyer can fetch around $200, a price that could rise with demand from those fearing deportation.

“There are a lot of laws cracking down on them and there are a lot of people desperately trying to prepare themselves,” he said.

Sophisticated thieves target large databases.

In May, the U.S. Department of Veterans Affairs announced a duplicate database was stolen from an employee’s home. Inside were the names, social security numbers and dates-of-birth for as many as 26.5 million people, including tens of thousands of personnel currently deployed or on active duty.

As a veteran, Gordon received a letter warning him of the information loss.

Law enforcement recovered the database in August, and the VA has enlisted a fraud analysis company to search out misuse of the personal information.

Information can also be culled from deep inside the memory of trashed technology like computers and cell phones.

Besty Wilcox runs a computer recycling program as director of the Washington County Volunteer Center. She encourages a complete memory erase when donating a computer for reuse.

She said trashing the computer, opening the PC’s cabinet and physically putting the hard drive through a drill press is not overkill.

Found here.

Sales of new homes in the U.S. rose more than forecast last month, another sign that the worst of the housing slump may be over.The 3.4 percent increase to an annual sales pace of 1.047 million followed a rate of 1.013 million the prior month, the Commerce Department said today in Washington. Economists had predicted a gain of 1.6 percent. The supply of unsold homes at the current sales rate fell to the lowest since May.

Today’s figures, along with the jump in housing starts reported last week, suggest the industry downturn that helped slow economic growth this year might not have the same impact in 2007. The year-on-year increase in median house prices last month was the most in five months.

“We might not be at the bottom, but we’re getting very close to it,” said Jason Schenker, an economist at Wachovia Corp. in Charlotte, North Carolina.

Still, the number of unsold dwellings — including homes not started, under construction and completed — remains near a record. A separate report today from the Mortgage Bankers Association showed mortgage applications declined last week.

Economists had expected sales to rise to a 1.018 million rate in November from a previously reported 1.004 million, according to the median of estimates in a Bloomberg News survey.

The Standard & Poor’s Supercomposite Homebuilding Index climbed 1.9 percent to 699.51 as of 2:13 p.m. in New York. The S&P 500 index rose 0.7 percent. Treasury notes weakened.

The median price of a new home rose 5.8 percent in November to $251,700 from $237,900 a year earlier, today’s report showed. It was the biggest year-over-year increase since June.

Homes for Sale

The number of homes for sale fell to a seasonally adjusted 545,000 during the month from 558,000 the prior month. A record 573,000 homes were on the market in July. The supply of homes at the current sales rate dropped to 6.3 months’ worth from 6.7 months’ worth in October.

The number of homes completed and waiting to be sold rose 51 percent to a record 169,000 in November from the same month last year. Sales of new homes were down 15 percent in November from the same month last year.

“It looks like we’ve stabilized” in sales, said Kevin Harris, chief economist at Informa Global Markets in New York. At the same time, he said the record number of homes completed and waiting to be sold, was “from a micro, business point of view very important to the builders.”

Seasonal Adjustments

Harris said housing data in the final months of the year were frequently skewed by seasonal adjustments. “I’m not sure we saw a much better month” because the end-of-year data is “too messed up to know that,” he said.

Sales rose in three of four regions. They increased 22.5 percent in the Northeast to a 49,000 annual rate; 22.4 percent in the Midwest to a 175,000 pace; and 19 percent in the West to a 294,000 rate. The rise in the Midwest was the biggest since December 2004. Sales fell 9.3 percent in the South to a rate of 529,000.

A report tomorrow from the National Association of Realtors may show that sales of existing homes in November fell to a 6.19 million pace from 6.24 million the prior month, according to a Bloomberg survey.

New-home sales are a more timely barometer of the housing market because they are recorded when a contract is signed. Most sales of existing homes, which comprise about 85 percent of the residential real estate market, are recorded when a contract closes and reflect buying decisions made months earlier.

Industry Forecast

The Realtors’ group on Dec. 11 forecast 1.06 million new- home sales for 2006, the fourth-best year on record. The figure would mark an almost 18 percent decline from last year’s all- time high. The Realtors expect new-home sales in 2007 to decline 9.4 percent to 957,000.

The housing market suffered its worst contraction in 15 years last quarter after average price increases of 60 percent over the previous five years put home ownership out of the reach of many Americans.

Home construction in the third quarter fell at an annual rate of almost 19 percent, the government’s latest report on gross domestic product showed. The decreased helped slow the economy to a 2 percent pace, from 5.6 percent in the first quarter.

Fed Stance

The Federal Reserve has been seeking to cool the economy enough to keep a lid on inflation. After raising its key lending rate 17 consecutive times through June, the Fed has held the rate unchanged during the last four policy meetings. The median forecast in a Bloomberg survey of 76 economists taken early this month forecasts the Fed may begin cutting rates in the second quarter.

Slower-than-expected growth in recent months has pushed Treasury yields lower, holding the rate on 30-year fixed mortgages to under 6.2 percent for the last month, compared with a high for the year of 6.8 percent reached in July. The Mortgage Bankers’ Association’s index of purchase applications are up almost 4 percent from a three-year low reached at the end of October.

Fed Chairman Ben S. Bernanke said Nov. 28 that the slowdown in housing didn’t appear to be spreading to the broader economy.

The housing slowdown is costing jobs. Builders shed 53,000 workers in the last two months, according to government reports. Manufacturers shed 59,000 workers in the same period, while goods producing companies, some at companies that produce housing-related supplies or products, cut 102,000 workers.

Permits

Building permits in November fell to a 1.506 million-unit pace, the lowest in nine years, the Commerce Department reported Dec. 19.

The number of new homes available is close to a record. They have averaged 555,000 this year through October, compared with 351,000 during the past 10 years, according to government figures.

Existing-home sales inventories are also near a record, averaging 3.515 million this year. Cancellations of purchase contracts, which aren’t counted in the government’s numbers, have mounted.

“That’s growing,” said Logan. “There is even more inventory than actual inventory numbers suggest.”

Hovnanian Enterprises, New Jersey’s largest builder, on Dec. 18 reported a fourth-quarter loss on cancellations of new- home orders. Hovnanian customers canceled 36 percent of their contracts in the period, an increase of 25 percent, the company said.

“We didn’t have this in other slowdowns, customers walking away,” Chief Executive Officer Ara Hovnanian said in an interview on Dec. 19.

Found here.

AUGUSTA (Dec 22): A special health-care commission empowered by the governor reaffirmed its support Tuesday for raising sin taxes to pay for the Dirigo Health subsidized insurance program, and also recommended the state consider requiring employers to offer health insurance and individuals to buy it.

The proposed sin taxes, including an increase in taxes on cigarettes, beer and wine — and new taxes on soda and snacks — would raise $67 million if all were enacted. The governor’s Blue Ribbon Commission on Dirigo Health also recommended that some way be found to collect from insurance companies or providers the $5 million to $8 million saved in bad debt and charity care as a result of the Dirigo Health initiative.

Gov. John Baldacci must now approve the report and pass his recommendations on to the Legislature, which will have the final say.

If the Legislature doesn’t approve the taxes, the state next year could revert back to a $34 million “savings offset payment,” which is charged to private insurance companies and self-insured businesses, and ultimately passed onto consumers.

The state is already collecting a $43.7 million savings offset payment to cover 12,500 people in 2006. The insurance plan, called DirigoChoice, is administered by Anthem and subsidized by the state on a sliding scale based on the income of those enrolled.

Part of the money also has been used to expand traditional Medicaid to 5,090 low-income parents. The point of the Dirigo Health program is to reduce the number of uninsured in Maine.

Asked if the governor would approve a hike in sin taxes, Trish Riley, head of the Office of Health Policy and Finance, said she expected Baldacci to give the report serious consideration based on the diverse backgrounds of the members he had appointed.

“He was clear that if they came up with recommendations, he wanted to look really seriously at them,” Riley said.

The commission, which included representatives of hospitals, doctors, insurance companies, major employers, labor unions and affordable health-care groups, approved the sin tax hikes by sizable majorities.

Members also called for the state to look at the possibility of mandating that businesses of a certain size be required to offer health insurance or pay a fee, and individuals making more than 400 percent of federal poverty — or $39,200 annually — be required to purchase some type of coverage.

Massachusetts has become the model for such mandates as it moves to implement its plan for universal coverage in 2007. Under the law there, individuals have to buy coverage — just like drivers have to have auto insurance — or face a fine. Those who can’t afford it will get a subsidy from the state. Employers also have to offer insurance, and if they don’t, have to pay $295 a year per employee into a pool.

One of the key issues in Maine will be deciding what size company could be subject to the mandate, given that 79 percent of businesses in Maine employ fewer than 10 people. The concern is a mandate on a company that small would be an economic hardship.

But commission member Joan Donahue, who owns a small home care company, said if big companies are asked to provide health insurance, so should small ones.

“We all want to hold the big-box stores accountable,” she said. “I find it disturbing as a small business owner in Maine that we’d hold ourselves any less morally responsible.”

The commission also voted to study other changes in health insurance law that would allow the merging of individual and small group markets to spread out the risk of individuals, whose claims tend to be higher. It also recommended looking at some form of a high-risk pool in Maine, where the people most expensive to insure would be segregated from the rest.

There also was support for another study committee to look at health-care cost drivers in Maine, including the cost of providers and insurance.

Found here.

PHILADELPHIA, Dec. 20 /PRNewswire-FirstCall/ — President Bush today signed into law a bill making mortgage insurance premiums tax deductible. The legislation allows borrowers earning less than $100,000 a year to deduct the full amount of their mortgage insurance premiums paid in 2007. Borrowers making between $100,000 and $110,000 will be eligible to write off a portion of the premium in 2007.

S.A. Ibrahim, CEO of Radian Group Inc. (NYSE: RDN), commented, “We are extremely pleased that this important bill has been signed into law. This legislation broadens the choices available to borrowers by making the monthly payment for an insured mortgage even more affordable and convenient.

“We are looking forward to the opportunity this new legislation brings to educate consumers on their mortgage insurance options, and to broadening our market reach to those homebuyers seeking additional tax advantages.”

The MI premium is fully deductible at $100,000 and phases out for annual earnings between $100,000 and $110,000.

Found here.

Many uninsured drivers may soon have registrations canceled.

Time is running out for uninsured motorists.

The state Department of Motor Vehicles will begin notifying some drivers without auto insurance today that their registration has been canceled.

The cancellations follow warning letters sent last month to more than 13,000 registered owners in the central San Joaquin Valley and 314,000 in the state, according to the DMV.

“What we are trying to do is to encourage people to keep current insurance,” said Mike Miller, a spokesman for the DMV. “Pay now or pay a lot more later.”

The letters are being sent under a state law that requires insurers to notify the DMV when registered owners don’t keep their insurance policies current.

The law was written by former state Sen. Jackie Speier and signed by Gov. Schwarzenegger in 2004. It took two years to get the system coordinated between the DMV and insurers, said Gary Gartner of the state Department of Insurance.

The law ends a loophole in California’s mandatory auto insurance law.

Previously, drivers could buy insurance, register their vehicles and then cancel the policy, Miller said.

The notices going out today are only the first flurry of letters the DMV will likely send: A recent estimate by the Department of Insurance reported that nearly 3.5 million vehicles were without insurance in the state, more than 150,000 of those in the Central Valley.

Speier intended the law to result in lower vehicle insurance premiums for drivers with insurance.

About 20% of the average insurance bill goes to uninsured motorist coverage, according to Karen Zarsadiaz of the Insurance Information Network of California, an industry group.

Since 2001, 1.4 million drivers in California have been convicted of driving without insurance and 78,000 drivers have been convicted of failing to have liability insurance when involved in a collision, the DMV says.

Letters of warning of the new law went out to motorists on Nov. 15, said Miller, of the DMV. People with a new or transferred vehicle get a notice if they have not purchased insurance in 30 days.

If a policy is canceled, the notice is sent 45 days after the cancellation.

Drivers can expect a fix-it ticket if they are stopped by a police officer and the vehicle registration has been expired for less than six months. If it has been out of date for longer than that, the car can be impounded, said Fresno police traffic Sgt. Eric Eide.

“It’s so unfair to everybody else who has to carry uninsured motorist insurance,” he said.

The penalties can become more severe. Fines can be $1,000, and driver’s licenses can also be suspended for a year, Miller said.

The change could mean trouble for some low-income drivers.

But there is good news for those who live in Fresno County — they may be eligible for a low-cost state supported insurance plan.

Those who live in other Central Valley counties won’t have that option yet, but the Department of Insurance eventually hopes to make the program available statewide.

“Sometimes for people it’s an economic reality between buying insurance and putting food on the table,” said Zarsadiaz of the Insurance Information Network.

She noted, however, that drivers who qualify can get a “bare bones” policy, such as the kind endorsed by the DMV, that can be purchased for less than $300 in Fresno County.

The driver must have a good driving record and meet low-income requirements to be eligible.

The policy would give a driver $20,000 in liability coverage, $10,000 per individual and $3,000 for property damage.

While that doesn’t provide a lot of protection, it’s “only a little bit more to actually get real coverage,” Zarsadiaz said.

“You just have to talk to an agent.”

Found here.

The kids are all gone, the retirement party has been endured, the house that once sounded like an echo chamber filled with young voices has taken on a tomblike air and, lets face it, the pension plan doesn’t quite equal the salary it has to replace.
Time to downsize, isn’t it?

Well, as a realtor I’d love to put your house on the market and help you find a new one.

But as a person not necessarily wedded to the bottom line I have a question: have you ever considered a reverse mortgage?
What is a reverse mortgage? Simply put, if you’ve spent years buying your home and if you and any other co-owner of your house (your spouse, for example) have reached the age of 62, then you might want to consider the idea of having a lending institution buy it from you bit by bit while you continue to live in it as long as you and/or your spouse are alive.

Why stay in your house? You know the neighbors, and the neighborhood, and the nearby shops, and the house itself which may be empty of children but is filled with memories. You might want to do what some friends of mine do: they dust the upstairs once every couple of weeks and keep it available to board children and grandchildren who come in from out of town. For the rest of the time they live happily in the bottom half of the house, keeping the upstairs minimally warm in the winter and cool in the summer.

Best of all, they’ve never had to MOVE.

How does it work? Your lending institution has a government formula (eight pages of them, so an informant tells me) outlining what you can get with your reverse mortgage. You are guaranteed a monthly payment until your 150th birthday.

Let’s say that over the years you have purchased your house free and clear. Depending on what the house is worth, you can either get a lump sum or a monthly stipend that slowly borrows against the worth of the house. Each month the institution has a higher and higher lien on your house that is only settled when the house is sold (just as the lending institution that holds your current mortgage must have that mortgage paid off if you sell the house).

Thus, before your heirs can realize any funds from the sale of your house after you die or leave it all debts must be satisfied.

But when it comes to encumbering your estate its important to know that the debt is against the house alone, not any other asset you may own. Thus the Rembrandt and the Monet you have hanging on the wall go straight to your heirs.

What are the advantages of a reverse mortgage?

The principal or interest payments are never due until you move, sell the home or pass away.

You never give up your property title.

You can never owe more than the value of the home (if you prove to be a medical miracle and your lifespan threatens to eclipse that of Methuselah the money is guaranteed).

If you die the benefits continue until your spouse’s death.

You can get a reverse mortgage even if you don’t own your house free and clear. The existing mortgage must, of course, be paid off before you can get any monthly benefit but just stopping the mortgage payment may be of inestimable value to your piece of mind.

Since you are shopping a thing (your house) you already own with a value that can be ascertained after all debts against it are paid off your credit rating is not part of the equation, any more than if you were trying to sell a piece of jewelry you own. Since you are borrowing against something you already own the money you get is tax-free.

The following are the basic rules of eligibility to get a reverse loan:

ALL co-owners of a house (usually husband and wife) must be at least 62.

The home must either be debt-free or have a mortgage that can be paid off by the reverse mortgage.

The property must be single-family or a one-to-four unit owner-occupied.

Town homes, detached homes, condominium units and planned unit developments are eligible.

There are all sorts of other things to consider such as taxes and estate planning. This column is not intended to be all-inclusive but just a brief introduction to something you may not have considered.

Found here.

Marvin Margolis, an 80-year-old Manhattan financial consultant, is looking for investors willing to bet on when he will die.

Two years ago, Mr. Margolis bought a large life insurance policy. Now, he’s considering selling it to a group of investors, a deal that should give him as much as $2 million to enjoy in his final years. In return, the investors will get the policy’s $7 million payout when he dies — which they hope will be soon, so they can stop paying his premiums.

“This is a wonderful opportunity to use my body as an asset,” Mr. Margolis said. “I deserve to be able to benefit in some way from my age.”

Trading in life insurance policies held by wealthy seniors has quietly become a big business. Hedge funds, financial institutions like Credit Suisse and Deutsche Bank, and investors like Warren E. Buffett are spending billions to buy life insurance policies from the elderly. Other investors are paying seniors to apply for life insurance, lending them money to buy the policies, and then reselling them to speculators.

This nascent market illustrates one way that investors are hoping to make money from a large and wealthy generation of Americans as they reach retirement age. These aging baby boomers and those even older offer both opportunities and risks for many companies, investors and swindlers seeking to capitalize on their final years.

Insurance executives, for instance, say transactions like Mr. Margolis’s may cripple their industry and make it harder for the average senior to buy life insurance in the first place. Insurers are worried because they count on many customers canceling their policies before they die, usually because their children grow up and no longer need the financial protection, their pensions kick in or premiums become too expensive. If far more policies result in payouts, the insurance business becomes much less profitable.

Indeed, industry analysts say they expect the cost of life insurance to rise as companies prepare to pay out more claims.

“If payouts increase, the cost of insuring people is effectively going up, and that will definitely increase the price of policies,” said J. David Cummins, a professor at the Wharton School of the University of Pennsylvania.

While that may be the case, many people have come to rely on selling their policies to provide urgently needed money for medical care and living expenses when their bank accounts run dry. However, insurance executives say that the market that has emerged could be ruinous.

“Life insurance is a way for individuals to protect their families,” said C. Robert Henrikson, the chief executive of MetLife. “If someone profits from a stranger’s death, it stands the whole purpose of life insurance on its head. Anything that disrupts the economic processes underlying this industry will drive the cost of life insurance through the ceiling.”

Policies like Mr. Margolis’s cause particular concern. It was originally paid for with a loan from speculators who will get their money back, plus a profit, if it is sold to another group of investors, according to public documents. Even if Mr. Margolis does not sell, the loan will be repaid from the death benefit when he dies.

Such policies are known as speculator-initiated life insurance, or “spin-life” policies. Investors estimate that spin-life policies worth as much as $13 billion will change hands next year.

The deals are so lucrative that older people are being wooed in every fathomable way. In Florida, investors have sponsored free cruises for seniors willing to undergo physical exams and apply for life insurance while onboard.

For insurers, such cruises are a financial Titanic. Over the next decade, the insurance industry could be forced to pay out unexpectedly more than $100 billion in death benefits as spin-life policies come to maturity, investors estimate.

In Minnesota, according to lawsuits brought by insurers, an 82-year-old named John R. Paulson bought life policies worth $120 million from seven companies and resold many of them before insurance companies realized what was going on and sued, saying that Mr. Paulson had lied on his applications.

Life insurance companies, in particular, rely on policies lapsing before the policyholder dies. Last year, for instance, insurance companies reduced their financial exposure by $1.1 trillion when 19.8 million policyholders stopped paying premiums, according to the Insurance Information Institute. In comparison, the industry paid death benefits on only 2.2 million policies.

If those lapsed policies had been sold to investors rather than canceled, insurance companies could have eventually paid out as much as a trillion dollars, say analysts.

In an attempt to mitigate such risk, some insurance companies are trying to make policies for seniors harder to buy. The biggest insurer in the United States, American International Group, earlier this year increased prices on some universal life policies for buyers more than 70 years old in an effort to thwart spin-life deals.

“We don’t want this business, and we’re taking steps to discourage those purchasers from coming through our doors,” an A.I.G. spokesman said.

But such moves may be too late. The market for purchasing life insurance policies from seniors is an outgrowth of the so-called viatical industry that began in the 1980s, when investors bought up life insurance policies of AIDS patients. In the last two years, as interest rates and stock market returns have declined, the number of buyers seeking seniors’ policies has soared.

That growth was fueled this year when the Financial Accounting Standards Board issued rules permitting investors to record purchases of policies immediately as a profit, rather than forcing them to wait until the policyholder died.

Critics contend the industry punishes the young and healthy, by driving up prices, but many people who have sold their policies say it offered their only way to avoid calamity.

“If I hadn’t been able to sell this policy we would have lost our house, all of our savings, everything,” said Andrew Schneider of Kaysville, Utah. Seven years ago his wife, Karen, learned she had breast cancer. Her expenses exceeded the Schneiders’ medical insurance by half a million dollars. Mrs. Schneider sold her life insurance policy for about $250,000 and used the money to buy medicine and pay bills, he said. The investors who bought her policy received a $500,000 death benefit when she died last year.

“Selling that policy extended her life for years,” said Mr. Schneider. “If this market hadn’t existed, we would have become financially destitute.”

Finding enough life insurance policies to satisfy investor hunger has proved difficult. So, in addition to the free cruises in Florida, investors including one large hedge fund have hired a California telemarketing company to call elderly citizens and ask if they would apply for life insurance in exchange for a paycheck.

The insurance industry has begun to fight back. Legislatures in New Jersey, New York and nine other states have proposed laws intended to outlaw spin-life investments or make it more difficult for investors to get payouts, according to the Life Insurance Settlement Association.

Insurance companies have also sued to cancel policies, contending that payouts benefiting outside investors violate the legal requirement that beneficiaries have an “insurable interest” in the policyholder’s life.

But many advocates for the elderly and industry insiders worry that seniors will lose their legitimate ability to sell life insurance policies they have held for years.

“We’ve put billions of dollars in the hands of seniors who were getting thrown out of their homes or needed medication, and their only asset was a life insurance policy,” said Scott Page, chief executive of the Lifeline Program, a company that helps investors buy life insurance policies from the elderly and infirm. “If you make it harder to sell these policies, you’re taking money out of the hands of people who have nothing else.”

Another risk is that seniors hoping to sell their life insurance policies will be stuck in bad deals. In October, the New York attorney general, Eliot Spitzer, filed a lawsuit accusing one life insurance speculator, Coventry Financial, of bid-rigging and other fraud in acquiring more than $3.6 billion in life insurance policies. Coventry said it would fight the suit.

A lawyer who has helped the elderly set up spin-life arrangements worth more than $300 million said that often the terms of the deals prevented his clients from profiting.

“Investors say, ‘I’ll loan you money to buy a new policy, and in a few years I’ll buy it from you,’ ” said Larry Brody, a partner at the law firm Bryan Cave. But a few years later, when the seniors sell the policy, they owe so much in interest and fees on the loan, he said, “it eats up all the profit. And what’s more, they can’t buy another insurance policy, because insurers are unwilling to give them more coverage.”

But those risks are worth the trouble, according to some buyers and sellers. In 2004, Irene Randall, a life-settlement broker in Albuquerque, N.M., set up an $8 million spin-life policy for her 82-year-old uncle with investors who agreed to lend him money for the premiums. In return, she said, the company hopes to buy the policy next year, paying her uncle $1.5 million.

Ms. Randall called it a great deal and said she was setting up a similar arrangement for her 82-year-old mother. She expects both her mother and uncle will live long enough to enjoy the windfall. “The one thing we know is that everyone is going to die at some point,” said Ms. Randall. “If someone is willing to pay you because you’re old, why not try and live it up before then?”

Found here.

TALLAHASSEE, Fla. – “Snowbirds” and other part-time Florida residents who insure their cars back home cannot make claims under Florida laws that may be more favorable to them than those in their own states, the state Supreme Court said Thursday.

The ruling applies to crashes or other damages that occur in Florida. It was unanimous, but Chief Justice R. Fred Lewis agreed only with its result. He wrote that the majority’s sole reliance on where a policy is issued may result in unintended consequences.

The opinion quashed a 2nd District Court of Appeal decision to permit a lawsuit under Florida law against Bloomington, Ill.-based State Farm for a claim on an Indiana policy.

The Supreme Court said only Florida citizens, not visitors or part-time residents, can claim the benefits of Florida law under out-of-state insurance policies and only then if necessary to “promote a paramount public policy.”

“Although Florida welcomes its many visitors, whether for short or extended stays, we cannot rewrite their out-of-state contracts,” Justice Raoul Cantero wrote for the high court.

The decision will prevent Lake Wales residents Thomas and Margaret Roach, who were injured in 2001 while riding in a neighboring couple’s Indiana-insured car, from suing State Farm for underinsured motorist compensation under Florida law.

Indiana law would prohibit them from recovering because it permits an offset of underinsured motorist coverage against claims paid under other types of coverage. Florida law does not permit offsets.

The Roaches previously accepted personal injury liability settlements from a second motorist involved in the crash and State Farm, which covered the car owned by the Indiana couple, Ivan and Betty Hodges. Mrs. Hodges was killed in the crash.

The Hodges were snowbirds who spend winters at their second home in Lake Wales, but that didn’t make them Florida citizens, the high court found.

In a separate concurring opinion, Lewis wrote that he would consider the location of the risk being insured and the intentions of the parties to an insurance contract as well as where it is issued to determine if Florida law should apply.

Lewis was worried that using the majority’s more rigid doctrine will result in other states’ laws controlling automobile insurance contracts designed and intended to cover risks in Florida and to be governed by Florida’s laws.

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Dec. 14 (Bloomberg) — U.S. commercial real estate investment is likely to set a record this year, driven by rising rents and occupancies in office and industrial buildings, the National Association of Realtors said.

More than $236 billion in commercial real estate transactions were recorded in the first 10 months of 2006, up from $231.9 billion a year earlier, the Washington-based association said in its Commercial Real Estate Outlook report, released today. Blackstone Group LP’s agreement in November to acquire Equity Office Properties Trust, the biggest office landlord in the U.S., for $20 billion, isn’t included in the data.

“It bodes well for the commercial real estate industry that you have these behemoths acquiring properties, particularly office,” Scott Macintosh, senior economist with the National Association of Realtors, said in a telephone interview.

Rising U.S. employment and trade are providing a boost to commercial landlords, the real estate association said. Fewer U.S. workers filed first-time applications for state unemployment benefits for a second consecutive week, the Labor Department said today, a sign that demand for labor is holding up. Rising employment fuels demand for office space, while increased trade boosts demand for warehouses and distribution centers.

Office-building transactions have accounted for 48 percent of investment in all commercial real estate sectors this year, with more than $105 billion in properties changing hands in the first 10 months, the association said. That’s up 36 percent from a year earlier. The data doesn’t include the hotel market or properties valued at less than $5 million.

Real Estate Buyouts

Office transactions this year have been fueled by acquisitions of entire portfolios, leveraged buyouts of real estate investment trusts, and mergers within the industry, the association said.

The purchase of Chicago-based Equity Office Properties by Blackstone, the world’s biggest buyout fund, was worth $36 billion including the assumption of debt, making it the biggest buyout in history.

A week ago, Reckson Associates Realty Corp. shareholders approved the sale of the company for $3.8 billion to SL Green Realty Corp.

U.S. office vacancy rates likely will drop to an average of 12.1 percent by the fourth quarter of next year from 12.9 percent today, the National Association of Realtors said. The current vacancy rate is the lowest since 2001. Rents in the office market likely will increase 5.2 percent in 2007 after rising 4.3 percent this year, the trade group said.

`Ramping Up’

“The office-using sectors, the financial sectors, seem to be ramping up,” Macintosh said. “Maybe manufacturing and other job sectors are not as robust, but financial sectors certainly are, and they’re office users.”

Vacancy rates in the industrial market are also at their lowest since 2001 and are forecast to average 9 percent by the fourth quarter of next year, down from 9.5 percent today, the association said. Warehouse, distribution-center and other industrial transactions totaled $32 billion in the first 10 months of 2006, up from $28 billion a year earlier and likely to set a record this year.

Transactions in the apartment market, meanwhile, dropped to $68 billion this year through October, from $70.1 billion a year earlier, the real estate group said. The slowdown in home sales nationwide has reduced the number of apartment buildings being converted to condominiums, cutting into competition for properties from converters. Converters accounted for only 12 percent of transaction volume so far this year, down from 35 percent a year earlier.

Retail Decline

The retail real estate market also had a drop in transactions, with a total investment volume of $33.8 billion in the first 10 months of 2006, down from $41.1 billion a year earlier. Average retail rents likely will increase 1.2 percent in 2007 after dropping 0.4 percent this year, the association said.

Retail landlords have been hurt by vacancies in regional malls resulting from Federated Department Stores Inc. closing some locations after buying May Department Stores Co. for $11 billion last year.

“That’s having a big impact on regional shopping centers, and has the overall impact of keeping the retail vacancy rate high,” Macintosh said.

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