Welcome Funds retains Life Markets Compliance, LLC (LMC) as its third party provider of legal, regulatory and compliance services. It is in conjunction with LMC that we are able to provide these life settlement regulation updates. For more specific information on the evolving life settlement market in NY, please access the links below:

• Invitation to provide comments to the rules & disclosures as drafted
• Model disclosures & consumer booklet

New York Life Settlements

Draft versions of the rules in New York to help clarify and to provide guidance regarding the State’s “Life Settlements Act” effective, in its entirety, on 5/18/10 (as a reminder, three provisions addressing privacy, disclosures and Stranger Originated Life Insurance have been effective since November of last year), have been recently posted on the Insurance Department website. Please note the following broker licensing highlights as currently drafted:

• If a broker (individual or entity) is not currently licensed in NY but is currently transacting business in NY (ie. facilitating a life settlement), then such broker may continue to conduct business in NY if an application is submitted within 30 days of publication by NY (there is no estimated date of such publication) and subsequently continue such business until approval (or denial) of such application.
• If a broker (individual or entity) is currently licensed in NY, then such broker and provider may continue to conduct business in NY until its current license expires. At that point, it is unclear whether a renewal or new application must be filed.
• The initial broker fee is $40 with a $40 biennial renewal.

One of the most inflammatory provisions of the rules is the initial $20,000 fee for providers with a $5,000 biennial renewal in addition to demonstrating $250,000 in financial responsibility either via a surety bond or by earmarking securities in such amount. The proposed provider fee is BY FAR the highest in the country - typical provider fees, with the exception of a few states (with a maximum of $3,000 to $4,000), normally do not surpass $1,000. Such requirements will establish barriers to entry for many providers, thus impacting negatively the competition in New York.

Life Markets Compliance, LLC

The firm was originally formed to assist existing and potential life settlement brokers navigate the complex industry with their licensing, regulatory and contractual needs. The firm has a number of fee-based services available, including helping applicants become licensed in various states like California. Life Markets Compliance can serve as the primary provider of compliance services or as a secondary complement and extension to established compliance, legal and/or licensing departments. For more information, please call 561-826-0371 or e-mail Jeff Deutsch at jdeutsch@lifemarketscompliance.com.

Welcome Funds, Inc ("WFI") and Life Markets Compliance, LLC ("LMC") are providing the above Compliance Alert as a reference only and are not issuing a representation as to its accuracy. The information should not be considered official State material. WFI and LMC both encourage all parties accessing the above information to independently confirm the extent and nature of their own requirements with each applicable Department of Insurance (or equivalent division) and/or State law. WFI and LMC are both not liable for any action or inaction taken due to reliance upon the information above.