August 22nd, 2010
By: Insurance Studies Institute
Insurers Utilize Life Expectancy Analyses When Issuing Life Insurance Policies, But Their LEs Differ From LEs Developed For Older People Selling Their Life Insurance Policies
In a generalized sense, insurers use life expectancies to price life policy products when they use mortality tables to provide a guideline of the life expectancies of each cohort market group. Mortality tables and ratings allow them to project future premium revenues vs. expected death benefit payments (including lapses), thereby knowing the potential profit potential for each line of insurance product. Based on the estimate of the insured’s life expectancy, insurers will assign the insured into one of several typical risk classifications. (These classifications may differ among insurance companies.)
The assigned risk category will determine the policy premium cost and/or whether or not a life insurance policy will be issued.
Commentary by Life Policy Group:
This is an excellent study worthy of reading and debate. However, investors should note that with more lives in your investment the greater the chance of good, consistent returns. Investors should also note the emphasis on medical underwriting.
http://www.insurancestudies.org/wp-content/uploads/2010/08/ISI_Evolution-of-Life-Expectancies-Aug-4-2010.pdf
Tags: life expectancies, life insurance secondary market, selling life insurance policies
Posted in Life Settlements News | No Comments »
August 22nd, 2010
Commentary: Betting on someone’s life could put your portfolio six feet under
By Robert Powell
BOSTON (MarketWatch) — Life settlements are not wildly popular investments. But they are wild investments. And to that end, federal regulators and lawmakers are fast at work trying to tame these slippery products, which promise a much higher return over more traditional conservative offerings.
A life settlement is a transaction in which an individual with a life insurance policy sells that policy to another person, who then assumes responsibility for paying the premiums.
Last week, the Government Accountability Office (GAO) warned consumers about participating in life-settlement transactions “due to a lack of clear, consistent state oversight.” The Securities and Exchange Commission recommended that life settlements be clearly defined as securities so that the investors in these transactions are protected under the federal securities laws. Read the SEC report at this website.
Commentary by Life Policy Group:
A well balanced and reasoned article.
http://www.marketwatch.com/story/life-settlements-are-doa-as-an-investment-2010-07-29
Tags: investing in life settlements, life settlements, SEC report
Posted in MarketWatch | No Comments »
August 22nd, 2010
Settlement firms balked at disclosing certain information
By Trevor Thomas
The California Department of Insurance (CDI) has revised its proposed emergency regulations regulating life settlement providers in the state to make them less onerous to life settlement industry.
Among other changes, the revised rules state that audited financial statements submitted by life settlement providers to the CDI shall be held in confidence. The earlier version of the rules would have opened that information to scrutiny by the public, a fact that members of the settlement industry objected to.
Read original article here
Tags: California Department of Insurance, CDI, life settlement providers
Posted in Life & Health Insurance News | No Comments »
August 22nd, 2010
By Katrina Baugh
Lifemark, one of the life settlements groups behind Keydata, could be facing liquidation after US hedge fund CarVal pulled a $60m rescue offer.
CarVal entered a six-week exclusivity period with Luxembourg-based Lifemark last month to try and thrash out a deal but this has failed, according to the Life Settlements Wire.
It had already stumped up £3.5m in short-term loans to Lifemark, which ran bonds backing Keydata plans owned by 23,000 customers who invested £350m.
Read original article here
Tags: CarVal, Keydata, life settlements, Lifemark
Posted in IFA Online | No Comments »
August 22nd, 2010
By Darla Mercado
A recommendation by an SEC task force that life settlements be treated and regulated as securities has raised concerns that another turf battle may be brewing between state insurance regulators and federal securities cops.
“We generally have concerns when the federal government pre-empts state authority, and this would be no exception to that, but we’ll reserve judgment until we see what action the federal government will take,” said Connecticut’s insurance commissioner, Thomas R. Sullivan, who is also chairman of the National Association of Insurance Commissioners’ Life Insurance and Annuities Committee.
Commentary by Life Policy Group:
The media and political coverage of the industry and its predilection with ‘bad’ news has created an impression of an industry filled with fraudulent practice and consequently confidence is low. Perhaps these changes will help to raise the industry profile and give investors and regulators more comfort.
Read original article here
Tags: life settlements, SEC task force
Posted in InvestmentNews | No Comments »
