Life Settlements

Life Settlements: A Long Road to Redemption

Like a heavyweight boxer struggling to recover from a solid blow to the solar plexus, a chastened life settlement insurance industry is struggling to regain its equilibrium and re-establish its niche in the financial services marketplace.

Life Insurance - Combating Fraud and Minimizing Losses

It's probably common knowledge that one mechanism of fraud schemes involving life insurance would seek to have a payout of the face value through a real or faked death. Less well recognized are schemes that try to trigger agents' commissions under fraudulent scenarios. This article explores recent trends and some of the methods used by life insurers to combat fraud and minimize losses.

7 Positive Trends for Life Settlements

The life settlement industry has seen its share of turmoil in the past few years. But growing pains are part of any new evolving industry. Here are seven reasons why the future of the life settlement industry looks bright.

Buerger: Life Settlement Industry Must Evolve

To achieve its growth potential in coming years, the life settlement industry must evolve its business model to better serve a fast-growing population of recipients of long-term care funded through Medicaid, according to the keynote speaker at the conference held for life settlement institutional investors on March 11.

Mortality estimates and the impact to life settlement brokers

Recent changes to mortality tables by life expectancy (LE) providers pose new challenges for the secondary life insurance market. This environmental shift has resulted in investors revising risk assessments and return rates and some life settlement providers rescinding offers to brokers based on old LE assumptions. How are these changes, along with others, impacting brokers?

Poor Underwriting Practices Spark Life Settlement Losses

Life expectancy providers are a key component of the life settlement process. They offer a life expectancy for someone who is looking to sell his or her life insurance on the secondary market to life settlement investors.

Are You Worth More Dead Than Alive?

In a transaction known as a viatical settlement (for terminally ill patients) or a life settlement (for everyone else), the person selling his insurance gets an immediate cash payment. The buyer, in exchange, is named as the beneficiary and pays the premiums until the insured person dies.

Boomers Ready for Life Settlement Option

As Boomers feel increasingly uncertain about being able to meet their retirement goals by the time they turn 65, they are turning to unconventional financial vehicles to meet their needs, including life settlements.

What Did We, As Underwriters, Learn from the STOLI Experience?

While the STOLI market has largely subsided in recent years, it is still a good idea to reflect upon the changes that came about in underwriting as a result.

Life Settlements Market Remains Unsettled

New report says economic woes, changing regulatory and legal environment will define market.

STOLI in 2011 (Slides from 2011 Spring Meeting of the Southeastern Actuaries Conference)

Slides from the presentation by David R. Beasley, FSA, MAAA, CERA, at the 2011 Spring Meeting of the Southeastern Actuaries Conference. June 16, 2011

Navigating the Money Game: Thoughts on the Ever-changing Life Settlement Industry

Many tales have been told about this misunderstood industry. The one I Iike best is, “the life settlement industry is dead.” If this were a text message, I would reply in all caps: LOL.

New York Department Sides with Life Settlement Company

New York insurance regulators have issued a ruling that could affect life settlements involving conversions of term life insurance policies.

The Korean War

JIm Avery is Prudential’s president of individual life insurance, and an outspoken critic of both the life settlements industry and stranger-owned life insurance (STOLI). He recently traveled to South Korea in an effort to convince the life insurance industry there to not allow the practice of life settlements.

Conning: Life Settlements May Affect Insurers, Reinsurers

Policyholders have settled enough life insurance policies to have a noticeable effect on some insurers and reinsurers, according to Conning Research & Consulting analysts.

You Bet Your Life

Advice for the wary consumer on life settlements.

Actuaries and Life Settlements

The life settlement market is poised for growth. Is the actuarial profession prepared to gear up?

Life Settlements: Buerger Eager to See Next Act

A top life settlement industry official this week said that despite current opposition from some underwriters, he believes the life settlement business will soon become an integral part of the life insurance industry.

STOLI On The Rocks (And Off The Docks)

The Wall Street Journal on Monday ran an interesting piece about state regulators cracking down on "middlemen" pushing Stranger-Originated Life Insurance (STOLI). The article, titled "Regulators Rein in Murky Life Policies," centered around Florida life insurance agent Steven M. Brasner, a STOLI specialist (who last year surrendered a 50-foot yacht named "STOLI on the Docks") arrested by Florida authorities in April on 22 counts of alleged grand theft, fraud and other offenses tied to $78 million of policies that earned him nearly $2 million in commissions.

Is The Life Settlement Market Dying?

After a 10-year bull run, many insurance professionals are now wondering if the life settlement market has flat-lined.

Testimony Rips Into Stranger-originated Annuities in Different Ways

Stranger-originated annuity transactions (STATs) have stirred up the ire of professionals in the life settlement and life insurance businesses as well as from the fixed and variable annuity businesses, broker-dealers and more.

IASB: Measure Life Settlements At Fair Value

The International Accounting Standards Board is proposing that entities should use different methods for measuring life insurance policy assets and life settlement contract assets.

Stranger-Originated Annuities: It’s About More Than Annuities

The battle over stranger-originated annuities is part of a larger battle over the insurance product resale market, representatives from an insurer group and a life settlement group agree.

Witnesses from the American Council of Life Insurers, Washington, and the Life Insurance Settlement Association, Orlando, Fla., appeared Thursday at a STOA hearing organized by the Life Insurance & Annuities Committee at the National Association of Insurance Commissioners.

Ask the expert: What to Know About Overseas Buyers

The question was: Some of my life settlement clients are concerned by the idea that their life policy may be purchased by an overseas interest. They say they would “feel better” having a U.S. buyer. How can I respond effectively to this concern?

LISA Blasts Stranger-Originated Annuities

The Life Insurance Settlement Association is asking regulators and life insurers to do more to stamp out stranger-originated annuity transactions. Also, see NAIFA Adopts Policy Opposing Stranger-Originated Annuities.

Settlements spur some carriers to terminate producers or consider policy rescission

Once a life policy has been settled, 50% of direct writing life insurers say their company procedure is to “terminate producers circumventing the system” and 33% say they would “consider rescinding the policy if it is sold,” according to a new report.

Index Shows Life Settlement Activity Up Sharply

The Amrita Life Settlement Index rose about 29% in April. The life settlement activity indicator climbed to 417, from 324 in March.

Son of STOLI

As the insurance industry and regulators are making headway dealing with stranger-originated life insurance transactions (STOLI), a new threat known as stranger-originated annuity transactions (STAT) is emerging.

Most Seniors Unaware Of Settlements

69% of the respondents said they had no concern with an investor owning a policy on their life, according to ISI. (Ed. note: One wonders how many would change their opinion were they to read this: Davie, Florida Insurance Agent Arrested After Scamming Elders Out of Millions of Dollars)

Insurers Launch New Attack on Life Settlements

Life settlement providers see more than a concern about STOLI in the ACLI's call to ban securitization for settlements. They see a line drawn in the sand portending a battle over the settlement industry's survival.

Ask The Expert: Life Expectancy Reports

Actuarial consultant John Bragg responds to the question: Some life settlement clients tend to be put off by the news that a “life expectancy” report will be done. What should I explain to them about these reports in relation to the settlement transaction?

Life Settlements: Technology and Service Providers

The life settlements industry will transact approximately US $13 billion annually from 2010 to 2013.

ACLI Securitization Stance Draws Fire

A position paper by the American Council of Life Insurers (ACLI) asking legislators to ban securitization of life settlements is eliciting some heated responses. The paper contends that securitization of life settlements presents dangers to the insured public and to the investors who buy the securities.

Obama Plan Could Boost Revenue From Life Insurers: UBS

A positive for the industry could come from the proposed increase in tax rates for upper-income Americans, “which could help demand for tax-advantaged policies,” according to a note to investors by Andrew Kligerman, an analyst for UBS, New York.

Kligerman says an administration budget proposal to limit tax avoidance on life settlement arrangements would hurt life settlement firms, but he believes that strikes a positive note for life insurers’ policy margins, which are partly supported by lapse rates.

ACLI Calls For Life Settlement Securitization Ban

The ACLI, Washington, has put out a policy statement asserting that packaging life insurance settlements into securities increases the risk of fraud, by encouraging securitizers to lure seniors into participating in illegal, stranger-originated life insurance transactions; by encouraging seniors to help file fraudulent STOLI applications; and by encouraging investors to buy life settlement-backed securities without understanding the risks involved.

UPDATE: Check out Settlement Execs Blast ACLI Comment.

Life Settlements Survey Report

The Life Settlements Survey Subcommittee of the Society' of Actuaries' Committee on Life Insurance Mortality & Underwriting Surveys has completed their report on the results of a survey on the current practices and reactions related to life settlements.

FinCen Eyes Suspicious Life Settlement Transactions

A federal program that collects information about possible cases of money laundering is receiving some reports on life settlement transactions.

Officials at the Financial Crimes Enforcement Network, a branch of the U.S. Treasury Department, have discussed those reports in a catalogue of about 1,300 “suspicious activity reports” that insurers filed with FinCen from May 2007 to May 2008.

Strong Anti-STOLI Legislation Advances In Three States

The battle to deter a financial abuse of senior citizens advanced recently as three state legislatures approved bills aimed at a fraudulent transaction called stranger-originated life insurance (STOLI).

The Vast Difference Between Life Settlements and STOLI

As life settlements (or viatical settlements), have grown enormously in popularity and use over the past few years, regulation of this secondary market has become a headline issue for many states, garnering a great deal of attention (and controversy) among national organizations such as the National Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL). Consumers, institutional investors, financial advisors, and the “primary market” insurers, as well as regulators and public policy makers are all very interested in the handling of life settlements.

SOA Reinsurance Section August '08 Newsletter

  • Life Reinsurance Data From The Munich American Survey
  • Longevity: Mortality Improvement
  • Solvency II—What It Means For Reinsurers
  • Limited Medical Benefit Plans—What Insurance Companies, Employers And Reinsurers Need To Know
  • Update In The Employer Stop Loss Medical Insurance Market
  • Reinsurance Execs Predict Capital Channels Will Blur
  • STOLI Poses Danger To Industry, Reinsurers Warned

...and more.

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