Agents Sued as Insurance Product Fails to Take Off

By LESLIE SCISM

A few years ago, Wall Street thought it had a hot new investment product, though one that was a little ghoulish.

Firms would buy life-insurance policies from the elderly, take over payment of the premiums, and pool them with hundreds of other policies. Firms would then sell them to investors as notes or funds—or even securitize them in the same way home mortgages have been bundled. When the older people die, their death benefits become the payoff for investors. read more

ILMA Commends GAO on Review of Life Settlements Industry & Pledges to Work with SEC

Transparency & Disclosure Will Help Achieve Consistency & Consumer Protections

WASHINGTON, D.C. – The Institutional Life Markets Association (ILMA) today commended the U.S. Government Accountability Office (GAO) for completing their review of the life insurance settlements industry at the request of the U.S. Senate Special Committee on Aging. In addition, ILMA pledges to work with the SEC on the recommendations announced in their Life Settlements Task Force report also released today. read more

U.S. Government Accountability Office (GAO) Releases Report

The GAO Report to the U.S. Senate Special Committee on Aging entitled “Life Insurance Settlements – Regulatory Inconsistencies May Pose a Number of Challenges” is the result of nearly a year of work at the request of Senator Herb Kohl (D, WI). ILMA and its principles are specifically cited in key sections of the GAO’s findings. Read the report.

Security and Exchange Commission Report on Life Settlements

The Securities and Exchange Commission (SEC) today released a staff report recommending that life settlements be clearly defined as securities so that the investors in these transactions are protected under the federal securities laws.

ILMA welcomes the SEC Task Force Report on Life Settlements and concurs with the need for clarification of the treatment of life settlements by the SEC. Additionally, ILMA welcomes the SEC recommendations concerning consumers' protection and suitability and we look forward to working with the Commission as they continue to examine this market. Read the report.

Security and Exchange Commission Investor Bulletin

The SEC issued an investor bulletin regarding investments in life settlements, consistent with one of the recommendations of the Task Force. Read the bulletin.

California Life Settlement Law

On July 9, 2010, the State of California issued implementation guidance for the new life settlement law signed by Governor Schwarzenegger on October 11, 2009. Under the terms of the new statute, life settlement brokers and providers will be required to obtain a license from the California Insurance Commissioner to transact life settlement business in California and will be subject to both licensing and consumer disclosure requirements. read more

Investor Notes
What Will the New Financial Reform Law Mean to the Longevity Markets?

Congress will shortly enact the Restoring American Financial Stability Act of 2010 (Act), also known as the Dodd-Frank Act. This is the most significant reform of the US financial system in the past 77 years. Whether the new law will achieve its main goal – restoring confidence in the US financial system – remains to be seen. read more

Investor Notes
Servicing of Life Settlements: A Critical Element for the Investor’s Consideration

Life settlements, like many investments, require ongoing hands‐on management far beyond the simple payment of premiums. They require a complete analysis of each policy, updated from time to time, effective management of the premium expense, thorough tracking of the person insured whilst respecting their privacy and protecting their identity, and timely filing of the death benefit claims. read more

ACLI Mixes "Apples and Oranges" to Mislead Consumers

Washington, DC - Responding to the American Council of Life Insurers (ACLI) policy statement that the securitizations of life insurance settlements should be prohibited by legislation and regulation, Jack Kelly of Institutional Life Markets Association (ILMA) said, "Once again ACLI has chosen to mix apples and oranges when condemning the life settlement market. The recent policy statement issued by ACLI concerning securitization of life settlements is misplaced and incorrect." read more

Investor Notes
Life Expectancy Underwriting

One of the most important variables in life settlement investing is the life expectancies resulting from underwriting. Life expectancy underwriting is the process of evaluating the medical history of an insured selling his or her life insurance policy and estimating the mortality distribution appropriate to that person, or more simply their remaining life. read more

The life settlement market has continued to prove itself as a means of unlocking the value of an unwanted or unneeded life insurance policy. In today’s investing environment, consumers may have more reason than ever to supplement their retirement income with the proceeds of a life settlement (and to rid themselves of the obligation to pay premiums on a policy they no longer want). read more

Testimony before the House of Representatives

September 24, 2009 - Statement Of The Institutional Life Markets Association (ILMA), presented by Jack Kelly, Director of Government Affairs Before Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, Committee on Financial Services, United States House of Representatives
read the testimony