Securitization

  • The comment is regarding our discussion of structured transactions wherein securitization of policyholder loans was also mentioned.
  • We at Prudential-Bache are still working on a structured transaction involving policyholder loans.

-- Dr. V. Michael Shante

1987 - SOA - New Investments and New Investment Strategies, Society of Actuaries - 48p

  • The article discusses the securitization of pools of life insurance policies, reminiscent of the securitization of sub-prime mortgages.
  • Then state and federal attempts at regulation and a variety of lawsuits are summarized.

2011 - LR -  Betting On The Lives Of Strangers: Life Settlements, Stoli, And Securitization, by Susan Lorde Martin  - 47p

  • 2009 0924 - GOV (House) - Recent Innovations in Securitization
    • [PDF-123p, VIDEO-archive.org]
    • Testimony - Susan Voss (IA) - NAIC
    • House - Committee on Financial Services - Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
  • 1988 - SOA - Securitization of Policy Loans, Society of Actuaries - 30p
  • 1989 - SOA - Securitization of Assets, Society of Actuaries - 10p
  • 1997 - SOA - Securitization of Insurance Company Assets and Liabilities, Society of Actuaries - 25p
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  • 2003 10 - IAIS - Issues Paper - Issues Paper on Life Insurance Securitisation - 12p
  • 2004 0103 - AP - Securitization of Life Insurance Assets and Liabilities, Submitted to: TIAA-CREF Institute, By J. David Cummins, The Wharton School - 66p
  • 2005 - AP - Securitization of Life Insurance Assets and Liabilities, Alex Cowley and J. David Cummins, The Journal of Risk and Insurance - Vol. 72, No. 2 (Jun., 2005), pp. 193-226 - 34p - jstor.org/stable/3519948
  • 2006 - PWC - Innovative Financing: Life Insurance Securitisation, PricewaterhouseCoopers - 16p
  • 2009 05 - LR - Systemic Risk Through Securitization: The Result of Deregulation and Regulatory Failure, Patricia A. McCoy, Andrey D. Pavlov & Susan M. Wachter - 49p
  • 2010 - AP - Securitization of life insurance policies
    • Insurance Markets and Companies: Analyses and Actuarial Computations, Volume 1, Issue 2, 2010, by Snorre Lindset (Norway), Andreas L. Ulvaer (Norway), Bertel Anestad (Norway)
    • Abstract:  In this paper we develop, price, and analyze a securitization structure of life insurance policies.
    • By transferring term insurance policies to a special purpose vehicle, all risk is transferred from insurers to the capital market.
  • 2011 - LR - Betting On The Lives Of Strangers: Life Settlements, Stoli, And Securitization
    - 47p
  • 2012 - AP - The Impact of Life Insurance Securitization on the Issuer's Default Risk, by Jonas Lorson, Working Papers on Risk Management and Insurance, NO. 117 - 24p
  • 2011 0422 - WSJ - AIG Tries to Sell Death-Bet Securities, By Leslie Scism - [link]
    • The new wrinkle of securitization arose in the market's boom years before the financial crisis.
      • Just as Wall Street banks bundled mortgages to make mortgage bonds, financiers looked into bundling hundreds of life-insurance policies into bonds that they could then sell, with the bonds' income coming from the death benefits.
    • The industry's trade group, American Council of Life Insurers, has criticized the concept, saying the existence of a Wall Street pipeline that needs to be filled with policies could encourage fraud by commission-paid agents and others trying to get older people to purchase and sell policies.
    • AIG's life-settlement business is in its Chartis property-casualty division. 
    • Chartis also has been involved with life settlements in another way. It has sold "lender protection" insurance to a finance firm that lends to people to help them pay premiums on multimillion-dollar life policies, according to a prospectus for a stock offering by Imperial Holdings Inc. earlier this year.