Life Settlements
- 2010 0722 - SEC - Life Settlements Task Force - Staff report to the United States Securities and Exchange Commission - 93p
- 2023 0524 - Michael Sartain - 86. Adam Sosnick - The Michael Sartain Podcast - [VIDEO-YouTube-03:47:13]
- 54:04 - Adam Sosnick - **The dirty little secret of life insurance - Lapses
- Adam Sosnick - Welcome Funds, Inc. (Life Settlements)
- Let me review again for the Society the history of insurance regulation in the United States and the prominence in that history of one Elizur Wright.
- He went to England in the mid-1850's to study actuarial science and to examine the life insurance business.
- One of the things that made a very indelible impression on him both in England, and to a limited extent in the United States, was the public auction of life insurance policies, level premium whole life insurance policies without cash values.
- When the individual owners of those policies reached an advanced age and they no longer had the means to pay the premiums they could sell those policies in the open market for a market cash value.
- The problem was that the purchaser then had an adverse interest in the continuing longevity of that policyowner.
- It was those humiliating and actually dangerous transactions that brought Mr. Wright to develop the nonforfeiture aspect of the Massachusetts Insurance LAaw and historically bring about required cash values.
- Well, either we've forgotten that history or we believe that man has grown more mature and can now cope with that more effectively. It may help to think a little on those origins when designing a permanent insurance product without cash values
-- Dale Gustafson, Northwestern Mutual
1980 - SOA - Treatment of Existing Life Insurance Policyholders in Times of Rapidly Changing Economic Conditions, Society of Actuaries - 16p
- 2009 0924 - GOV (House) - Recent Innovations in Securitization, Paul E. Kanjorski (D-PA)
- [PDF-123p, VIDEO-archive.org]
- Written statement of Joseph M. Belth - p103-
- Testimony - Susan Voss (IA) - NAIC
- House - Committee on Financial Services - Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
- The US life settlement market is attractive to foreign investors for many reasons.
- First, unlike the term156 and endowment157 products primarily offered to the secondary markets in the United Kingdom and Germany, the US life settlement market is largely made up of permanent policies158 (whole life and universal life).159
- Second, in countries such as Canada, life settlements are largely banned within the provinces, so investors cross the border to participate.160
- Third, if premiums are paid, there is a guaranteed payout because death is a certainty—the only unknown is when.
- Therefore, the life settlement market attracts investors beyond US borders, but the lives being gambled on are largely those of US citizens.
- 156. Term life insurance provides coverage for a certain period of time, normally between one and thirty years. Life Insurance Basics, INS. INFO. INST., http://www.iii.org/article/life-insurance-basics [https://perma.cc/S7RH-7BH3] (last visited Feb. 22, 2016).
- 157. An endowment policy is an investment tool that also includes term life insurance. If the insured dies during the term, a death benefit is paid. Amy Fontinelle, The Pros Of An Endowment Life Insurance Policy, INVESTOPEDIA, http://www.investopedia.com/articles/pf/12/endowment_life_insurance.asp (last visited Feb. 22, 2016).
- 158. Permanent life insurance remains in force until the insured’s death if all premiums are paid. Life Insurance Basics, supra note 156.
- 159. The Secondary Markets for Life Insurance, supra note 143. Both whole life and universal life insurance is a type of permanent policy, but with universal life insurance the premiums are more flexible. Life Insurance Basics, supra note 156. As cash value accumulates in the policy, the policy owner has the option to reduce the premium payments as long as the interest earned on the cash value is sufficient. Id.
- 160. Perkins, supra note 155
2016 - AP - Life Insurance—Insurable Interest and The Freedom Of Contract: Why Medicaid Settlement Legislation Cracks the Foundation of the Life Insurance Industry, Heather Harris - 45p
- 2006 1217 - NYT - Late in Life, Finding a Bonanza in Life Insurance, By
- ndlegis.gov/files/resource/60-2007/library/sb2268.pdf - p99-
- Insurance executives, for instance, say transactions like Mr. Margolis’s may cripple their industry and make it harder for the average senior to buy life insurance in the first place. Insurers are worried because they count on many customers canceling their policies before they die, usually because their children grow up and no longer need the financial protection, their pensions kick in or premiums become too expensive. If far more policies result in payouts, the insurance business becomes much less profitable.
- Indeed, industry analysts say they expect the cost of life insurance to rise as companies prepare to pay out more claims.
- “If payouts increase, the cost of insuring people is effectively going up, and that will definitely increase the price of policies,” said J. David Cummins, a professor at the Wharton School of the University of Pennsylvania.
- 2009 0429 - GOV (Senate) - Betting on Death in the Settlement Market: What's at Stake for Seniors?
- 2010 - SOA - Report of the Society of Actuaries Life Settlements Survey Subcommittee, Society of Actuaries - 36p
- 2008 0411 - LC - American International Group, Inc., Plaintiff, V. Maurice R. Greenberg and Howard I. Smith - Transaction ID 19383511 - Case No. 769-VCS - First Amended Combined Complaint - Third Amended Consolidated Stockholders’ Derivative Complaint - 217p
- 461. Life settlements are somewhat controversial in that they involve purchasing life insurance policies from sick and/or elderly people with short life expectancies – betting they will die sooner rather than later. As described in a article in the March 19, 2001 edition of Forbes entitled “Death Wish,” “[t]his is a pretty ghoulish way to make a buck, but as a cold-blooded investment it sounds good.”
- 462. Maurice Greenberg was aware of the negative public relations that could result if AIG were to involve itself in the life settlements business as he enclosed the “Death Wish” article in a March 12, 2001 memo to David Fields with the note “[n]ot very attractive” and wrote in an April 16, 2001 memo to Fields that “[i]t seems to me that anybody doing anything in the field stands the risk of adverse PR . . . I am uneasy about this.”