I received a few emails about the Equitable Life settlement situation so I decided to post a recent article. I will also try to get other articles regarding the situation. This settlement/situation has nothing to do with the current life settlement industry. This was on the investment side.

Savers fear Equitable Life settlement

Steve Hawkes, Evening Standard

EQUITABLE LIFE policyholders fear the troubled mutual could still launch a last-ditch attempt to settle its £3.7bn claim against its former auditors and directors rather than go ahead with the huge case on Monday.

Savers at the society, who have seen the value of their savings plunge dramatically in recent years, believe Equitable would rather reach an agreement than leave itself open to fresh compensation claims from policyholders.

Equitable’s historic High Court action is set to last until Christmas.

Paul Weir, head of the Equitable Life Contributors Action Group, said the society had conceded the litigation could leave it open to new claims from members as more information about the reasons behind its near-collapse five years ago are made public. He said: ‘Equitable will bluster and fluster but if Ernst & Young offers them two and six-pence and a banana I fear they will take it rather than open themselves up to new claims.’

Equitable chairman Vanni Treves insists he is still open to an approach but the group is ready to do its talking in court.

Liz Kwantes, co-ordinator of the Equitable Life Members Support Group, said many savers simply wanted an apology. ‘A lot of people will be very pleased to see the ex-board squirm but all we want is for them to say sorry – no one has ever turned round and said that.’

Key man settlement are specific to corporate owned life insurance. Corporations sell life insurance policies because the insured key man has retired and the policy is no longer needed, the loan that required a life insurance policy is paid off, or the corporation has a split dollar policy.

Life Settlement – The term today covers the sale, assignment, transfer, devise or bequest of the death benefit or any portion of an insurance policy or certificate of insurance for compensation less that the expected death benefit of the insurance policy or certificate.

A Life Settlement also includes a loan or other lending transaction secured primarily by an individual or group life insurance policy or death benefit other than a loan by a life insurance company pursuant to the terms of the life insurance contract, or a loan secured by the cash value of a policy. It also includes an agreement to transfer ownership or change the beneficiary designation at a later date regardless of the date that compensation is paid to the seller.

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