The National Conference of Insurance Legislators (NCOIL) decided on a conference call Tuesday that it would meet next month to discuss a proposed law to regulate life settlements. The meeting will be held either the week of Oct. 15 or Oct. 22. The location hasn’t been decided. NCOIL is made up of state legislators who sit on insurance committees. It’s developing a set of guidelines for state legislatures to use in developing laws to regulate life settlements.

NCOIL’s proposal differs markedly from the model act on life settlements offered by the National Association of Insurance Commissioners (NAIC). George Keiser, a North Dakota legislator who heads NCOIL’s life settlements subcommittee, wants to look at regulating trusts formed for the benefit of investors who take out life insurance on people they have no relationships with. Keiser says he wants to prevent stranger-originated life insurance, but not interfere with legitimate trusts.

The competing model act approved by the NAIC does not address trusts. NCOIL plans to adopt its model legislation at its Nov. 14-18 meeting in Las Vegas, so it will be ready to put its proposal before state legislatures next year.

Call 1-888-973-8377 to discuss life settlement oppotrunities.

A Life Settlement Broker can assist with the sale of your life insurance policy.Â

Your Sept. 9 column was about why people shouldn’t buy a life insurance policy with a nonrecourse loan in order to sell it later to a life settlement company. I’m considering doing this. I understand from your column that although insurance companies might not like this arrangement, it is legal. You devoted a paragraph to the fact that the middlemen “all get big commissions” and wrote that I’d be “giving up permanent access to my medical records.” I understand the paperwork would include a copy of my insurance physical and current medical history, and my doctors’ names, but no one can get further information from these practitioners without my authorization. Why do you seem so dead-set against it? P.L., via e-mail

The middlemen’s commissions matter because every dollar they get is a dollar less for you when you sell your policy. And you should know that people recommending this deal often tend to minimize its drawbacks because they stand to make a lot of money if you agree.

The fact that insurers dislike the deals is also relevant to you. Insurers are contesting claims from policies bought with nonrecourse loans. As a result, some life settlement firms will no longer buy them. That reduces the market value of the policy you intend to sell.

As for the privacy issue: Of course, no one can get further information from your doctors unless you sign an authorization. That’s why you have to sign one. You must give the buyer of your policy permanent access to your medical records.

Source: NewsdayÂ

FINRA is also currently running two other sweeps. One examining the sale of collateralized mortgage obligations targeted at seniors, while the second is focused on the sale of life settlements.

Along with the sweeps, the regulator also issued a Regulatory Notice to remind firms about their obligations when selling to seniors. The notice outlined best practices in suitability and acceptable use of professional designations that firms can use when dealing with senior customers.

The notice also highlights key issues relevant to most senior investors, including managing retirement assets, evolving investment objectives and, in some cases, increased vulnerability to abusive or fraudulent sales practices.

Life Policy Dynamics to release 2007 U.S. Life Settlement Market Analysis

WASHINGTON DC (September 14, 2007)  Life Policy Dynamics, LLC, (LPD) announced today, that its 2007 Preliminary U.S. Life Settlement Market Analysis will be released on Monday, September 17, 2007 at The Life Settlements Conference 2007 held in Orlando, FL by DealFlow Media. The market analysis examines details of life insurance policies transacted in the secondary life insurance market during 2007. Increases and decreases of winning bid amounts accepted this quarter and over the past six quarters are explored, as well as percentage above Cash Surrender Value accepted, and comparisons of life expectancy reports.

Valerie Coffey, LPD’s Director of Operations commented, “Life Policy Dynamics is committed to the growth of the market analysis as a reliable sample of market data. To that end, in our 2007 Preliminary analysis, we’ve increased the policy sample size by 30% over 2006, and expect it to continue to increase as we move into Q4.”

Until recently collecting accurate data on life settlement transactions has been difficult if not impossible. Thanks to LPD’s reputation in the industry for quality analysis they have been able to expand their data collection and create one of the most comprehensive industry reports available. For a non-fee subscription, visit LPD’s website at www.lifepolicydynamics.com.

About Life Policy Dynamics
Life Policy Dynamics serves as a “back-office” to institutional investors, providers, brokers, and agents by providing policy valuations, purchase contract verification, portfolio optimization, NAV reporting, premium administration, insured tracking, maturity management, and medical record retrieval.

LPD’s team has a unique combination of primary life insurance, policy valuation, and work process management experience, making the company an innovative servicing solution for the secondary life insurance market.

Life Policy Dynamics is a registered member company of the Life Insurance Settlement
Association (LISA) and Bundesverband Vermögensanlagen im Zweitmarkt Lebensversicherungen (BVZL).

Fitch: Life Settlements Not a Rating Issue Now for Insurers, But Could Be in Future

NEW YORK–(BUSINESS WIRE)–Sept. 13, 2007–The life settlement market exposes life
insurers and their reinsurers to a variety of risks in their core individual life segment. The primary risk is that policymakers will ultimately challenge the tax-advantaged status of life insurance if these products are viewed more as an investment security that can be bought and sold than a vehicle that provides financial protection to beneficiaries from the pre-mature death of the insured. The buying and selling of insurance policies in a secondary market could distort the very purpose of life insurance by breaking the insurable interest link between an insurer, policyholder and beneficiary. The life insurance industry greatly benefits from the tax-advantaged nature of its products. A change in the tax paradigm would have negative consequences for the industry, including the potential for adverse rating actions.

Reputational and litigation risk is also significant for market participants, given that a settlement transaction often combines complexity, substantial compensation for brokers and others arranging the transaction, product replacement, little regulation, potential fraud and the possibility of confusion on the part of elderly policyholders and their heirs. While Fitch recognizes that there are differences between what the industry refers to as ‘legitimate’ vs. ‘illegitimate’ life settlements, it believes that the emergence of the ‘illegitimate’ market is a predictable outgrowth of the ‘legitimate’ secondary market. It may also be difficult for insurers to distinguish between the two.

Direct financial risk to insurers comes primarily from actual lapse and mortality experience diverging from pricing assumptions. Life insurance products are priced with some assumption of policyholder lapse. Policies sold into the settlement market will not lapse because the investors are reliant on the death benefit to achieve their returns. Mortality on settlement policies may also differ from expectations. Many settlement originators target insureds with substandard health. Fitch believes these risks are currently manageable given the relatively small amount of life insurance in force that is estimated to be in life settlements. That view could change if the market grows rapidly.

The Special Report, ‘Fatal Attraction: Risks in the Secondary Market for Life Insurance’ is now available on Fitch’s website at www.fitchratings.com.

Fitch’s rating definitions and the terms of use of such ratings are available on the agency’s public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch’s code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the ‘Code of Conduct’ section of this site.

Source: Business Wire

Call 1-888-973-8377 to speak with a Life Settlement Professional. You can also get a Free Life Settlement Quote.Â