We recommend your consult with your own accountant regarding how viatical and viatical settlements can be taxed. Here is a tidbit of information that might assist in tax decisions.

Insurance industry sources point out that others who have sought advance tax rulings on viatical settlements, (viatical refers to policies sold by the holder at a discount before the policy matures), have not received encouraging replies.

F. Lee Workman, a manager in CRA’s income tax rulings directorate in 2001, wrote in December of that year to a financial adviser seeking information on behalf of a client. The client had bought a policy from someone who was terminally ill:

“While a question of fact, the acquisition of a life insurance policy from a person who is terminally ill is generally done with a view to profit. Consequently, the purchase of such a life insurance policy is arguably a business as defined in subsection 248 of the (Income Tax) Act.

“In such circumstances, we are of the view that Section 9 of the act would apply to include the profit from the realization of life insurance proceeds on the death of the life insured under the life insurance policy as business income. Conversely, if a loss had resulted from such an endeavour … the act would permit a deduction in respect of such a loss.”

Source: TheStar

Berlin Atlantic Gets $500 Million Warehouse Facility

Berlin Atlantic Group said it recently obtained a $500 million warehouse facility from a national U.S. bank to buy life settlement policies.

The Berlin-headquartered company, an integrated provider-funder, has in the past funded its purchases with money raised in Germany, said Benedikt Ibing, director of business development and spokesman for the company in its Atlanta office.

James Sinnott, chairman and managing director of Berlin Atlantic, announced that the company had secured the commitment for the warehouse facility during a talk July 16 at an insurance-linked securities conference in Bermuda.

The $500 million facility will allow Berlin Atlantic to buy about 1,000 policies with a face value of about $2 million each, Ibing said. He declined to name the bank.

“For us, that’s a huge commitment of trust on part of the bank that they would do this at this time,” Ibing said, referring to the turmoil in the financial markets.

Because of concerns about the troubled financial markets in the U.S., Berlin Atlantic, which has 30 people in its structured life group business in Atlanta,  hasn’t been able to raise as much capital in Europe as it anticipated this year,  Ibing said.

Berlin Atlantic launched a premium finance business in the U.S. four years ago, and became active in life settlements two years ago, he added.

Call 1-888-973-8377 if you have a policy you are interested in selling.

This is a good sign that more and more regulation is coming into the Life Settlement Industry.

Mosaic Management Group, Inc, a Boca Raton FL based Portfolio management company, specializing in Life Settlements Portfolios announced Thursday that it has retained Greenspoon Marder, P.A. to represent them and ensure regulatory compliance.

(PRWEB) July 13, 2008 – Mosaic Management Group, Inc, a Boca Raton FL based Portfolio management company, specializing in Life Settlements Portfolios announced Thursday that it has retained Greenspoon Marder, P.A. to represent them and ensure regulatory compliance.

Greenspoon Marder, P.A. is nationally recognized as a leading provider of legal services to the life settlement industry, providing expert counsel to life settlement brokers, providers and viators in all elements of such transactions. Among the broad spectrum of services provided by Greenspoon Marder are:

State regulatory compliance
Licensing
Trade Practice Defense
Marketing and Advertising Compliance

Additionally, the firm provides a broad array of legal services for its life settlement clients for all of their corporate, litigation, employment, tax and estate planning matters.

Related Links:
Life Settlement License
Life Settlement Fraud