Found this information on the 10-Q provided by MaxLife Fund Corporation. However, it gives a nice outline for life settlement investors or those looking to invest in life settlements.

Investment in life insurance policies are recorded in accordance the Financial Accounting Standards Board Staff Position No. FTB 85-4-1 Accounting for Life Settlement Contracts by Third-Party Investors (FSP FTB 85-4-1). FSP FTB 85-4-1 states that an investor may elect to account for its investments in life settlement contracts using either the investment method or the fair value method. The election shall be made on an instrument-by instrument basis and is irrevocable. Under the investment method, an investor shall recognize the initial investment at the purchase price plus all initial direct costs. Continuing costs (policy premiums and direct external costs, if any) to keep the policy in force shall be capitalized. Under the fair value method, an investor shall recognize the initial investment at the purchase price. In subsequent periods, the investor shall remeasure the investment at fair value in its entirety at each reporting period and shall recognize change in fair value earnings (or other performance indicators for entities that do not report earnings) in the period in which the changes occur. The Company has elected to value its investments in life settlement contracts using the investment method.

Investors may also be interested in: Internation Society of Life Settlement Professionals

Saw this in the news/blog section of Life Settlement Info, and thought this good news needed to be posted here as well.

Life Partners Holdings, Inc. to Begin Trading on NASDAQ Global Select Market

Read article: Life Partners to begin trading on NASDAQ Global

Life Partners, which began publicly trading on the OTC Market in 2000, is the world’s oldest and one of the most active companies in the United States engaged in the secondary market for life insurance policies, commonly called “life settlements”. Since its incorporation in 1991, Life Partners has completed over 84,000 transactions for its worldwide client base of over 20,000 high net worth individuals and institutions in connection with the purchase of over 6,000 policies totaling over $1.7 billion in face value.

Underwriting firm leader calls for more transparency from life expectancy underwriters

This is good news for the Life Settlement Industry, and a good call to action from Mr. Fasano. The recent changes in mortality and life expectancy reports put a strain on the industry. Not just for current policies that offered on but on previously purchased policies where investors may have to recalculate their investments.

The head of a Washington, D.C., underwriting firm is calling for more transparency among life expectancy underwriters.

Michael Fasano, the president of Fasano Associates, made the call proposing best practices standards for life expectancy underwriters during his company’s fifth annual life settlement conference. Fasano Associates serves the life, health, and life settlement industries.

Fasano called on the underwriters to retain qualified, independent actuarial firms to conduct regular analyses of actual to expected accuracy in a standardized format to allow more meaningful comparisons among professionals.

“We need more transparency in our industry if we expect to attract investment capital,” Fasano said in a statement. “Life expectancy underwriters have taken a lot of criticism recently – some legitimate and some not. But for our industry to move forward, we have to put our performance out there for review. Investors simply will not tolerate a secretive attitude any longer.”

Other speakers at the conference included Alan Buerger, CEO of Fort Washington, Pa.-based Coventry and Michael Barone, senior writer at U.S. News & World Report and a Fox News political analyst.

Amendments to Ohio’s Viatical Settlement Act will limit stranger-originated life insurance transactions and give the state’s insurance department additional oversight authority. New legislation requires brokers and providers to give more information to insurers and to report STOLI transactions to the state’s insurance department.

State Insurance Director Mary Jo Hudson said state legislators “recognize a shared responsibility of the life-settlement industry, life insurance companies and the department to protect consumers against STOLI transactions.”

Previous post regarding Ohio Life Settlements here at Life Settlement News:
Ohio Life Settlement Bill

Source: News-Messenger (Fremont, Ohio), The (07/01)