Today we learned that 21st Services, a major will implement changes in its mortality tables relative to its life expectancy determinations beginning September 16, 2008. A Life Expectancy also known as an LE is huge factor in pricing models for life settlement cases.

21st announced yesterday, at their Annual Investor Subcommittee conference, that they will be using new mortality tables which will be more reflective of real world life expectancies. Jack Ketter is showing that 21st Services is making a long term commitment to the industry.

As a result of the implementation of these new tables to their life expectancy underwriting, 21st Services will effectively lengthen their life expectancy determinations. We will have to see how quickly this will effect current offers, pending bids, and current policies in pricing.

We have also yet to confirm if LEs purchased in the last say 30-60 days will be updated to the new mortality tables without an additional charge.

We will keep everyone updated as these changes are completed.

It is strange that they used the name Abacus Life Settlements since there is a US based Life Settlement Funder named Abacus Settlements. Here is the article:

Experienced European Specialist Starts His Own New Life Settlement Firm

January 3, 2008 — Netherlands — The year has just begun and Life-Exchange has just added a new Member firm to its list. Titus van Heur, a seasoned CEO of many companies, has started his own firm as Abacus Life Settlements Management in the Netherlands. Previously he was responsible for managing another Dutch firm active in this field.

“I am proud to announce the start of my own firm in the US Life Settlements market. If you believe in this business as I do, it is important to show commitment to the market and your future clients. I will work together with a professional team of at least 2 other members, who also participate in my firm. They have built up experience in the Life Insurance business in the Netherlands and also have experience as CFOs with larger organizations. The network of people they know was also an important element of starting the business relationship with them.

One of our cornerstones of accepting clients is, that they have a high level of integrity and ethics. We will not accept every client that might want to do business with us. Only if they meet our ethical standards will we then build a business relationship together. We will focus on Institutional Investors in Europe. The US Life settlements will be managed either directly or via funds to be set up. We are really excited about this and expect a lot of business to be built up in a couple of month’s time.

We will also focus on Funds already active in Life Settlements with a need for temporary external asset management services. I am aware of funds in Germany for example that lack proper asset management experience in this asset class and have found themselves far too dependent on US providers. These are the kind of funds that will likely run into problems in the coming years if nothing is done about it.

Last but not least we are very pleased to also have become a Member of Life-Exchange, commented Mr. Van Heur.

For more information on Abacus Life Settlements Management, B.V. please visit their website at www.abacuslsm.com.

For more information about Life Exchange, visit Life Settlement Auctions.

Don’t forget that Life Settlement Magazine is coming soon.

Beware of strangers

Stranger/Investor Oriented Life Insurance not a good idea

FAIRMONT – The West Virginia Offices of the Insurance Commissioner warns against “Stranger/Investor Originated Life Insurance.”

Known as STOLI for short, these life settlement arrangements can come in different forms and names, said Dena Wildman, insurance complaint specialist supervisor for the state Offices of the Insurance Commissioner.

For example, if something happens that affects the finances or health of a consumer, he or she may no longer have the money to pay for a life insurance policy. A company may offer a specific payment to the person, continue paying the premiums, and will become the beneficiary of the death benefits, Wildman said.

In some cases, a stranger purchases a life insurance policy from another individual for a certain amount of money, she said. Another method is when a company contacts a consumer and offers to buy a policy from him or her for cash value. One of these arrangements could involve an individual entering into free or no-cost life insurance, or someone may buy a policy just to sell it to a third-party investor. In viatical settlements, different investors will invest in a life insurance policy on a person who has some sort of life illness.

“Anytime someone’s wanting to buy your policy from you, you should always question it,” Wildman said.

She said consumers should be careful when thinking about participating in a STOLI arrangement. Persons need to determine whether a tax consequence or other problems could result if they purchase one of these life settlement arrangements. It could also cause limits on future insurability or higher premium for additional coverage.

“The first thing to consider is someone is going to make money off your death, Wildman said. “Youu’re putting your life in someone’s hands who will profit from your death, which is a scary thing.”

“They may not give you what your policy is worth. (Consumers) are not going to benefit from what they paid over the years.”

STOLI arrangements often originate from investment firms that set up trusts specifically for this purpose and often target people who are 65 to 85 years old. West Virginia doesn’t license these types of companies, she said.

Wildman said the Offices of the Insurance Commissioner receives calls from people questioning life settlement agreements and refers these types of complaints to the auditor’s office.

People may consider a STOLI life settlement arrangement if they have an illness or are in a tough financial situation, but clients can obtain accelerated benefits from insurance firms without having to sell their policy to another company, she said.

In most cases, people establish a life insurance policy to take care of family in the event of their death and designate loved ones as beneficiaries. With an accelerated death benefit, a person gets a portion of the benefits now and family or friends also receive death benefits, Wildman said.

If a company offers to purchase a consumer’s life insurance policy, the person should always investigate the business and also look into the benefits and options associated with their existing policy.

Wildman advised consumers to “know their policy and check it out first before they agree to anything. They may have an accelerated death benefit available to them.”

Source: Jessica Legge
For life insurance premium financing (not STOLI), please call a premium finance professional at 1-888-973-8377

Coming soon, a site dedicated to Life Settlement Articles (LifeSettlementArticles.com)

After 16 months of debate, the National Conference of Insurance Legislators (NCOIL) has adopted an amended Life Settlements Model Act (Model Act). The Model Act was unanimously adopted during NCOIL’s Annual Meeting in November. First adopted in November 2000 and last updated in July 2004, the Model Act “is a targeted attempt to prohibit controversial stranger-originated life insurance (STOLI) transactions while encouraging legitimate life settlements.”1 Although the Model Act and the amended Viatical Settlements Model Act adopted earlier this year by the National Association of Insurance Commissioners (NAIC) have similar objectives, there are several substantive differences between the two model acts.

Among the notable differences, NCOIL has adopted a “first-of-its-kind definition of STOLI,”2 which is defined as “a practice or plan to initiate a life insurance policy for the benefit of a third-party investor who, at the time of policy origination, has no insurable interest in the insured.”3 The definition goes on to say that “STOLI practices include but are not limited to cases in which life insurance is purchased with resources or guarantees from or through a person, or entity, who, at the time of policy inception, could not lawfully initiate the policy himself or itself, and where, at the time of inception, there is an arrangement or agreement, whether verbal or written, to directly or indirectly transfer the ownership of the policy and/or the policy benefits to a third party.”4

Another distinguishing point between the two models is the length of time a policyholder is prohibited from settling a policy. The NCOIL Model Act has a two-year moratorium on settlement, which parallels the contestability period traditionally used in life insurance contracts, whereas the NAIC model has a five-year moratorium with certain exceptions for life-changing events.

Recognizing that some commentators have criticized the five-year ban in the NAIC model as addressing STOLI at the back-end, North Dakota State Representative George Keiser, NCOIL’s Life Settlements Subcommittee chairman, said, “STOLI occurs at the front-end of a life insurance sale. By defining STOLI, and strengthening reporting requirements and penalties for participating in STOLI, the NCOIL model gets at the heart of what needs to change.”5 Despite the amendments to the Model Act, “[NCOIL] attempted to protect all of the legitimate applications of financing, trusts, and the structural options that exist in packaging products sold, both from the life settlements perspective, and from the life insurance industry,” said Mr. Keiser.6

The Model Act also includes:(1) a recommendation that states amend their insurable interest laws, if necessary, to prevent the use of trusts to benefit investors without insurable interest; (2) an annual statement requirement for contracts settled within five years of policy issuance; and (3) a penalties section addressing fraudulent life settlement acts.

Source: Mondaq