When evaluating a life settlement, the first question is always how much will a policy sell for? The better question is, how much more will a life settlement net than surrendering it to the life insurance carrier. Financial decisions are never made in a vaccum and the relative value of an insurance asset on the scondary market is best compared with the perceived value of a surrender. The GAO has finally given some fantastic context to this discussion with a recent report.
HUDSON, Ohio--(BUSINESS WIRE)-- The U.S. Government Accountability Office recently issued a long anticipated report on the state of the emerging Life Settlement market. One of the key findings, based on analysis of over 1,000 life settlement transactions, was that seniors selling their policies in a life settlement transaction received almost 8 times as much money as they would have had they surrendered the policy to the insurance company. “This confirms what we have been saying all along, life settlements are good for consumers and result in maximizing policy value for seniors who no longer want or need their life insurance policy,” said Brian Smith, President of the Life Settlement Institute. For example, proceeds of a life settlement may help a senior pay for long term care.
Using just the 1020 policies relied upon in the study means that life settlements delivered $232 million more value to seniors than they would have received from the issuing insurance company. The study shows that seniors would have received $37.4 million if they surrendered their policy but instead received over $269 million from the life settlement transactions.
The study also found that although the vast majority of states have adopted pervasive regulation of the life settlement market, some have yet to do so and differences among state laws can be significant. Smith added: “This finding also comes as no surprise to us. We have been working with state legislators and state insurance regulators to adopt consistent model legislation across the country and eliminate such discrepancies. Last year we helped get legislation enacted in several states including New York and California. However, there are 50 states and it takes time to get these initiatives passed. The National Conference of Insurance Legislators (NCOIL) Model Life Settlement Act is a very good bill and we will continue to support its adoption around the country.”
Life Settlements
Showing posts with label life insurance carriers life insurance market. Show all posts
Showing posts with label life insurance carriers life insurance market. Show all posts
Wednesday, July 28, 2010
NCOIL Drafts New Life Settlement Disclosure Model
The Life Insurance and Financial Planning Committee the National Conference of Insurance Legislators (NCOIL), Troy, N.Y., is drafting model state legislation that would require life insurers to tell policyholders that life settlements are among the alternatives to letting policies lapse, according to Georgia state Sen. Ralph Hudgens, R-Hull, Ga., the committee chair.
Hudgens says he has asked another committee member, Kentucky state Rep. Ronald Crimm, R-Louisville, Ky., to draft the model bill.
The model bill would require life insurers to advise insureds about all of the alternatives that would be available if the insureds ever decided to give up their policies.
Kentucky, Maine and Washington have enacted similar notice laws, Hudgens says.
Hudgens says he expects the model law to be introduced during the NCOIL annual meeting in Austin, Texas, in November.
Source: www.LifeandHealthInsuranceNews.com July 28, 2010
Hudgens says he has asked another committee member, Kentucky state Rep. Ronald Crimm, R-Louisville, Ky., to draft the model bill.
The model bill would require life insurers to advise insureds about all of the alternatives that would be available if the insureds ever decided to give up their policies.
Kentucky, Maine and Washington have enacted similar notice laws, Hudgens says.
Hudgens says he expects the model law to be introduced during the NCOIL annual meeting in Austin, Texas, in November.
Source: www.LifeandHealthInsuranceNews.com July 28, 2010
Wednesday, April 28, 2010
Brokers See Life Settlement Growth Opportunities
Thank God we are finally seeing some positive news from and about life settlement brokers. It appears things may be turning around in the life settlement industry! Finally! Below is an excerpt from a recent National Underwriter Magazine article by Trevor Thomas. It was published on 4/12/2010.
The life settlement business has been set back by the recession, but a number of factors are pointing to growth opportunities, according to settlement brokers speaking on at panel at the recent Life Settlement Summit in Miami.
More educated buyers and more realistic life expectancies are helping to create a demand for “quality paper,” said Mike Liebowitz, president and chief executive officer, Invescor Ltd., Farmington Hills, Mich. In addition, projected returns on settlement investments “are starting to be more realistic,” he said. “Buyers are coming back.”
Russel Dorsett, co-managing director of Select Life Corporation and director, Veris Settlement Partners, Rockville, Md., said the market “is coming back into balance. In 2009, there was a lot of paper and not enough buyers. Now we are rejecting three of five policies, so that’s improving.”
Rob Haynie, managing director, Life Insurance Settlements Inc. Fort Lauderdale, Fla., agreed there has been a recent rise in interest among buyers.
“There is more competitive bidding now than 12 months ago,” he said. “Capital is coming back now.”
But capital is looking for improved life expectancy projections, he said.
Jon B. Mendelsohn, president and chief executive officer, Ashar Group L.L.C., Orlando, Fla., says the settlement industry has helped consumers generate $1 billion from their life policies.
“We have a tremendous amount of legitimate inventories,” said Mendelsohn.
Members of the panel felt that increasing regulation of the life settlement industry by the states has been largely good for the industry.
Liebowitz said that 41 states, with 85% to 90% of the nation’s population, have regulations covering life settlements. This has helped stabilize the industry, he said.
“The fact that regulation is pervasive is a good thing all around,” Dorsett agreed. “Providers that don’t play by the rules are finding fewer places to play at all. We providers have to educate consumers and producers.”
In heavily regulated states, such as Virginia and Vermont, there is virtually no settlement activity, noted Dorsett.
“Other places, such as California and New York, will be good place to work.”
He said that although the industry can live with most recent state legislation, “there are some off-the-wall proposals being discussed. We can’t let down our guard; bad regulation once passed tends to spread to other jurisdictions.”
Haynie cited estimates by the American Council of Life Insurers, Washington that a total of $20 trillion in life face value is in force in the U.S. Yet 97% is in policies that ultimately lapse or are surrendered, he said.
“We try to get consumers good value,” he said.
Haynie said he thinks the industry needs to keep its message to seniors short, sweet and positive. “Seniors get turned off if you start with a negative,” he observed.
More than half of life insurance agents have a potential of substantial new income from settlements, Liebowitz said. “Agents often call looking for help for a client,” he reported.
Momentum for settlements dropped off in 2008-2009, but Liebowitz reported he recently has been having more conversations with life broker dealers.
“We’re starting to see momentum again,” he said. “We need legitimate, clean paper.”
“We have zero tolerance for any paper that does not seem to have originated legitimately,” Mendelsohn said. “We’ve had a tremendous amount of interest. The settlement industry is getting back to basics. We have serious players.”
Liebowitz said the life insurance industry is pushing back against life settlements “because they (insurers) realize they need to change. This industry will succeed; they can’t stop it.”
There has been a significant increase in people over-age-65 buying policies because more of them know life settlement is an option, Liebowitz reported. The vast majority of those who sell policies use the money for living expenses, he said.
The Life Settlement Summit was sponsored by National Underwriter Life & Health and other Summit Business Media publications.
The life settlement business has been set back by the recession, but a number of factors are pointing to growth opportunities, according to settlement brokers speaking on at panel at the recent Life Settlement Summit in Miami.
More educated buyers and more realistic life expectancies are helping to create a demand for “quality paper,” said Mike Liebowitz, president and chief executive officer, Invescor Ltd., Farmington Hills, Mich. In addition, projected returns on settlement investments “are starting to be more realistic,” he said. “Buyers are coming back.”
Russel Dorsett, co-managing director of Select Life Corporation and director, Veris Settlement Partners, Rockville, Md., said the market “is coming back into balance. In 2009, there was a lot of paper and not enough buyers. Now we are rejecting three of five policies, so that’s improving.”
Rob Haynie, managing director, Life Insurance Settlements Inc. Fort Lauderdale, Fla., agreed there has been a recent rise in interest among buyers.
“There is more competitive bidding now than 12 months ago,” he said. “Capital is coming back now.”
But capital is looking for improved life expectancy projections, he said.
Jon B. Mendelsohn, president and chief executive officer, Ashar Group L.L.C., Orlando, Fla., says the settlement industry has helped consumers generate $1 billion from their life policies.
“We have a tremendous amount of legitimate inventories,” said Mendelsohn.
Members of the panel felt that increasing regulation of the life settlement industry by the states has been largely good for the industry.
Liebowitz said that 41 states, with 85% to 90% of the nation’s population, have regulations covering life settlements. This has helped stabilize the industry, he said.
“The fact that regulation is pervasive is a good thing all around,” Dorsett agreed. “Providers that don’t play by the rules are finding fewer places to play at all. We providers have to educate consumers and producers.”
In heavily regulated states, such as Virginia and Vermont, there is virtually no settlement activity, noted Dorsett.
“Other places, such as California and New York, will be good place to work.”
He said that although the industry can live with most recent state legislation, “there are some off-the-wall proposals being discussed. We can’t let down our guard; bad regulation once passed tends to spread to other jurisdictions.”
Haynie cited estimates by the American Council of Life Insurers, Washington that a total of $20 trillion in life face value is in force in the U.S. Yet 97% is in policies that ultimately lapse or are surrendered, he said.
“We try to get consumers good value,” he said.
Haynie said he thinks the industry needs to keep its message to seniors short, sweet and positive. “Seniors get turned off if you start with a negative,” he observed.
More than half of life insurance agents have a potential of substantial new income from settlements, Liebowitz said. “Agents often call looking for help for a client,” he reported.
Momentum for settlements dropped off in 2008-2009, but Liebowitz reported he recently has been having more conversations with life broker dealers.
“We’re starting to see momentum again,” he said. “We need legitimate, clean paper.”
“We have zero tolerance for any paper that does not seem to have originated legitimately,” Mendelsohn said. “We’ve had a tremendous amount of interest. The settlement industry is getting back to basics. We have serious players.”
Liebowitz said the life insurance industry is pushing back against life settlements “because they (insurers) realize they need to change. This industry will succeed; they can’t stop it.”
There has been a significant increase in people over-age-65 buying policies because more of them know life settlement is an option, Liebowitz reported. The vast majority of those who sell policies use the money for living expenses, he said.
The Life Settlement Summit was sponsored by National Underwriter Life & Health and other Summit Business Media publications.
The life settlement business has been set back by the recession, but a number of factors are pointing to growth opportunities, according to settlement brokers speaking on at panel at the recent Life Settlement Summit in Miami.
More educated buyers and more realistic life expectancies are helping to create a demand for “quality paper,” said Mike Liebowitz, president and chief executive officer, Invescor Ltd., Farmington Hills, Mich. In addition, projected returns on settlement investments “are starting to be more realistic,” he said. “Buyers are coming back.”
Russel Dorsett, co-managing director of Select Life Corporation and director, Veris Settlement Partners, Rockville, Md., said the market “is coming back into balance. In 2009, there was a lot of paper and not enough buyers. Now we are rejecting three of five policies, so that’s improving.”
Rob Haynie, managing director, Life Insurance Settlements Inc. Fort Lauderdale, Fla., agreed there has been a recent rise in interest among buyers.
“There is more competitive bidding now than 12 months ago,” he said. “Capital is coming back now.”
But capital is looking for improved life expectancy projections, he said.
Jon B. Mendelsohn, president and chief executive officer, Ashar Group L.L.C., Orlando, Fla., says the settlement industry has helped consumers generate $1 billion from their life policies.
“We have a tremendous amount of legitimate inventories,” said Mendelsohn.
Members of the panel felt that increasing regulation of the life settlement industry by the states has been largely good for the industry.
Liebowitz said that 41 states, with 85% to 90% of the nation’s population, have regulations covering life settlements. This has helped stabilize the industry, he said.
“The fact that regulation is pervasive is a good thing all around,” Dorsett agreed. “Providers that don’t play by the rules are finding fewer places to play at all. We providers have to educate consumers and producers.”
In heavily regulated states, such as Virginia and Vermont, there is virtually no settlement activity, noted Dorsett.
“Other places, such as California and New York, will be good place to work.”
He said that although the industry can live with most recent state legislation, “there are some off-the-wall proposals being discussed. We can’t let down our guard; bad regulation once passed tends to spread to other jurisdictions.”
Haynie cited estimates by the American Council of Life Insurers, Washington that a total of $20 trillion in life face value is in force in the U.S. Yet 97% is in policies that ultimately lapse or are surrendered, he said.
“We try to get consumers good value,” he said.
Haynie said he thinks the industry needs to keep its message to seniors short, sweet and positive. “Seniors get turned off if you start with a negative,” he observed.
More than half of life insurance agents have a potential of substantial new income from settlements, Liebowitz said. “Agents often call looking for help for a client,” he reported.
Momentum for settlements dropped off in 2008-2009, but Liebowitz reported he recently has been having more conversations with life broker dealers.
“We’re starting to see momentum again,” he said. “We need legitimate, clean paper.”
“We have zero tolerance for any paper that does not seem to have originated legitimately,” Mendelsohn said. “We’ve had a tremendous amount of interest. The settlement industry is getting back to basics. We have serious players.”
Liebowitz said the life insurance industry is pushing back against life settlements “because they (insurers) realize they need to change. This industry will succeed; they can’t stop it.”
There has been a significant increase in people over-age-65 buying policies because more of them know life settlement is an option, Liebowitz reported. The vast majority of those who sell policies use the money for living expenses, he said.
The Life Settlement Summit was sponsored by National Underwriter Life & Health and other Summit Business Media publications.
The life settlement business has been set back by the recession, but a number of factors are pointing to growth opportunities, according to settlement brokers speaking on at panel at the recent Life Settlement Summit in Miami.
More educated buyers and more realistic life expectancies are helping to create a demand for “quality paper,” said Mike Liebowitz, president and chief executive officer, Invescor Ltd., Farmington Hills, Mich. In addition, projected returns on settlement investments “are starting to be more realistic,” he said. “Buyers are coming back.”
Russel Dorsett, co-managing director of Select Life Corporation and director, Veris Settlement Partners, Rockville, Md., said the market “is coming back into balance. In 2009, there was a lot of paper and not enough buyers. Now we are rejecting three of five policies, so that’s improving.”
Rob Haynie, managing director, Life Insurance Settlements Inc. Fort Lauderdale, Fla., agreed there has been a recent rise in interest among buyers.
“There is more competitive bidding now than 12 months ago,” he said. “Capital is coming back now.”
But capital is looking for improved life expectancy projections, he said.
Jon B. Mendelsohn, president and chief executive officer, Ashar Group L.L.C., Orlando, Fla., says the settlement industry has helped consumers generate $1 billion from their life policies.
“We have a tremendous amount of legitimate inventories,” said Mendelsohn.
Members of the panel felt that increasing regulation of the life settlement industry by the states has been largely good for the industry.
Liebowitz said that 41 states, with 85% to 90% of the nation’s population, have regulations covering life settlements. This has helped stabilize the industry, he said.
“The fact that regulation is pervasive is a good thing all around,” Dorsett agreed. “Providers that don’t play by the rules are finding fewer places to play at all. We providers have to educate consumers and producers.”
In heavily regulated states, such as Virginia and Vermont, there is virtually no settlement activity, noted Dorsett.
“Other places, such as California and New York, will be good place to work.”
He said that although the industry can live with most recent state legislation, “there are some off-the-wall proposals being discussed. We can’t let down our guard; bad regulation once passed tends to spread to other jurisdictions.”
Haynie cited estimates by the American Council of Life Insurers, Washington that a total of $20 trillion in life face value is in force in the U.S. Yet 97% is in policies that ultimately lapse or are surrendered, he said.
“We try to get consumers good value,” he said.
Haynie said he thinks the industry needs to keep its message to seniors short, sweet and positive. “Seniors get turned off if you start with a negative,” he observed.
More than half of life insurance agents have a potential of substantial new income from settlements, Liebowitz said. “Agents often call looking for help for a client,” he reported.
Momentum for settlements dropped off in 2008-2009, but Liebowitz reported he recently has been having more conversations with life broker dealers.
“We’re starting to see momentum again,” he said. “We need legitimate, clean paper.”
“We have zero tolerance for any paper that does not seem to have originated legitimately,” Mendelsohn said. “We’ve had a tremendous amount of interest. The settlement industry is getting back to basics. We have serious players.”
Liebowitz said the life insurance industry is pushing back against life settlements “because they (insurers) realize they need to change. This industry will succeed; they can’t stop it.”
There has been a significant increase in people over-age-65 buying policies because more of them know life settlement is an option, Liebowitz reported. The vast majority of those who sell policies use the money for living expenses, he said.
The Life Settlement Summit was sponsored by National Underwriter Life & Health and other Summit Business Media publications.
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