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Betty's Corner


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The Life Settlements Report

Life Insurance Association of Massachusetts, met to reach a compromise. "I believe it will protect the industry," Koutoujian said. "More importantly, it will protect the rights of the consumer."

The bit! is based on the model law developed by the NationaJ Conference of Insurance Legislators (NCOIL), but with a revised definition of strangeroriginated life insurance (STOLl) that has been agreed upon by 14 other states in the past two years, according to a Financial Services Conunittee researcher. It says STOLl is an "act, practice or arrangement to initiate the issuance of 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 life of the insured." The revised definition deletes the word "plan," which would make applicants for insurance who plan in the future to sell their policies guilty of engaging in STOLls, although they hadn't done anything wrong.

It also removes the complete prohibition on the use of premium financing in the NCOIL model and replaces it with less restrictive language that allows premium financing as long as the person doing so does not receive any proceeds, fees or other consideration from the policy or owner beyond what's required for principal, interest and reasonable costs. The bill, which allows policies to be sold two years after issuance, would replace the viaticallaw. Currently, Massachusetts only regulates viaticals.

LLMA Proposes Index Framework

The Life & Longevity Markets Association (LLMA) is seeking comment on a proposed longevity index framework to serve the macro-longevity 11Sk market and has added two new members.

London-based liMA focuses on developing standards for longevity risk transfers in the macro-longevity market, mainly for pension funds and insurance companies. It does not serve the life settlements market. The association has been working to create standard indices for investors seeking smaller longevity risk investments of shorter time durations. U.K. pension liabilities alone are said to exceed 2 trillion ($3.07 triltion).

LLMA on Aug. 18 published a draft framework to provide standards for developing public and private longevity indices that market participants can use to execute longevity hedge ransactions. It is requesting market feedback by Oct 4 and plans final adoption in early autumn.

Earlier this year, J.P. Morgan offered the intellectual property of its LifeMetrics index to the association to develop industry standards.

"The LLMA's index framework was built out of the intellectual capital of all its members, and ofcourse that included making use of some of the expetience gained from the JP Morgan LifeMetrics index," said Guy Coughlan, chairman of the LLivIA technical committee and managingdirector of J.P. Morgan's pension advisory group, in an email.

Key elements of the proposed framework include a set of principles for all longevity indices and methodology guidelines, LLMA said in an Aug. 23 statement Indices can use different, customized pools of lives, such as national populations of countties, populations of annuitants and populations of pensioners.

Morgan Stanley and UBS have joined the association, bringing membership to 10 members, LLMA said in July. The addition of the two banks brings an international dimension to the association, Coughlan said.

"When one considers the size of the worldwide market it becomes clear that all parties benefit from the development of a liquid traded market in life and longeVity risks, and that this extends across the developed world, far beyond the U.K.," he said in the July statement.

SL Investment Reports 10% Return

SL Investment Management's two-year-old Life Plus Life Settlement Fund has earned a lO.26% return since its launch, the Chester, England-based company said in a statement Tuesday.

The fund has had $13.3 million in life policy maturities.

SL Investment's valuation method is unlike other companies that use mark-to-model valuations that can vary greatly, said Investment Director Patrick McAdams. "SL assumes very few maturities will occur shortly after policy acqUisition, and users] a very transparent actuarially based model to approximate market value," he said in the statement.

SL Investment is planning to launch a second Life Plus fund. The company, which also works with traded endowment policies, had 930 million ($15 billion) under management and advice as of Dec. 31.

LifeLine Holds onto Star Betty White

Celebrity Betty White is showing no signs of slowing down as the octogenarian has seen a resurgence of her 60-year career. While juggling Emmy Awards, television shows, book deals, commercials and even a pin-up calendar, she still has time to hawk life settlements.

White has extended her spokeswoman job for Atlanta-based proVider The Lifeline Program for another three years, said Stephen Terrell, Lifeline's senior vice president of marketing.

White has been the spokeswoman for Lifeline for five years. Her smiling face is featured prominently on the company's website and in promotional materials. She also attends speaking engagements, Terrell said.

"We use Betty as a voice to help educate consumers, agents and financial institutions about the benefits of life settlements to each of the target markets," Terrell said.

White believes life settlements are an important option for people in her age group, although she has not done one herself, Teo-elJ said.

Terrell declined to say how much White is making, but she was "all for" negotiating a new contract. "For us she is worth every penny," Terrell said.

During her tenure as Lifeline spokeswoman, White has developed friendships with Terrell and chief executive William Scott Page. Page even attendee! the taping of the Saturday Night Live show for which she has recently earned her latest Emmy, Terrell said. He said White will be coming to Atlanta soon to film a Hallmark movie.

Terrell said White's renewed life settlement gig is positive for the industry as a whole, which he believes is poised for growth.

Hirings & Firings

Titus van Heur recently resigned as chief executive and partner with the European Life Settlements Fund, a Luxembourg-regulated fund that he started two-and-a-half years ago.

Van Heur said in an email that he is running his own firm, Trajanus Investments, in the Netherlands, handling consulting and interim management work mainly in the life settlement space.

Nik Volkov, chief financial officer of Milestone Managers & Providers, left the proVider firm a month ago.

Volkov said he sold his 20% partnership in the firm, which is based in Lancaster, Pa. He said he didn't want to go into details on why he decided to leave the firm.

Volkov, 28, said he wants to remain in the life settlement market and is open to ideas to discuss possible positions. He said he has worked in the market for five years.

Volkov who lives in Lancaster. Pa., said he and his fanilly are planning to move soon to Boca Raton, Fla. He and his wife are expecting a second son.

Correction

Michael Freedman, senior vice president for government affairs with prOVider Coventry First, said he erred in a story on the Government Accountability Office in the Aug. 19 issue. He should have said that the GAO report shows tbat the average compensation paid to brokers between 2006 and 2009 was 2.5% of the face amount of the policy or 11.9% of the total offer.


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