what financial advisors need to know about life settlements today veris webcast october 28, 2008 j....
TRANSCRIPT
![Page 1: What Financial Advisors Need to Know About Life Settlements Today VERIS Webcast October 28, 2008 J. Russel Dorsett, CLU](https://reader033.vdocument.in/reader033/viewer/2022051820/5697bf831a28abf838c863d1/html5/thumbnails/1.jpg)
What Financial Advisors Need to Know About Life
Settlements Today
What Financial Advisors Need to Know About Life
Settlements Today
VERIS WebcastOctober 28, 2008
J. Russel Dorsett, CLU
![Page 2: What Financial Advisors Need to Know About Life Settlements Today VERIS Webcast October 28, 2008 J. Russel Dorsett, CLU](https://reader033.vdocument.in/reader033/viewer/2022051820/5697bf831a28abf838c863d1/html5/thumbnails/2.jpg)
A network of independently owned and operated life settlement brokers
Dedicated to:• Local service on a national basis
• Transparency
• Compliance
• Professionalism
Bringing Liquidity to Life . . .
![Page 3: What Financial Advisors Need to Know About Life Settlements Today VERIS Webcast October 28, 2008 J. Russel Dorsett, CLU](https://reader033.vdocument.in/reader033/viewer/2022051820/5697bf831a28abf838c863d1/html5/thumbnails/3.jpg)
Challenging times . . .• On-going financial crisis is having an impact
• Dramatic reduction in global liquidity
• Some major players have (at least temporarily) left the space
• “Table revisions” by 21st has led to uncertainty about portfolio values
• LEs are longer
• Expected rates of return are higher
• “dropped deals”
The Life Settlement Market The Life Settlement Market
![Page 4: What Financial Advisors Need to Know About Life Settlements Today VERIS Webcast October 28, 2008 J. Russel Dorsett, CLU](https://reader033.vdocument.in/reader033/viewer/2022051820/5697bf831a28abf838c863d1/html5/thumbnails/4.jpg)
The Life Settlement Market The Life Settlement Market
Impact of “buyer’s market”• Marginal files (longer LEs, younger insureds, higher
premiums, too much CSV, etc.) aren’t attracting offers
• Quality files are attracting fewer (and lower) offers−LEs tend to be 20 -30% longer than a year ago−Expected returns have moved up
Despite a difficult market, files are still being sold and are funding
Flow of new cases holding up well
![Page 5: What Financial Advisors Need to Know About Life Settlements Today VERIS Webcast October 28, 2008 J. Russel Dorsett, CLU](https://reader033.vdocument.in/reader033/viewer/2022051820/5697bf831a28abf838c863d1/html5/thumbnails/5.jpg)
The Life Settlement Market The Life Settlement Market
Good news/bad news:• High level of interest in the asset class continues
• Despite uncertainty about past LEs, portfolio valuations have held up well (especially compared to the markets overall)
• “Uncorrelated” nature of the asset class has been reinforced—and is more desirable than ever
• Money managers can’t stay on the sidelines forever—especially as interest rates (and asset values) continue to decline
As markets stabilize• “Alternative” asset classes likely to receive higher allocations
• Life settlements are among the most desirable asset classes in this space
![Page 6: What Financial Advisors Need to Know About Life Settlements Today VERIS Webcast October 28, 2008 J. Russel Dorsett, CLU](https://reader033.vdocument.in/reader033/viewer/2022051820/5697bf831a28abf838c863d1/html5/thumbnails/6.jpg)
The Life Settlement Market The Life Settlement Market
Good news/bad news• Policy holder awareness of and interest in settlements
continues to grow
• In an period of generally declining asset values, the settlement of an in-force policy may be the only source of cash for some seniors
The primary market is flat• Applications for new insurance declining for many
companies
• Only bright spot for many is large policies on seniors
• It is sometimes easier to talk about delivering checks rather than having someone write one . . .
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The Life Settlement Market The Life Settlement Market
Life settlements are rapidly moving into a regulated environment• California, Illinois, and New York all came close to passing
legislation this year
• NY will likely re-consider legislation in the up-coming special session
• Florida is also potentially re-visiting settlement law
• Some of the “bad” provisions in NAIC/ACLI approach could spill over into primary market regulation
“STOLI” concerns and litigation impacting closing requirements
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The Life Settlement Market The Life Settlement Market
Very few buyers currently for financed policies, but still should be explored as a exit strategy
Good value available for policies in the “sweet spot”
For more marginal cases, consider paying another quarterly and letting things settle a bit
Credibility with providers and funders, technical expertise, and closing ability more important than ever . . .
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What Financial Advisors Need to Know About Life
Settlements Today
What Financial Advisors Need to Know About Life
Settlements Today
VERIS WebcastOctober 28, 2008
J. Russel Dorsett, CLU