Last month, July, 2010, a long awaited study on the life settlement industry was published by the U.S. Government Accountability Office (GAO). Two major points jump out from the report.
Last month, July, 2010, a long awaited study on the life settlement industry was published by the U.S. Government Accountability Office (GAO). Two major points jump out from the report.
First, the life settlement industry brings significant value to consumers. The report contained a government survey which showed that consumers doing a life settlement received, on average, almost 8 times the surrender value. A settlement sure beats lapsing or surrendering a policy!
Second, inconsistent and poor legislation hurts everybody. Life settlement regulation runs the gamut with some states having no legislation regulating life settlements at all, while others have legislation so draconian that it effectively shuts down the industry. An absence of legislation leaves consumers and everyone else in the life settlement industry unprotected from unscrupulous operators. On the other hand, unworkable legislation leaves consumers with no option other than surrendering their policy to the insurance company.
Fortunately, most of the states enacting new statutes have adopted legislation based on the NCOIL (National Conference of Insurance Legislators) Model Act which properly regulates life settlements as opposed to the unusable NAIC (National Association of Insurance Commissioners) model pushed by insurance industry groups intent on wiping out life settlements to the detriment of consumers.
Life settlement industry spokesmen point to the GAO report as confirming the value of life settlements and how important proper legislation is to the industry and the consumer.
After 5 years in private law practice, Peter Katz has spent over 30 years in the life insurance and financial services industry. Known for his Advanced Sales, Legal and Marketing expertise at Connecticut Mutual, Mass Mutual, Sun Life of Canada and Phoenix Life, Peter has also headed product development activities, financial planning support, illustration software development, COLI and nonqualified and qualified benefit planning. Peter has authored numerous articles on life insurance planning and life settlements and has been a speaker at many industry and insurance company meetings. He is a Director and Secretary-Treasurer of the Hartford Chapter of the Society of Financial Service Professionals and a former member of the LIMRA Advanced Sales committee. He is currently works as a life settlement broker and as a consultant specializing in life insurance advanced sales illustrations. He can be reached at pkatzlife@yahoo.com or (860) 673-3642.
