Life Settlement is a growing market globally, from a $16 billion dollar per year industry to an expected annual growth rate well 'over $160 billion in the next several years,' according to Sanford Bernstein, a financial consultant. The life settlement market has gained much press in recent months about the potential for securitization of the asset class. The American Counselors of Life Insurance (ACLI) have tried to ban securitization, arguing that the investment banking industry's need for product (policies) to be securitized will lead to Seniors (over age 65) being encouraged to purchase life insurance polices for the sole purpose of reselling them, thereby fueling the securitization market. The purchase and resale of policies, however, is a perfectly good, and legal, method for Seniors to generate needed cash. In fact, many organizations have come to the defense of the consumer in this matter. The European Life Settlement Association (ELSA), formed in 2009, is one of the leaders against the effort to ban securitization, stating that it is a suspect and cynical argument, designed to prevent seniors from realizing the economic benefit in being able to purchase and resell life insurance policies and to eliminate a product and foreclose a market, securitized life policies, that could provide stable returns for investors.
Tranen Capital supports the position of ELSA. "There has never been a better time for seniors to be able to realize liquidity, whether they cannot afford premium payments, or to realize the economic benefit in a policy," states Kenneth A. Landgaard, managing director of Tranen Capital. "Transparency of purpose and intent, consumer rights and protections, and asset liquidity have to be at the core of this argument, not the insurance industry's profiting from policy lapses," concludes Landgaard.
SOURCE Tranen Capital Ltd.
Back to topRELATED LINKS
http://www.TranenCapital.com