Michael Abraham

Investment Adviser Magazine

By: Sam Shaw

Managing Partners Limited (MPL) has signed a strategic partnership with Japanese asset manager United Investments to offer Japanese pension funds access to the returns available through life settlements.

MPL believes the Japan market for funds that invest in life settlements market could be as high as $1bn (£673.49m).

United has launched a private, locally regulated and domiciled fund, that will act as a feeder fund into MPL’s traded policies fund (TPL) – the first of its kind to invest TPLs, according to United.

Commentary by Michael Abraham:

This is an exciting development for MPL and life settlements in general as there is no doubt that once the Japanese understand and accept this product there can be much business from that country.

 http://www.ftadviser.com/InvestmentAdviser/Investments/Region/AsiaPacific/Japan/News/article/20100628/7dc1fd10-7d22-11df-8ad3-00144f2af8e8/MPL-in-strategic-deal-with-Japanese-asset-manager.jsp

The Life Settlements Report 

By: Dealflow Media

Keydata Investment Services founder Stewart Ford said the company was in the process of resolving tax liabilities with U.K. tax officials when the Financial Services Authority placed it under administration last June.

The FSA’s public statements that Keydata was insolvent because of a £5 million ($7.5 million) tax bill for investment products that were not eligible for tax-free status were “demonstrably wrong and misleading,” according to a statement released on Ford’s behalf Tuesday.

Commentary by Michael Abraham:

It is easy to assume that Ford’s comments are self serving and dishonest but that would assume that the regulators got it right.  They have yet to prove this but unfortunately Ford and KeyData have been tried and found guilty by the media.  Yet again a business and an individual could be ruined on the flimsiest of pretexts. The concept of innocent until proven guilty is unfortunately long gone.

http://lifesettlements.dealflowmedia.com/wires/article.cfm?title=Ford-Keydata-Trying-Resolve-Tax-Issues&id=lcpoxjuntsupbmb

Investment News

By: Darla Mercado

JGW Holdco’s bankruptcy filing points to problem for consumers and investors.

A recent bankruptcy protection filing by a provider of life settlements raises concerns that consumers in the midst of selling a policy, as well as investors, may get a raw deal in this and similar situations.

Last Monday, a Delaware bankruptcy court allowed JGW Holdco LLC and two other non-operating holding company affiliates, J.G. Wentworth LLC and J.G. Wentworth Inc., to emerge from Chapter 11 bankruptcy protection after the company encountered liquidity problems amid a tightening credit market.

Commentary from Michael Abraham:

I don’t understand this as it is my belief that funds must be deposited in an independent escrow account before contracts are sent out. This being the case how is the seller at risk?

http://www.investmentnews.com/article/20090607/REG/306079972

The Life Settlements Report 

By: Dealflow Media

The California Assembly insurance committee today approved a bill supported by the life settlement industry that seeks to rein in state insurance department officials from imposing rules that the settlement industry contends overstep the department’s authority.

The Life Insurance Settlement Association (LISA) has argued that emergency rules proposed by the California insurance department to enact the state’s new life settlement law exceeds the scope of the law. The life settlement law, adopted last year, takes effect July 1.

Commentary by Michael Abraham:

The problem we have at the moment is that regulators are reacting to media overhyped concerns rather than thinking for themselves.  They also show little consideration for the people who need money today – the life insured!  They may well use weasel words about protecting these  people but the regulations themselves build in and legalize the massive fees charged by the many advisers.  They need to take a new and fresh look at regulation in general. Perhaps a review of the UK rules on secondary sales of life policies might give them a clue!

http://lifesettlements.dealflowmedia.com/wires/article.cfm?title=California-Assembly-Committee-Approves-Bill-Reining-Insurance-Regulators&id=zkpspzqcedcnbgb

Investment Adviser Magazine

By: Bradley Gerrard

An education committee has been established to help bring greater transparency to the life settlements market.

The European Life Settlement Association (Elsa) has started an education committee in a bid to bring more education, transparency and provision of information to the public, media and regulators.

Life settlements, which turn US life insurance policies into tradable assets, expanded rapidly after the financial crisis due to having no correlation with market risk, as they have no stock, bond or property exposure.

Commentary from Michael Abraham:

This is good news if they deliver!

http://www.ftadviser.com/InvestmentAdviser/Investments/Products/ETFs/News/article/20100517/3b09e79c-5cfe-11df-9a85-00144f2af8e8/Life-settlements-get-education-comittee.jsp

PR Newswire

A New York state court recently rejected as a matter of law an insurance company’s attempt to rescind a $5 million life insurance policy, holding that the insurer – Lincoln Life & Annuity Company of New York – waived its rights to obtain rescission by seeking and accepting premium payments after it filed its lawsuit. The trial litigation firm Susman Godfrey L.L.P. represents the victorious policy owner. Lincoln’s lawsuit was based on allegations that the insurance policy lacked an insurable interest because it was procured by third-parties for investment purposes. The policy owner vigorously defended the legitimacy of the policy, and also contended that Lincoln’s post-litigation conduct — which included the acceptance of over $100,000 in additional premium payments, premiums Lincoln sought to retain in its lawsuit — barred Lincoln’s claims. The court agreed, and dismissed Lincoln’s suit after granting Susman Godfrey’s motion for summary judgment.

Commentary by Michael Abraham:

Though this is a great win it does indicate the problem of buying high value policies from people who have bought these purely for investment purposes rather than the intended purpose of life insurance – protection!

http://www.thestreet.com/story/10702516/susman-godfrey-wins-summary-judgment-in-5-million-life-settlement-rescission-lawsuit.html