webcast guidelines the audience is in listen-only mode. please e-mail questions via the q&a...
TRANSCRIPT
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Webcast Guidelines
The audience is in listen-only mode.
Please e-mail questions via the Q&A panel box.
Select audience questions will be answered duringthe last five minutes of the program.
WebEx customer support: 866-229-3239
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ModeratorDonna HorowitzSenior Editor, Life SettlementsThe Deal
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Expert PanelDaniel YoungVice President, Portfolio ManagementVida Capital
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Expert PanelJule RousseauPartnerArent Fox
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Life settlements - Secondary Market
Daniel YoungVice President, Portfolio Management
Vida Capital
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Dan Young – President of Magna Life Settlements, Inc.
• Magna was the Number One Provider in Industry in 2013• Closed Most Face Value and Deployed Most Capital
• Sees Large Policy Flow in Secondary Market
• Mix of Captive Capital and Third Party Funding Sources• Owned by Vida Capital, Inc.
• Consistent Capital and Execution
• Diverse Buy Boxes
• Due Diligence and Execution
Secondary Market
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Secondary Market Advantages
• Consistent Flow
• Consistent Pricing
• Control Closing Process
• Barriers to Entry
• Policy by Policy Selection
• Insured Involvement in Process
Secondary Market
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Policy Supply
• Quantity Down but Quality Up• Average Issue Dates Prior to 2003• Average Age Over 75 Years Old• Average LE Less than 140 Months• Average Face Less than $5MM• More Policy Owner Awareness
Policy Demand
• Low Correlation• Increased Regulation• Attractive Policy Pricing• Improved LE Accuracy
Secondary Market
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Life Expectancy reports and face amount are not the only variables to consider for valuation of policies
• Other Important Factors• Underwriting Class of Insured
• Premiums
• Maturity Extension Rider
• No Lapse Guarantee
• Break Even Analysis
• Policy Origination
Secondary Market
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CURRENT DEVELOPMENTS IN LITIGATION
Jule RousseauPartner
Arent Fox
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Current Developments in Litigation
Brasner trial court decision— good faith required, challenge after 2 years (Pruco Life Ins. Co. v. Brasner, No. 08-cv-80804, D.E. 246 (S.D. Fla. Nov. 14, 2011); Pruco Life Ins. Co. v. U.S. Bank, 2013 WL 4496506 (S.D. Fla. Aug. 20, 2013))
Cotton trial on good faith—impossible task (Sciarretta v. Lincoln Nat. Life Ins. Co., No. 08-cv-80427, D.E. 150 (S.D. Fla. Mar. 2, 2012))
Appeals now in 11th Circuit (Oral argument in Brasner scheduled for September 10, 2014)
Discussion Points: FL Stat on property/life, prior cases, and leading 11th Cir decision
Florida law—what can we expect?
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Current Developments in Litigation
U.S. v. Binday, et al., No. 12-CR-00152 (S.D.N.Y.) Issues raised for investors on cases? Impact on market – Is this a new blemish? Carrier truths about STOLI admitted in evidence;
will courts ignore it as this court did?
NY Federal Court criminal case—agents perpetrating STOLI
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Current Developments in Litigation
Status -- Lima LS PLC v. PHL Variable Ins. Co. et al., No. 12-cv-01122 (D. Conn.); U.S. Bank, N.A. v. PHL Variable Ins. Co., et al., No. 13-cv-01580 (S.D.N.Y.)
Relevance to other carriers Aggressive pursuit of agents for chargebacks
Phoenix cases—COI, RICO
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Current Developments in Litigation
9th Cir decisions (Wells Fargo Bank, N.A. v. American Nat. Ins. Co., 438 Fed.Appx. 838 (9th Cir. 2012); Hartford Life and Annuity Ins. Co. v. Barnes, 552 Fed.Appx 664 (9th Cir. 2014))
Fishman remains (Lincoln Nat. Life Ins. Co. v. Fishman, 638 F. Supp.2d 1170 (C.D. Cal. 2009)), Teren provides comfort (Lincoln Life & Annuity Co. of N.Y. v. Berck, 2011 WL 1878855 (Cal.App. May 17, 2011))
California law—developments in last year
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Question and Answer Session
Donna HorowitzSenior Editor, Life Settlements
The Deal
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Thank you for joining the webcast.
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