New York State’s Insurance Department issued a list of 33 life settlement providers that met the requirements to be grandfathered during the application review process. The list of companies, including the largest providers in the industry, was much bigger than many industry observers had expected. Q Capital is one of the providers that is allowed to continue operating under the current guidelines. The procedure calls for these companies to have the authority to close transactions in the state while the insurance department reviews their applications. The providers will have to use the forms filed with the state for transaction closings. The full list of providers is available here.
Category: General
Q Capital’s John McCarroll Seeks Re-Election to LISA Board
The Life Insurance Settlement Association (”LISA”) convenes its 16th Annual Spring Life Settlement Conference in Washington, DC next week from April 28-30. At the spring conference, the association’s members vote for six Board members who will each serve a two-year term. It should be an interesting election, as 11 well-qualified candidates run for these six spots. It is important to the vitality of LISA that it has a strong, diverse Board of Directors that understands all aspects of the industry and can represent the many constituents of the association. In the current market environment, that means covering key legal, financial, and regulatory issues that face the life settlement industry today. One of the candidates standing for re-election is John McCarroll, Vice President-General Counsel of Q Capital Strategies, LLC, a leading full-service life settlement company and licensed provider. John has served on the LISA Board since 2005 and has been a Vice President of the Board and Chairman of its Legal Committee since 2008. Being a Board member of LISA is a real time commitment and takes serious dedication. I have seen first hand the countless hours that John has dedicated to LISA and passion he has for building a stronger organization and industry. John’s perspective on the Board is important – he combines a solid background in regulatory and insurance law with the practicality of working for a company operating in the industry everyday. John takes that perspective to ensure that sound regulation and policies are promoted and adopted without inhibiting the operations of the companies in the business. BEing on the LISA Board also involves listening to and understanding the concerns of all interested parties. John has proven that he can work with different companies and achieve progress. I hope that you will join me in supporting John’s re-election to the Board.
New York Insurance Department Proposes Emergency Rules
The New York Insurance Department issued a draft of emergency rules it’s proposing to implement the state’s new life settlements law. The proposed rules include new fees for providers.
The proposal that would require a provider to pay $20,000 for a license to operate in the state already is drawing the ire of providers who pay $500 for such licenses in other states.
The proposed rules also would require providers to pay $5,000 for biennial renewals. In addition, the draft rules would impose $10,000 licensing fees on intermediaries and $2,500 biennial fees.
Brokers would only be required to pay $40 for initial licensing fees and $40 for biennial fees.
The New York Insurance Department is accepting comments from the public on the draft rules until April 2.
Source: New York Insurance Department
ACLI Insanity
It is not frequent that I will come out and blast an organization or a person, but I think the threshold of absurdity has made it such that I must do so. The ACLI came out with a press release this week calling for the securitization of life settlements to be “prohibited by legislation or regulation.” Wow. That is a really bold statement. It is hard for me to understand, in a democratic society, that a trade association would call for an outright ban to a capital markets transaction. Keep in mind that the securitization market for life settlements has not even really developed yet. Whether it ever will or will not should be a function of the market to decide. This is the way that our society works. If an investment makes sense, eventually it will attract investors and grow as capital flows into that marketplace. If the investment does not make sense, either due to economical or structural reasons (i.e., lack of transparency, fraud, etc.), the capital will not flow into the investment, and the market will not develop. The life settlement market is a consumer-friendly market that puts enormous amounts of extra money into senior citizen’s pockets. This is the bottom line. How can anyone refute this? Historically, the vast majority of the bad news in the life settlement industry has resulted from defrauding investors, not policy sellers. It should be easy, through regulation, to mitigate this risk. It’s not like investors in stocks and bonds have never been defrauded. Has anyone ever called for the banning of these markets? We just witnessed, over the last two years, a tremendous destruction of capital in the mortgage backed securities market, but I have not heard anyone calling for the elimination of this securitization market. However, those markets did completely dry up until recently when investors came back into the market after changes were made that satisfied their requirements (more disclosure, better pricing, etc.). The ACLI is mixing issues to cloud the fact that they do not want to see money flow from their constituents (life insurance companies) to Joe Public senior consumer. That is unfriendly, and that is why the life settlement industry will not go away.
Russel Dorsett, President of the Life Insurance Settlements Association (LISA), released a statement this afternoon that I think summarizes the position against ACLI’s statement very well. To read the article, click here.
(Key words: Life Settlements)