Transcript Document

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Moderator
Donna Horowitz
Senior Editor, Life Settlements
The Deal
Expert Panel
Daniel Young
Vice President, Portfolio Management
Vida Capital
Expert Panel
Jule Rousseau
Partner
Arent Fox
Life settlements - Secondary Market
Daniel Young
Vice President, Portfolio Management
Vida Capital
Secondary Market
Dan Young – President of Magna Life Settlements, Inc.
• Magna was the Number One Provider in Industry in 2013
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Closed Most Face Value and Deployed Most Capital
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Sees Large Policy Flow in Secondary Market
• Mix of Captive Capital and Third Party Funding Sources
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Owned by Vida Capital, Inc.
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Consistent Capital and Execution
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Diverse Buy Boxes
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Due Diligence and Execution
Secondary Market
Secondary Market Advantages
• Consistent Flow
• Consistent Pricing
• Control Closing Process
• Barriers to Entry
• Policy by Policy Selection
• Insured Involvement in Process
Secondary Market
Policy Supply
Policy Demand
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Quantity Down but Quality Up
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Average Issue Dates Prior to 2003
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Average Age Over 75 Years Old
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Average LE Less than 140 Months
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Average Face Less than $5MM
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More Policy Owner Awareness
Low Correlation
Increased Regulation
Attractive Policy Pricing
Improved LE Accuracy
Secondary Market
Life Expectancy reports and face amount are not the only variables to consider for
valuation of policies
• Other Important Factors
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Underwriting Class of Insured
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Premiums
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Maturity Extension Rider
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No Lapse Guarantee
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Break Even Analysis
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Policy Origination
CURRENT DEVELOPMENTS IN
LITIGATION
Jule Rousseau
Partner
Arent Fox
Current Developments in Litigation
Florida law—what can we expect?
 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
Current Developments in Litigation
NY Federal Court criminal case—agents perpetrating STOLI
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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?
Current Developments in Litigation
Phoenix cases—COI, RICO
 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
Current Developments in Litigation
California law—developments in last year
 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))
Question and Answer Session
Donna Horowitz
Senior Editor, Life Settlements
The Deal
Thank you for joining the webcast.