A.M. Best Presents at VLSAA Life Settlement Conference.OLDWICK, N.J. -- Emmanuel Modu, head of Structured Finance at A.M. Best Co., will be speaking about life settlement securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. at a conference sponsored by the Viatical vi·at·i·cal adj. 1. or vi·at·ic Of or relating to traveling, a road, or a way. 2. Of or relating to a contractual arrangement in which a business buys life insurance policies from terminally ill patients for a percentage and Life Settlement Association of America (VLSAA VLSAA Viatical and Life Settlement Association of America ) on November 10, 2005. The conference is held November 9-11 in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY. Life settlement securitization has generated a great deal of interest in the capital markets. Indeed, some financial institutions have been financing the accumulation of life settlement portfolios they intend to securitize Securitize The practice of a company selling accounts receivables or other debts owed to it. The third party that buys the debt assumes ownership of it and the responsibility for collecting the debts, and keeps the repayments when made. in the future. The life settlement market, however, is one that is filled with unrealistic expectations about the depth and efficiency of the market and the returns that can be achieved by investors. After having studied the life settlement market for the past three years, A.M. Best remains convinced that the growth of life settlement securitization will depend on several critical factors: --The increased standardization of general methods for establishing life expectancies Life Expectancy 1. The age until which a person is expected to live. 2. The remaining number of years an individual is expected to live, based on IRS issued life expectancy tables. of insureds; --Empirical data on mortality trends in existing portfolios; --The transparency of the pricing of life settlements; --The adoption of more favorable accounting treatment of life settlements; --Effective industry regulatory oversight and self-policing; and, --The establishment of rating agency standards for assessing the credit risks associated with such transactions. Mr. Modu will discuss these subjects as well as explore the analytical issues associated with life settlements, the lessons learned in past life settlement securitization efforts, the new trends in structures of proposed transactions, and the new rating methodology, Life Settlement Securitization, published by A.M. Best on September 1, 2005. For more information on A.M. Best's Rating Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. Methodologies or to download a copy of this full methodology report, visit www.ambest.com/ratings/methodology.html. The VLSAA's Web site is www.viatical.org. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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