ABA Recognition Signals Tipping Point for Secondary Market for Life Insurance Announces Coventry First.Business Editors FORT WASHINGTON Fort Washington, military post during the American Revolution, situated on the highest point of Manhattan island, New York City, overlooking the Hudson River opposite Fort Lee, N.J. , Pa.--(BUSINESS WIRE)--March 12, 2004 The secondary market for life insurance is pro-competitive and pro-consumer concludes an article published by the American Bar Association American Bar Association (ABA), voluntary organization of lawyers admitted to the bar of any state. Founded (1878) largely through the efforts of the Connecticut Bar Association, it is devoted to improving the administration of justice, seeking uniformity of law . The article entitled "The Benefits of a Secondary Market for Life Insurance Policies" in the ABA's Real Property, Probate probate (prō`bāt), in law, the certification by a court that a will is valid. Probate, which is governed by various statutes in the several states of the United States, is required before the will can take effect. and Trust Journal (Fall 2003), confirms the legal community's acceptance of the secondary market as an option for consumers. The study conducted by The Wharton School, University of Pennsylvania (body, education) University of Pennsylvania - The home of ENIAC and Machiavelli. http://upenn.edu/. Address: Philadelphia, PA, USA. , determined that by encouraging competition for underperforming or unneeded life insurance policies, the secondary market enhances policy valuations for consumers and leads to product innovation. Their conclusion is supported by an analysis showing that policyowners realized more than $240 million over cash surrender value The amount of money that an insurance company pays the insured upon cancellation of a life insurance policy before death and which is a specific figure assigned to the policy at that particular time, reduced by a charge for administrative expenses. from life settlements in 2002 alone. The authors go on to recommend that lawmakers responsible for regulating the industry should design legislation that encourages participation and investment in the market. "The ABA's recognition of the secondary market not only reflects the growing acceptance of the secondary market among legal professionals, but should serve to solidify the emerging consensus that secondary market transactions fall within the fiduciary responsibility of the trust and estate attorney," says Alan H. Buerger, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Coventry First. "We commend the ABA for recognizing the consumer benefits presented by the secondary market and for bringing the matter to its members." The article cites examples from other secondary markets in financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. to illustrate the consumer benefits of the market. "The secondary market for life insurance policies has generated an increase in the liquidity of life insurance policies in much the same way that improvements in the secondary market for home mortgages and catastrophic risk insurance improved the liquidity of the underlying assets in those markets. Secondary markets ... also mitigate downside risk Downside Risk An estimation of a security's potential to suffer a decline in price if the market conditions turn bad. Notes: You can think of this as an estimate of the amount that you could lose on a stock or other investment. of purchases in the primary market and ... likewise should be expected to cause consumers in the primary market for life insurance to demand a greater quantity of coverage," report the authors. Coventry First (www.coventryfirst.com) bridges insurance and capital markets to create groundbreaking products for the financial services industry. The company created the secondary market for life insurance and pioneered the resulting life settlement industry. Fueled by bold ideas, a deep understanding of life insurance and impeccable ethical standards, Coventry First continues to lead the market by opening new opportunities for consumers and the financial professionals who serve them. Based in Fort Washington Pennsylvania, Coventry First was named the 12th fastest-growing privately owned company in Inc. Magazine's 2003 ranking of the fastest-growing private companies in the U.S. |
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