Timelines

General History - Life Settlements
Legal & Regulatory History
General History - Life Settlements
Today
INDUSTRY GAINS IN LIQUIDITY DRIVING YIELDS TO MID-TEENS. ALTHOUGH VOLUME IN THE SECONDARY MARKET IS STILL SUB $2B THE TERTIARY INDUSTRY CONTINUES TO TRADE OVER $7-10B/ YEAR OF ITS AVAILABLE $90B OF OWNED POLICIES. LONGEVITY, LITIGATION, AND REGULATORY DEVELOPMENT TIMELINE
2013 / 2014
Apollo and Blackstone enter as major buyers taking advantage of limited capital sources and 10 years of performance data to support longevity forecasting going forward. TPG and Berkshire Hathaway also begin to dabble in the industry.
2013
The secondary market has slumped to pre-2003 levels (less than $2b) and remains at this level today.
2010 / 2012
Only major buyers that are active are AIG, a few foreign pension funds, and Preston Ventures through its affiliates.
2009 / 2011
Some distressed portfolio sellers are forced to sell leaving large portfolios in the hands of Fortress, Mckinsey & Co., Monarch, and Kohlberg.
2009
Carriers reprice new issue products and implement underwriting standards such that premium finance is no longer a viable investment.
2009
Global financial crisis and reevaluation of life expectancies dries up most available capital for life settlements causing an illiquid market. Returns for the few policies/portfolios sold now in excess of 20%.
2007
MAJOR BANKS AND SOME REINSURANCE COMPANIES INCLUDING WELLS FARGO, RBS, WACHOVIA, HANOVER RE, FIFTH THIRD, WEST LB, DZ BANK ALL BEGIN TO FINANCE PORTFOLIOS OF LIFE SETTLEMENTS FOR INVESTORS.
2006
FASB sets standards for accounting for the asset class.
2005
Premium finance becomes a dominate origination tool for agents as Investment from Hedge Funds and Investment Banks increased demand for product outstrips $2b “natural” supply. Manufactured policies spike available supply to over $10b annually.
2004 / 2006
LIQUIDITY GROWS FOR LIFE SETTLEMENTS AS WALL STREET FIRMS AND EUROPEAN BANKS INCLUDING GOLDMAN, UBS, KBC, DEUTCHE BANK, MERRIL LYNCH, DAVIDSON KEMPNER, AIG, MIZUHO AND OTHERS TO ENTER THE ASSET CLASS AS DIRECT INVESTORS.
2003
First rated securitization of packaged life settlements combined with annuities are sold to investors (LILACs).
2002
German closed end funds become the primary buyer of life settlements, taking advantage of a tax loophole until the loophole is closed in 2006.
early 2000's
Life Settlements become a $2b industry, allowing seniors a fairly liquid alternative to “cashing in” to the life carrier.
1995
Life Insurance Settlement Association (LISA) is formed to regulate the industry and develop professional standards.
1980's
HIV/AIDS epidemic provides catalyst for market – especially those with a life expectancy of less than 2 years.
1911
US Supreme Court rules that life insurance policies are personal property and as such can be assigned to any other person, including those without an “insurable interest”.

Timelines