A few reports came out over the last week regarding the life settlement market and how it will be regulated. The Securities and Exchange Commission Task Force released a report indicating recommendations to list life settlements as securities. By doing so the life settlement market would be protected under security rules and laws. They sight an inconsistancy in regulations from participants in the market, including agents, brokers and funding companies, to providers of actuarial life expectancy reports. They believe a more regulated control would lead to a safer consumer. The Chairman of the SEC Mary Schapiro wants a more cooridnated oversight to protect the consumer and more importantly, the senior market. She states that standards should be put in place to provide a more polished and trusted product. Below is the findings the Task Force came up with for their outline of the settlement market.
- amending the definition of a life settlement to fall under the security category
- install monitoring devices to make certain legal standards are being met by agents and brokers
- monitoring the settlement market securitization
- consider more significant regulation of the underwriters of a life settlement
As the life settlement market evolves, more and more clarity needs to be introduced. The settlement market has done a very good job self policing and self regulating to date. But just as any significant market evolves so to do those willing to push the limits of policy and procedure. The report from the SEC Task Force exemplifies their desire to get out in front of these issues and start to put in place regulations to protect all of those parties involved. Stay tuned in by visiting our LIVEpdq webcast.