Download Life Risk News Volume 3, Issue 7, July 2024

It’s now a year since UK regulator the Financial Conduct Authority brought in its new Consumer Duty, a regulation requiring all financial services firms to ‘act to deliver good outcomes for retail customers’ for all new (and now, closed) product offerings. While there are fundamental benefits of this to the country’s equity release market, it’s not a needle mover in terms of greasing the wheels of supply. Greg Winterton spoke to Ben Grainger, Partner at EY, for his thoughts on the topic in UK Consumer Duty Barely Impacting an Equity Release Market Desperate for Interest Rates to Fall. 

Cardiovascular disease is the world’s leading cause of death, accounting for nearly 18 million lives annually, or 33% of the total, well ahead of cancers which are the second most common cause. When it comes to early onset CVD specifically, recent research by BMC Public Health based on data extracted from China’s Kailuan Study shows an interesting disparity, as Aaron Woolner explains in Research Demonstrates Gender Differences in Early Onset Heart Disease. 

Life settlement asset managers pay significant sums of money to keep a life insurance policy in force until the insured dies. These sums can, and very often do, stretch to millions of dollars from when they assume ownership of a policy to when it matures. But what happens if a policy they own is declared void ab initio because of a lack of insurable interest? Greg Winterton spoke to Lee A. Pepper, Partner at ArentFox Schiff, to learn about the impact of the recent Delaware Supreme Court ruling in Seck Affirmation Keeps Return of Premium Waters Muddy for Life Settlement Market. 

The US Department of Labor has concluded its review of the regulatory framework for the pension risk transfer market and decided not to take any action at the moment, but it has left the door open for future rule changes. Aaron Woolner takes a closer look at the DoL’s recent report to the US Congress in US Authorities Leave Pension Risk Transfer Rules Untouched. 

With around $45bn of transactions, 2023 was the second busiest year on record for PRT deals in the US, and that pace was sustained during the first quarter of 2024. But many of the deals so far have been for plans that only feature retirees. By contrast, most of the plans now coming to market have large numbers of deferred lives – employees or former employees yet to begin taking their benefits. This adds significant uncertainty for insurers, as Caitlynn Greenfield, Director, Insurance Consulting and Technology, Justin Bevan, Associate Director, Insurance Consulting and Technology, and Stan Roberts, Associate Director, Insurance Consulting and Technology at WTW explain in Making Sense of Pension Risk Transfer Deals for Deferred Lives, a guest article this month. 

Back in April this year, the Florida Fifth Judicial Circuit Court delivered some good news to the life settlement industry. Brian Casey, Partner at Locke Lord, explains more in Premiums Paid Offset Awarded to Investor in Florida Estate Recovery Case, our second guest article this month. 

Both LISA’s and The Deal’s annual life settlement provider analyses have now been published, so for our Q&A this month, Greg Winterton spoke to Abacus Life CEO Jay Jackson to get his thoughts on the current state of the life settlement landscape. 

For senior living investors, the risk associated with investing in the space has typically been a real estate one – vacancy rates. Many investors and operators in the market don’t focus nearly as much on longevity risk, however. Greg Winterton spoke to Chris Conway, Chief Development Officer at ISC Services, to get his thoughts on the benefits of longevity risk analysis for senior living investors in Should Senior Living Investors Pay More Attention to Longevity Risk?