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31 March 2011

Life Settlements; SL says market detox may lead to some casualties, but the good will thrive

SL Investment Management (SL), one of the UK's leading Life Settlement product providers, claims that the asset class is poised on the brink of maturation on both sides of the Atlantic due to a combination of increased regulation and governance.

July 2010 saw the publication of two significant reports on the future of life settlements, one by the Securities and Exchange Commission Taskforce (SEC) and the Government Accountabilities Office (GAO); The GAO Report concluded that the option to sell a policy on the secondary market provided a valuable consumer benefit for sellers, while both highlighted the need for increased regulation at federal rather than state level to provide universal, and hitherto unseen, protection for investors. 

SL believes that increased regulation will lead to increased transparency in the supply chain where some practices and commissions have been of concern, and will result in the demise of some middlemen in the US.

Closer to home, UK fund providers will see a continued cull; liquidity and good governance will determine the winners and losers in fund provision. The lessons of the past will be demonstrated with fee transparency coupled with a rigorous approach to managing liquidity: essential attributes for institutional investors.

This sea change is warmly welcomed by SL Chief Executive Officer, Jeremy Brettell who says:

"There are a number of reasons why the life settlements market place is set to thrive; supply side strength and stability is combining with demand side market maturity.  And this, coupled with the industry detox taking place due to increased regulation on both sides of the pond will create the right conditions for well governed market players with the highest ethical standards to surge forward during the next few years."