NU Online News Service, May 12, 2004, 5:19 p.m. EDT – Coventry First L.L.C., Fort Washington, Pa., is accusing a life settlement underwriting firm of encouraging overly aggressive life settlement pricing.[@@]
Companies in the viatical settlement market buy life insurance policies from terminally ill insureds, and companies in the life settlement market buy life policies from older insureds.
Coventry, a company that has been active in the viatical and life settlement markets, has filed a complaint in the U.S. District Court in Philadelphia that accuses Examination Management Services Inc., Waco, Texas, of making unrealistic mortality projections.
Investors who buy life policies through the competitors that use the projections “will suffer significant losses,” according to Alan Buerger, Coventry’s chief executive.
“We would, of course, deny those claims,” says Anthony Falisi, Examination Management’s attorney.
Examination Management has been providing life expectancy evaluations for only a few years, and that service makes up less than 1% of its total business, Falisi says.
“Because EMSI has only been offering this service for a couple of years, there’s insufficient data regarding the number of actual deaths to assess the accuracy of EMSI’s evaluations,” Falisi says.
But Falisi adds that EMSI’s life expectancy evaluation standards are reviewed regularly by independent entities and that those standards are consistent with the standards used throughout the industry.