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Rating Agency Calls For More Life Settlement Industry Disclosure

By Staff Writer

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Scope Advisory GmbH. says it has developed a new approach for rating the soundness of life settlement funding companies and life settlement brokers.[@@]

Scope, Berlin, says it now uses a 3-part process to assess fiduciary risk.

Analysts at the firm will look at the business strategy, performance and other characteristics of a company under review; the company’s managers and management processes; and the company’s monitoring processes, due diligence processes and other processes for controlling fiduciary risk.

In the past, Scope focused mainly on the quality of life settlement industry companies’ business processes and other processes.

“It is necessary for the market-relevant companies to strengthen their fiduciary quality and also to accommodate best practice standards,” Moritz Roever, a Scope managing director, says in a statement about the new standards. “Due to its relatively short history and large number of market participants, the U.S. secondary market for life insurance is marked by a lack of transparency and partially inefficient structures.”

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