By Allison Bell
New York
The Viatical and Life Settlement Association of America didn't need an inspirational keynote speaker to generate interest here at its latest conference.
The 325 conference participants packed into the meeting room to hear top industry executives give them ideas about where their rapidly changing industry might be heading.
The participant list included several representatives from a German investment bank along with representatives from institutional investment firms, rating agencies and professional services firms that are starting to take note of the life insurance policy resale industry.
Although some life insurance company executives continue to criticize the life settlement industry, some of the participants came from life insurance companies.
One of the VLSAA's board members, Ramiro Rencurrell, works for the life settlement division at Magna Administrative Services Inc., Coral Gables, Fla., which is an affiliate of BMI Financial Group Inc., Coral Gables, a life and health insurance company.
Magna started investing in life settlements in 2002 and became a provider in 2004, Rencurrell said.
Getting into the life settlement market makes good sense for a life insurer, he said.
Life settlement investment returns are good, and the existence of the market is good for the consumer, he added.
"We think that producers have a responsibility to the consumer to present them with every option before the lapse of their policies," Rencurrell said.
One challenge life settlement companies face is finding policies that are right for the secondary market: The companies are looking mainly for policies with face values of $250,000 and higher sold to insureds with life expectancies of about 2 to 10 years.
In the future, if life insurers increase standard life policy cash surrender values, "we won't have the same opportunities," said Alan Buerger, chief executive of Coventry First L.L.C., Fort Washington, Pa., a large life settlement company.
