The Institutional Life Markets Association wants to make sure that consumers understand how much they are paying the intermediaries who help them sell life policies through the secondary market.
ILMA, New York, has released a standard life settlement broker compensation disclosure statement form.
The form will list the face amount of the policy sold, the estimated cash surrender value, the gross sales price, the amount of broker compensation, and the net amount of cash that the seller would get from the sale.
ILMA members have agreed to require use of the form in the transactions they handle starting Jan. 1, 2008.
“A robust, competitive and liquid market must be built on a foundation of consumer choice and transparency,” says ILMA spokesman Jack Kelly. “Consumers have a right to know exactly how much their life insurance policy is worth in the secondary market and how much their brokers will earn in commissions.”
Members of ILMA, which represents institutions that invest in life settlements, include companies such as Bear Stearns & Company Inc., New York, and UBS A.G., Zurich.