Phoenix Life Insurance Company may open its life settlement business in the next 3 weeks.
The business, Phoenix Life Solutions, is in the process of negotiating distribution agreements with 4 brokerage general agencies, Christopher Macklem said here today at an investment symposium organized by the Society of Actuaries, Schaumburg, Ill.
Macklem is an actuary at Phoenix, a unit of the Phoenix Companies Inc., Hartford.
Phoenix Companies first announced the formation of the life settlements subsidiary in September 2007.
Phoenix Life Solutions will work with “very large face amount policies,” both from Phoenix and from other insurers, Macklem said.
The maximum commission will be 20% of the value created in the settlement of a policy, and the provider fee will be 5% of the valued created, Macklem added.
The maximum commission and the provider fee both will be about half the typical levels, Macklem estimated.
Macklem reported that Phoenix has decided against forming joint ventures with potential partners such as a medical underwriting company or a life settlement distributor.
Instead, Phoenix will be building its own life settlement capabilities, Macklem said.
During a panel discussion, Macklem:
- Conceded that acting as both a life insurer and a life settlement company could lead to pressure on Phoenix to increase policy cash surrender values.