The head of the U.S. Securities and Exchange Commission has set up an internal task force to look into the life settlement business.
SEC Chairman Mary Schapiro formed a multidisciplinary team in August “to examine emerging issues in the life settlements market,” says SEC spokesman John Nester.
Among issues to be studied are sales practices, privacy rights, disclosure issues and the role of securitization in the industry, Nester says.
“In addition, the task force will engage in outreach efforts with fellow securities and insurance regulators to coordinate regulatory efforts and analyze whether gaps in oversight [of the life settlement industry] exist,” Nester says.
In a speech last year, while Schapiro was chief executive of the Financial Industry Regulatory Authority, Washington, she identified the rise of life settlements as one of a number of “troubling trends” stemming from the economic crisis–along with the increase in use of reverse mortgages and accounts of investors prematurely tapping their retirement savings.