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.

“We are concerned that some investors may be risking their most valuable assets in an effort to raise cash–including those in or near retirement, who may not have time to recover their losses,” Schapiro said at the time.

In April, after Schapiro took over as head of the SEC, she promised Sen. Herbert Kohl, D.-Wisc., chairman of the Senate Special Committee on Aging, that she would look into the life settlement industry.

Kohl has released a statement welcoming the formation of the SEC life settlements task force.

“There’s still so much we need to know about this burgeoning industry, and I’m grateful to the SEC for stepping up,” Kohl says. “My hope is that the new task force will determine that greater regulation by the agency is necessary for life settlement providers and brokers.”

Earlier this week, Rep. Paul Kanjorski, D-Pa., chairman of the capital markets subcommittee of the House Financial Services Committee, said the subcommittee would hold a hearing on the life settlement securitization process Sept. 24.