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October 22, 2009 at 08:00 PM
The head of the U.S. Securities and Exchange Commission says she wants to take a closer look at the life settlement business.
“Unfortunately, many seniors may not fully appreciate the implications of selling their life insurance policy to someone who is purchasing it for investment purposes,” SEC Chairman Mary Schapiro said today at the Solutions Forum on Fraud, which was sponsored by an institute connected with the American Association of Retired Persons, Washington, and the National Consumers League, Washington.
“It is possible that seniors may lose the ability to obtain life insurance in the future, that they may lose certain tax benefits and that they may find that certain personal information about their health is being shared with or monitored by strangers,” Schapiro said during a wide-ranging talk, according to a written version of her remarks posted on the SEC website.
“On the other side of the transaction, investors may not have a complete understanding of the investment risks associated with a life settlement policy, including the risks related to the health and life expectancy of the insured,” Schapiro said.
The SEC also will be investigating the marketing of retirement investments in general, she said.
“America’s future retirees deserve products that they can understand and evaluate,” Schapiro said. “This means that complex fee arrangements or product descriptions should be discarded in favor of simple, clear disclosure. Our future retirees should have access to products that will help them meet their retirement goals without imposing inappropriate risks.”
