U.S. House Financial Services Subcommittee Discusses Recent Securitization Innovations Related to Life Insurance

The United States House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises recently held a hearing entitled “Recent Innovations in Securitization.”  Innovations in the U.S. securities markets, especially those related to life insurance settlements, were examined, as well as the ways in which the federal government can provide protection for consumers that invest in life insurance products and safeguards for those who sell their life insurance policies.

Iowa Insurance Commissioner and National Association of Insurance Commissioners Vice President Susan Voss testified that “As banking interests purchase more and more life insurance settlements with the intent of combining them into securities products, there is an abject need for federal securities regulators to work together.”

In relation to the rights of individual investors, Ms. Voss also stated that “Securities regulators must be cognizant of how their enforcement actions could affect the structure and value of the underlying insurance products.”

A list of witnesses and corresponding hyperlinks to their testimony is reprinted below.  An archived webcast of this hearing is available by clicking here.

Witness List

• Paula Dubberly, Associate Director, Division of Corporation Finance, U.S. Securities and Exchange Commission
• Susan E. Voss, Commissioner, Iowa Department of Insurance on behalf of the National Association of Insurance Commissioners
• J. Russel Dorsett, Co-Managing Director of Veris Settlement Partners on behalf of the Life Insurance Settlement Association
• Brian Pardo, Chief Executive Officer, Life Partners Holdings, Inc.
• Jack Kelly, Director of Government Relations, Institutional Life Markets Association
• Kurt Gearhart, Global Head of Regulatory and Execution Risk, Life Finance Group, Credit Suisse
• Steven H. Strongin, Managing Director and Head of Global Investment Research, Goldman, Sachs and Company
• Daniel Curry, President, DBRS, Inc.

To view the opening statement by U.S. House Financial Services Subcommittee Chairman Paul E. Kanjorski cited the issue of investors having already gained access to other securities products like life settlement funds, mortality indexes and derivatives linked to life settlements—many of which are toxic.  To read Chairman Kanjorski’s statement, click here.

Should you have any questions or comments, please contact Colodny Fass.

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