It's been a while since we've discussed a certain variation on the "Stranger Owned Life Insurance" phenomenon. Last time we looked, the (dubious) folks at Life Partners were winding down their little scheme (or so it seemed, anyway), and there hasn't really been much news on that front.
Regular readers may recall that the whole idea behind this concept is that a 3rd party buys a life insurance policy on or from a terminally-ill person, betting that the insured will die before too many premium payments have been made. There are more than a few variations on this tune, and it's in somewhat of a gray area of the biz.
The latest eruption is this little kerfluffle between AIG (not the most ethics-bound carrier to begin with) and a little outfit called Coventry First (which bills itself as "the leader and creator of the life settlement industry"). Seems that Coventry's been accused by AIG of a sort of "pump and dump" of life policies, which left AIG with a bit of a loss.
And by "bit of a loss" I mean $150 million.
Ouch.
So, one thing lead to another, and now both parties are in court:
"Coventry First LLC illegally marked up prices on hundreds of investments that bet on when people would die, an American International Group Inc. unit said at the start of a fraud trial in New York."
For its part, Coventry refutes the characterization, saying that "its pricing practices with AIG were transparent, and that the allegations are nonsense."
Obviously, they can't both be right.
Frankly, I'm with Secretary Kissinger on this one.
Regular readers may recall that the whole idea behind this concept is that a 3rd party buys a life insurance policy on or from a terminally-ill person, betting that the insured will die before too many premium payments have been made. There are more than a few variations on this tune, and it's in somewhat of a gray area of the biz.
The latest eruption is this little kerfluffle between AIG (not the most ethics-bound carrier to begin with) and a little outfit called Coventry First (which bills itself as "the leader and creator of the life settlement industry"). Seems that Coventry's been accused by AIG of a sort of "pump and dump" of life policies, which left AIG with a bit of a loss.
And by "bit of a loss" I mean $150 million.
Ouch.
So, one thing lead to another, and now both parties are in court:
"Coventry First LLC illegally marked up prices on hundreds of investments that bet on when people would die, an American International Group Inc. unit said at the start of a fraud trial in New York."
For its part, Coventry refutes the characterization, saying that "its pricing practices with AIG were transparent, and that the allegations are nonsense."
Obviously, they can't both be right.
Frankly, I'm with Secretary Kissinger on this one.
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