Over the years we have noted many recurring questions about the market, our fund, and our investment management skills.
We have compiled many of these questions right here for your convenience but if you don’t come across the question you want answered or your need further clarification please contact us.
The Asset Class
How large is the life settlements industry in the USA?
In the recent report published by Conning it is estimated the following
"The cumulative face amount of in force life settlements policies, which are policies still in force with insurers owned by life settlements investors, which was unchanged in 2012 at approximately $34.8 Billion"
(Life Settlements A New Opportunity in Smaller Policies, Conning, 2013, pp 19)
Investing in Life Settlements
Why invest in Life Settlement Policies?
The investment manager offers sourcing, selection and management of high quality, low risk assets housed in structures most appropriate to individual client needs.
The returns from Life Policy investments (through Life Settlements) are generally not correlated with other investment markets (see below).
- Uncorrelated returns - This means that the performance of the Life Policies will be based on the characteristics of the pool of the insured lives, and not on the performance of traditional markets, such as the stock market, the property market and the interest rate market.
- Lower volatility of returns
- Benefit amount assured - This means the benefit payable on each policy is contractually fixed at the time of purchase.
- Sizeable and growing asset class: Please refer to Conning Inc Life Settlements publications
- Potential for higher returns: Please refer to Conning Inc Life Settlements publications
- Improved mortality data accuracy: Please refer to Conning Inc Life Settlements publications
- Non-contestability - The Fund only purchases Life Policies that have a non-contestability provision. Normally the Contestability Period is the first 2 years that the policy is in force, so we don’t buy policies until it has passed that time.
- Increased Regulation - adding to strength and stability in the industry.
- Strength of the underlying asset is highly rated
- The risk of life extension in individual policies can be mitigated - by owning an actuarially significant portfolio of policies.
For a full explanation of the benefits and risks of investing in the Fund please phone at +61 7 5557 4700 or alternatively complete the contact form.
How does the manager approach liquidity provision in its funds?
Life settlement portfolios generally require liquidity to meet premiums and expenses. Failure to meet these will result in a loss of value because policies will lapse.
Liquidity provision is therefore the key to the successful operation of our life settlements fund.
For further elaboration on liquidity provisions with in the Global Insurance Settlements Funds PLC please contact the investment manager using the contact form.
What should I do if I am considering an investment?
The GIS General Fund is more appropriate for institutional & sophisticated investors to invest into.
Alternatively if you are looking at a large scale investment we can discuss the option of a separate mandate catered specifically to your needs.
By learning about your intentions for investing in the asset class we would be better able to understand how to move forward with your objectives.
For further information on how to invest please contact the investment manager using the contact form.
Where are the funds regulated?
Global Insurance Settlements Funds PLC, incorporated in Ireland (number 489049) as an umbrella type investment company with segregated liability between sub-funds authorised pursuant to Part XIII of the Companies Act 1990. Authorised by the Central Bank of Ireland as a Qualifying Investor Fund (“QIF”) under Part XIII of the Companies Act 1990 on 4 November 2011. The QIF is the most flexible type of regulated fund structure in Ireland. The GIS General Fund is one of the suite of products offered by Global Insurance Settlements Funds PLC.
Life Settlements Wholesale Fund is a registered managed investment scheme (ARSN 110 346 695) operated as an open-ended unit trust under the regulatory control of the Australian Securities & Investment Commission. The responsible entity of Life Settlements Wholesale Fund is GI Asset Management Limited AFSL 432510.
If you wish to learn more about the regulation environment of the funds please contact the investment manager using the contact form.
Where is the manager regulated?
The Fund Manager is is an Australian public company limited by shares and was incorporated on 12 June 2002. It holds Australian Financial Services Licence Number 432510..
Its operates under a first world regulatory scheme, more compliant and accountable than many funds in this industry, which puts the manager in a class of its own in terms of compliance and accountability.
If you wish to learn more about the regulation environment of the manager please contact the investment manager using the contact form.
What are the returns on investment?
Investors can expect returns from investing in this asset will take either one or both of two forms:
- Any variable movements in the Unit/Share Price (possibly both positive and negative), which would be realised by an Investor on any redemption by them of Units/Shares held. Movements in the Unit/Share Price are based on regular revaluations of the investments in a Fund (in particular the Life Policies owned by a Fund).
- Payment of variable cash distributions from any Net Income of a Fund, which is derived from net profit on matured policies, net profit from sale of policies and any other incidental income from other cash-based investments.
A Fund will pay a distribution from maturities, when available, and unit/share holders can choose to receive or reinvest these distributions (dependent on the vehicle invested in).
Each Fund can calculate the value of the units/shares at any time and will revalue the units/shares at least monthly.
If you wish to learn more about the potential returns for this investment please contact the investment manager using the contact form.
How are policies valued?
If you wish to discuss varying LE and Valuation techniques which may affect your life settlements investment, we would be more than happy to outline a best practise approach to suite your needs. We have used a number of the best recognized LE underwriters over the years and have determined those that they believe to be the best in terms of consistency of life estimates over time.
For further elaboration how policies are valued with in the Global Insurance Settlements Funds PLC please contact the investment manager using the contact form.
What skills does the Fund Manager use in portfolio construction?
The portfolio construction for clients of the fund, has been managed by applying disciplined fund management techniques in addition to rigorous asset selection and due diligence processes only an experienced asset class player can provide. The single focus in this asset class, over a long period of time, has ensured that they have delivered to their clients a level of expertise at the highest level.
For further elaboration on portfolio construction of the Global Insurance Settlements Funds PLC please contact the investment manager using the contact form.
Is the GIS General Fund Tax Efficient?
The GIS General Fund is one of the suite of products offered by Global Insurance Settlements Funds PLC. This Irish Umbrella QIF structure takes advantage of the tax clarity in Ireland, enabling us to develop the most appropriate structure for each investor.
For further elaboration the tax efficiency of the Global Insurance Settlements Funds PLC please contact the investment manager using the contact form.
How does the manager handle the perceived investment risks of the asset class?
Two of the greatest challenges of institutional buyers, in the life settlement marketplace, are disciplined acquisitions and then managing the policies after they are purchased.
We offer the technical analysis and disciplined processes of a provider blended with the oversight and experience of a Fund Manager operating in a regulated environment. The combination of this industry expertise in-house is unique in giving the Investment Manager the skills necessary to properly manage policies, particularly in the highly compliance driven environment of an institutional investor.
We use a number of tools to address the primary risk factors associated with this asset class. Using these tools, the Investment Manager is able to minimize this risk and other policy-related risks while protecting the inherent value of life settlements as a non-correlated investment.
For further elaboration on risk management please contact the investment manager using the contact form.
How does the manager approach the operational risk within life settlements?
Investor comfort and security is paramount, so we only deal with blue-chip service providers and are domiciled in a regulated jurisdiction. The fund manager employs top tier accounting and audit firms, custodians and legal service providers.
As a result of the extensive due diligence procedures and quality operational behavior, the Group has never failed to collect a policy benefit that has become payable and has never allowed for a policy to lapse. The strength and safety of the process is based on a wealth of experience developed over time and the use of independent and financially strong service providers to oversee and carry out the process.
If you wish to discuss how we handle operational risks please contact the investment manager using the contact form.
Do you purchase Australian or other locality life insurance policies?
The Fund will source only USA life policies from appropriately licensed Life Settlement Brokers /Providers.
We only consider USA life policies in the secondary market due to higher regulation and transparency of the USA asset compared to other localities.
What if we have additional questions?
For additional questions or information, please the investment manager at +61 7 5557 4700 or alternatively please contact the investment manager using the contact form.
We hope you have found this information helpful. We look forward to hearing from you.