{"id":5142,"date":"2011-04-26T00:00:00","date_gmt":"2011-04-26T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/04\/aig_trying_to_get_more_investo"},"modified":"2022-04-04T13:15:25","modified_gmt":"2022-04-04T18:15:25","slug":"aig-trying-to-get-more-investo","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/aig-trying-to-get-more-investo\/","title":{"rendered":"AIG Trying to Get More Investors to Buy Life Settlements"},"content":{"rendered":"

American International Group Inc. (AIG) is trying to get credit-ratings firms and investors to get behind the sale of life settlements, which are securities backed by the life insurance polices of older people. Per the insurer\u2019s recent proposal, a subsidiary of AIG\u2019s Chartis property casualty unit would collateralize notes valued at $900 million with 1,157 policies. AIG would like to sell $250 million to outside investors. <\/p>\n

So far, AIG\u2019s efforts have been met with resistance. It doesn\u2019t help that Standard & Poor\u2019s won\u2019t rate the securities, which could help rally investors. In fact, S & P\u2019s March report emphasizes the securities \u201cunique risks.\u201d It doesn’t help that some critics call these securities “collateralized death obligations,\u201d \u201cblood pools,\u201d or \u201cdeath bonds\u201d because they pay off upon the insured\u2019s death. <\/p>\n

Investors who buy life settlements are betting that the benefits they get upon the insured\u2019s death will be greater than the cash they\u2019ve paid for both the policy and its premiums. However, due to the 2008 credit crisis or because some of the insured ended up living longer than expected, many life settlement investors have lost money on these securities. Securities lawsuits have followed and the market has stayed depressed. AIG says that as of the end of 2010, it has paid over $177.8 million to settle 479 claims. In exchange, it received the policies. Per AIG\u2019s financial filings, the insurer has about $18 billion in anticipated death benefits. That\u2019s more than 1\/3rd of the approximately $45 billion in these benefits that have changed hands in the last decade.<\/p>\n

The Wall Street Journal reports that generally, life insurers consider investor ownership of policies\u2014especially involving those betting on someone\u2019s death\u2014as not good for the industry. There are even some insurance companies that have gone to court claiming that they were misled buy buyers who said they wanted policies for estate planning when, in fact, they actually wanted to flip them for investors. <\/p>\n

Our institutional investment fraud law firm<\/a> are dedicated to helping investors recoup their losses.<\/p>\n

AIG Tries to Sell Death-Bet Securities<\/a>, The Wall Street Journal, April 22, 2011<\/p>\n

Seniors Beware: What you should know about life settlements<\/a>, FINRA<\/p>\n

Life Settlement Securitizations Present Unique Risks<\/a>, Standard and Poor’s<\/p>\n

\nMore Blog Posts: <\/strong>
\nTexas Lawyer Pleads Guilty to Involvement in Alleged $100M Life Settlement Scheme<\/a>, Stockbroker Fraud Blog, December 7, 2010<\/p>\n

Life Settlements or Viaticals should be Considered \u201cSecurities,\u201d Recommends the SEC to Congress<\/a>\u2028, Stockbroker Fraud Blog, August 5, 2010<\/p>\n

Securitization of Life Insurance Settlements Might Lead to Next Financial Crisis, Say Lawmakers<\/a>, Stockbroker Fraud Blog, September 27, 2009<\/p>\n

\n<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

American International Group Inc. (AIG) is trying to get credit-ratings firms and investors to get behind the sale of life settlements, which are securities backed by the life insurance polices of older people. Per the insurer\u2019s recent proposal, a subsidiary of AIG\u2019s Chartis property casualty unit would collateralize notes valued at $900 million with 1,157 […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3987,3939],"tags":[],"class_list":["post-5142","post","type-post","status-publish","format-standard","hentry","category-american-international-group","category-life-settlements"],"yoast_head":"\nAIG Trying to Get More Investors to Buy Life Settlements — Investor Lawyers Blog — April 26, 2011<\/title>\n<meta name=\"description\" content=\"American International Group Inc. 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