Life Accumulation and Life Settlement Programs
Sidley regularly provides counsel to commercial banks, insurance companies, investment banks, hedge funds and other financiers in connection with the structuring and development of life settlement, life insurance and annuity accumulation and structured premium finance programs. These programs focus on the inherent investment characteristics associated with traditional life insurance and annuity products and are designed to provide investors with an economic return tied to the underlying mortality and credit-based risk exposure. In connection with these programs, we have considered all of the various legal and regulatory issues, including those related to insurable interest, contestability, commission sharing, rebating/unfair trade practices, privacy laws, choice of law, premium finance, tax, consumer finance laws, usury and life settlement laws. In representing our clients in connection with these programs, we often call upon the resources of experienced lawyers throughout our U.S. and international offices in a variety of complementary practice areas, including Tax, Corporate Finance and Securities, Securitization and Structured Finance, Litigation, Healthcare and Financial Institutions Regulatory.
Our experience in this area includes structuring, documenting and/or providing other legal services with respect to:
- The establishment of efficient vehicles for the purchase, financing and securitization of life settlements, fixed annuities and variable annuities;
- Origination, financing and servicing agreements with licensed life settlement providers and other industry participants;
- Life settlement and annuity arbitrage/pairing programs;
- Recourse and non-recourse premium finance programs;
- Equity/participation-based life insurance accumulation programs;
- Synthetic life settlement transactions, through the use of derivatives;
- The development of distinct forms of adverse mortality and performance protection products, including contestability insurance policies, life expectancy hedging transactions and residual value insurance policies;
- Asset-based lending transactions involving life settlements and premium finance arrangements;
- Private equity/M&A strategic joint venture transactions with industry participants; and
- Acquisitions and dispositions of life settlement portfolios, including purchasing portfolios from bankruptcy estates.