The American Council of Life Insurers is speaking out against the securitization of life settlements.
The group recently said that securitization would encourage those set on developing a secondary market to lure older Americans to sell their life insurance policies, even when it wasn't the best available strategy.
In addition, the ACLI said that carriers are concerned that securitization would lead to an increase stranger-oriented life insurance practices. "Investors in life settlement securitizations will have no hard assets as security for the inevitable default and fraud losses that attach to these investments with alarming regularity," they said.
The ACLI also noted that securitization puts life settlement investors at risk, especially for those who live longer lives.