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Life settlement industry warned about “carpet baggers”

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Scott Page, president and chief executive of The Lifeline Program, has warned of a “carpet-bagger” mentality that could be troublesome for the life insurance settlement industry.

Page says that an increasing number of operators are rushing into the industry and promising unrealistic and untenable returns.

“As the industry reaches a new level of acceptance among institutional investors, we are seeing a flood of companies looking for, and promising, a quick score,” says Page. “As an industry, we need to continue to be proponents of long-term, transparent investments; otherwise we are moving forward at our own peril.”

Life settlements are quickly gaining in popularity as an asset class among institutional investors. According to Page, investments correlated to the stock market have taken a major hit in the past few years, but life settlements are now an attractive emerging alternative investment option due to their non-correlated nature.

High profile media coverage has focused a tremendous amount of attention on the industry, particularly the prospects for securitization of portfolios of policies. While Page states that his company is seeing increased interest from mainstream funding sources, he also is fielding calls from a number of organisations with quick-strike and “borderline unscrupulous” aspirations.

“The opportunity exists for our industry to reach new heights and deliver incredible value to investors,” says Page. “But we need to police our industry so that we grow not just profitably, but properly.”

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