An interview with Chris Orestis, President of Life Care Funding Group
Chris Orestis, president of Life Care Funding Group, is a 15 year veteran of the insurance and long term care industries. Over the course of ten years in Washington, D.C. he worked in senior positions for the Health Insurance Association of America (HIAA--now reconstituted as AHIP), and for the American Council of Life Insurers (ACLI). His first professional exposure to the life settlement market came in 2005. Since 2007, Life Care Funding Group has been working exclusively with some of the largest national chains of nursing homes and assisted living properties across the United States. These companies have been informing families about a life settlement as a funding option if their loved one owns a life insurance policy that they are planning to surrender or lapse. Life Care Funding Group then works directly with the family to educate them about the process and represent them if they decide to pursue a life settlement for their policy.
Q: How did you first decide to work with the “Senior Living” industry?
A: I have been involved in the “Senior Living” industry for most of my adult life. The need for private sector solutions to combat the growing long term care funding crisis has been building for years now. The Baby Boomers are now hitting the system and they are unprepared financially to handle the costs. It was very obvious to us and the “Senior Living” industry that the proceeds from a life settlement could be put to very good use helping seniors secure the best possible housing and/or long term care.
Q: How many Senior Living companies are you working with?
A: Life Care Funding Group works with close to 100 companies of various sizes using our “Funding Solutions for Senior Living” program. Together these companies have over 2,500 facilities with an average occupancy of 100 or more beds.
Q: What is the typical profile of the policy holder you would encounter?
A: The vast majority of policy holders we encounter would not be considered high net worth. These are people with policy sizes under $500,000 and who have owned their policies for 10-20 years. They have reached a point in their lives where they have a pressing health care issue and are discovering that the costs associated with long term care are beyond their means. Typically they are about to either surrender or lapse their policy and had no idea that a life settlement is a much better alternative.
Q: How has the life settlement market responded to “middle market” policy holders?
A: We actually have been surprised to discover that the majority of Providers are not interested in middle market policy holders. These “funders” would rather deal with much larger policies and are not that interested in smaller face policies even though the market size is enormous. We have found it takes private funders that want to specifically focus on this market and the unique aspects of underwriting seniors in “Senior Living” environments to make it work.
Q: What are some of the challenges you encounter working in this environment?
A: Other than the general lack of interest in small face policies by traditional Providers, we have found that it takes a great deal of work and systems to support such a large cross section of facilities. We have also found that the current lack of electronic medical records (EMR) across the health care system causes big delays in underwriting, but we are encouraged to see adoption picking up in the health care industry in concert with stimulus dollars made available through TARP.
Q: Are there other ways to help seniors in this circumstance with their finances?
A: Yes, life settlements are not the only approach. We emphasize that families understand all of their funding options and also educate them on things such as policy loan programs, the VA Aid and Attendance health care benefit, senior credit programs, reverse mortgages, and long term care insurance. We also make sure they understand how Medicaid and Medicare work in the total picture.
Q: The life settlement industry tends to get a bad rap, what has been the reaction to your approach?
A: We have been very pleased to see the favorable coverage we have received in the press and also in state capitols. There have been numerous stories written about our approach and we were also gratified to see states such as Maine, Washington and Oregon enact legislation forbidding the insurance industry from suppressing information about the life settlement option for seniors.
Q: What does this “convergence” potentially mean for the future of the life settlement industry?
A: We believe this growing convergence is positive for the industry from a couple of perspectives. First, life settlements are being used for a positive purpose by helping seniors cover the costs of long term care. The industry is well served to show that life settlements can be done for reasons beyond just profit. Also, it is an opportunity for state Medicaid programs to reduce expenditures by prolonging spend down periods for seniors before qualifying for coverage. Lastly, it is an opportunity to tap into a massive market that so far has been ignored by the industry.
Q: How do you see today’s market conditions for the life settlement industry?
A: There is no doubt that the impact of the economic crisis made the second half of 2008 and 2009 tough for the industry. Although we don’t necessarily participate in the traditional life settlement marketplace, it appears to us that funding is coming back into the secondary market and a real recovery could be in swing by summer. The industry is going to need to find new sources of policies now that the world of STOLI has just about been brought to an end.
Q: What are your opinions about the regulatory environment for the life settlement industry?
A: We are in total agreement with LISA and ACLI that there is no place for STOLI based transactions and we applaud their efforts to bring it to an end. As legislation has been enacted across the country we have seen a consistent recognition that life settlements of policies established for reasons of true insurable interest are not being impeded. For people with a pressing reason for liquidity, such as the population we serve, it would not be fair and in fact a violation of constitutional law to put up artificial barriers impeding peoples’ ability to access the value of their personal property.
Q: There has been a lot of talk about securitization and the possibility that it could lead to another economic crisis like the sub-prime mortgage debacle. Do you see that as likely?
A: We see that more as an interesting story to sell newspapers or as fodder for groups that want to use misinformation to impede people’s access to the secondary market than as a likely outcome. At some point the successful securitization and trading of life settlement pools is quite possible. But the idea that this niche market could undermine one of the world’s largest industries and the U.S. economy is at the vey least disingenuous hyperbole being used to serve other purposes.
Q: What are your predictions for where the market could be in five or ten years?
A: The market should continue to grow if for no other reason than the aging Baby Boom population is in bad financial shape and looking for every possible outlet to find liquidity. Securitizations could help fuel that growth, but not to cataclysmic levels. We believe that a bigger growth driver could come from state governments that realize life settlements could save their budgets millions if not billions of dollars by extending spend down periods for seniors with policies. Another area of activity that has started gaining traction in the last few months is the use of life settlement portfolios as a collateral instrument for commercial loans. We also believe the public perception of the industry will improve due to regulatory actions, the ongoing exit of questionable characters looking for the next gold rush, and the growth of life settlements being used for positive purposes such as funding the costs of lo
Monday, November 8, 2010
Demand for Long Term Care Services Increasing
There are over 60,000 assisted living and nursing home properties throughout the Untied States. More than 2,000,000 people reside in these properties, but over the last ten years the differences between assisted living and skilled nursing have become less distinct. There are a number of contributing factors to consider: pressure on Medicare and Medicaid budgets, private pay services such as Alzheimer’s care, personal tastes of the aging Baby Boomers, and the economics of the facilities themselves.
Assisted Living facilities have increased the level of service and care provided to be more competitive, and Nursing Homes have added private pay services and higher end living arrangements to be more competitive as well. The Baby Boomers are driving much of this evolution because they are a more affluent cohort than generations past, and their lifestyle expectations are very high.
The annual MetLife Mature Markets study released in 2009 highlighted the continuing increase in the costs of senior housing and care. The national average cost of staying in a semi-private room in a nursing home grew from $189 per day / $68,985 annually in 2007 to $191 per day / $69,715 annually in 2008. The national average cost of living in an assisted living facility grew from $2,969 per month / $35,628 annually in 2007 to $3,031 per month / $36,372 annually in 2008.
As the growing population of Baby Boomers and seniors hits in concert with a shrinking economy, the pressure on the federal budget to support entitlement programs such as Social Security and Medicare and on state budgets to fund Medicaid programs is creating push back on citizens to carry more of the load.
Medicaid pays the vast majority of costs associated with the almost 1.5 million people receiving housing and long term care in skilled nursing facilities. Medicaid is now moving in the direction of operating more like health insurance and by charging premiums will deflect a portion of the costs back on the individual. And by charging higher co-pays, they hope to motivate people to be more cost conscious when spending Medicaid dollars. Each state runs its own Medicaid program and will have discretion to set premium and co-pay amounts as they wish.
A report tracking Medicaid spending going back over the last seven years showed that Medicaid underfunded payments for services to all patients by $14.17 everyday in 2009. Projections are that this alarming underfunding trend will get worse in 2010 and 2011. The economic crisis has robbed state budgets of funds available to support Medicaid funded programs and as a result there was a national deficit of almost $5 billion.
Medicaid funds at least 2/3 of all spending for nursing home care. Spending shortfalls of this magnitude threaten the ability of nursing homes to offer the highest levels of care for the most vulnerable populations. Frustratingly for nursing homes and those in their care, state governments were given money in 2009 via the American Recovery and Reinvestment Act to make up this deficit. But guess what—governments diverted the money away from providing the healthcare it was intended, and instead used the money to shore up their own budget deficits.
As readers of the Life Care Funding BLOG know, we continue to bring awareness to the unavoidable trend of reducing the amounts of money that are available for Medicare and Medicaid. And why is that? Because we are now in the throes of an explosion of Baby Boomers reaching retirement age at the same time that our country’s economy is under siege and entering unfamiliar territory. Washington, DC and 50 state capitols have no choice but to figure out how to make do with less.
They have two tools to work with:
1. Make it harder for people to qualify for Medicare and Medicaid, and--
2. Reduce what is available for those that do qualify.
What tools do seniors and their families have to work with?
1. Information
2. Time
People need to arm themselves with information about how the system works and what kind of funding options (and limitations) they have to work with. And, people need to stop waiting until the last minute to plan for their inevitable time in long term care. In one form or another, (home or facility based) as people age and/or become frail they will need someone to help care for them. That care will cost money and that money has to come from somewhere. As the government makes it harder and harder to access funding, people need to prepare to bear much of the financial burden on their own. To ensure quality of life and dignity when the time for long term care arrives; people must make the effort today to understand what kind of financial options are out there such as the VA Benefit, Life Insurance Settlements, Credit Programs, Reverse Mortgages, Long Term Care Insurance and other sources of private funding.
It is important that people understand these early warning signs of what is to come. Federal and state budgets can only accommodate so much, and when dollars are shrinking while populations are growing it becomes pretty simple math to see that something has to give. If history is our guide, then it will be the individual who ends up giving the most. For people to come even close to meeting their expectations for a high level of senior housing and care it will require a firm grasp of the various options available—and how to pay for it. Now is the time to prepare by understanding the funding options that are available to help cover these costs as they become more and more the responsibility of the individual.
Assisted Living facilities have increased the level of service and care provided to be more competitive, and Nursing Homes have added private pay services and higher end living arrangements to be more competitive as well. The Baby Boomers are driving much of this evolution because they are a more affluent cohort than generations past, and their lifestyle expectations are very high.
The annual MetLife Mature Markets study released in 2009 highlighted the continuing increase in the costs of senior housing and care. The national average cost of staying in a semi-private room in a nursing home grew from $189 per day / $68,985 annually in 2007 to $191 per day / $69,715 annually in 2008. The national average cost of living in an assisted living facility grew from $2,969 per month / $35,628 annually in 2007 to $3,031 per month / $36,372 annually in 2008.
As the growing population of Baby Boomers and seniors hits in concert with a shrinking economy, the pressure on the federal budget to support entitlement programs such as Social Security and Medicare and on state budgets to fund Medicaid programs is creating push back on citizens to carry more of the load.
Medicaid pays the vast majority of costs associated with the almost 1.5 million people receiving housing and long term care in skilled nursing facilities. Medicaid is now moving in the direction of operating more like health insurance and by charging premiums will deflect a portion of the costs back on the individual. And by charging higher co-pays, they hope to motivate people to be more cost conscious when spending Medicaid dollars. Each state runs its own Medicaid program and will have discretion to set premium and co-pay amounts as they wish.
A report tracking Medicaid spending going back over the last seven years showed that Medicaid underfunded payments for services to all patients by $14.17 everyday in 2009. Projections are that this alarming underfunding trend will get worse in 2010 and 2011. The economic crisis has robbed state budgets of funds available to support Medicaid funded programs and as a result there was a national deficit of almost $5 billion.
Medicaid funds at least 2/3 of all spending for nursing home care. Spending shortfalls of this magnitude threaten the ability of nursing homes to offer the highest levels of care for the most vulnerable populations. Frustratingly for nursing homes and those in their care, state governments were given money in 2009 via the American Recovery and Reinvestment Act to make up this deficit. But guess what—governments diverted the money away from providing the healthcare it was intended, and instead used the money to shore up their own budget deficits.
As readers of the Life Care Funding BLOG know, we continue to bring awareness to the unavoidable trend of reducing the amounts of money that are available for Medicare and Medicaid. And why is that? Because we are now in the throes of an explosion of Baby Boomers reaching retirement age at the same time that our country’s economy is under siege and entering unfamiliar territory. Washington, DC and 50 state capitols have no choice but to figure out how to make do with less.
They have two tools to work with:
1. Make it harder for people to qualify for Medicare and Medicaid, and--
2. Reduce what is available for those that do qualify.
What tools do seniors and their families have to work with?
1. Information
2. Time
People need to arm themselves with information about how the system works and what kind of funding options (and limitations) they have to work with. And, people need to stop waiting until the last minute to plan for their inevitable time in long term care. In one form or another, (home or facility based) as people age and/or become frail they will need someone to help care for them. That care will cost money and that money has to come from somewhere. As the government makes it harder and harder to access funding, people need to prepare to bear much of the financial burden on their own. To ensure quality of life and dignity when the time for long term care arrives; people must make the effort today to understand what kind of financial options are out there such as the VA Benefit, Life Insurance Settlements, Credit Programs, Reverse Mortgages, Long Term Care Insurance and other sources of private funding.
It is important that people understand these early warning signs of what is to come. Federal and state budgets can only accommodate so much, and when dollars are shrinking while populations are growing it becomes pretty simple math to see that something has to give. If history is our guide, then it will be the individual who ends up giving the most. For people to come even close to meeting their expectations for a high level of senior housing and care it will require a firm grasp of the various options available—and how to pay for it. Now is the time to prepare by understanding the funding options that are available to help cover these costs as they become more and more the responsibility of the individual.
Sunday, January 3, 2010
Electronic Medical Records: Resistance is Futile
Medical records are the life blood of any life or health underwriter. The collection and review of medical records is the most costly, time consuming, and frustratingly inconsistent necessity of underwriting. As the United States medical system begins making truly meaningful progress away from a paper based system to one based on the electronic storage and dissemination of medical records, the impact on underwriters will be transformational. As those familiar with Star Trek know, when the Borg assimilates another individual entity into their collective they proclaim, “Resistance is futile”!
Introduction
Efforts to move the medical system away from a paper based system to one predominantly operating on an electronic platform have been underway for years. The improvements such a system would have for costs, operations and outcomes are obvious but the transformation by hospitals and physicians has been slow. Over the last two decades, factors such as cost, legacy systems, generational reluctance, worries about technological obsolescence, and fear that systems will be underutilized have all contributed to the glacial pace of adoption. But, in the last 3-5 years the pace has begun to hasten. A number of factors are contribution to the increasing adoption of Electronic Medical Records (EMR) on a national level. The cost of technology has dropped dramatically and the internet has been a big factor as well. The generational divide has shrunk with a greater percentage of medical professionals use technology and the internet on a daily basis. Last but not least, the government has come to realize the benefits of adoption and has been instituting programs and incentives to open up the “mainstreaming” of EMR.
From Bits to Bytes
The logic behind EMR is undeniable. Moving from an analog to a digital world holds a host of benefits for every stakeholder in healthcare. The conversation has been going on since at least the 1960’s, and there are some very interesting (and even humorous) visions for the future in older papers that reminds me of a trip to Disneyland’s “World of Tomorrow” attraction when I was a kid. One of the biggest factors to the delay in making the transition is that until relatively recently the technology has not really been there. Most early attempts at adopting EMR were thwarted by the inability of systems from different vendors to communicate with each other. In an attempt to develop the dominant platform, technological silos were built trapping data within a system and would not allow for “interoperability” or transfer of data across different institutions and systems. Interoperability is a key factor to getting any value from EMR. In fact, the discussion now has moved beyond records and has really shifted to connectivity and communication between various participants in a healthcare value chain..
Another key driver of today’s advances for EMR is the internet. The true utility of the internet only emerged in the last five years. Ten and fifteen years ago the internet was still very much in its infancy. Most companies looked at the internet as a curious novelty where they might put up a website that was little more than an electronic brochure. But, sometime around 1999-2000, IBM coined the phrase “E-Commerce” and a shift in attitudes and utilization began. More marketing than reality at the onset, concepts such as “E-Health”, Tele-Medicine, Smart Cards, and Electronic Medical Records all began to take root. Companies such as Amazon, E-Bay, Apple, Google, YouTube and now the social networking phenomenon driven by Twitter and Facebook proved that the E-Commerce hype of ten years ago was actually quite prescient. Not only could business be conducted using the internet, but the internet had proven itself to be the platform to provide the three key elements that any successful EMR initiative must have: Functionality, Interoperability, and Security.
Meaningful Use
Technological capabilities and capacity have increased, costs have decreased and the internet has created the avenue through which meaningful utilization can occur, yet adoption continues to be the exception and not the rule. In a 2008 New England Journal of Medicine survey of 2,800 physicians only 4% reported having a fully functional EMR platform. What will it take for national adoption of EMR? As is the case with most things that we know are good for us, it will take both the stick and the carrot. In the American Recovery and Reinvestment Act of 2009, President Obama specifically included incentives and possible penalties to move adoption of EMR forward at a much faster pace. Individual physicians are eligible for $64,000 in subsidies and hospitals could receive up to $11 million for implementing an EMR program. Medicare and Medicaid certified providers could also face reimbursement penalties if they do not have a system in place. Specific deadlines are yet to be established, but compliance to receive subsidies or avoid penalties will hinge on systems that would meet the definition of “meaningful use”.
Although the final definition of meaningful use is yet to be agreed upon by the Health IT Standards Committee (a federally mandated body), they have published a quasi-mission statement for the concept: “Better healthcare does not come solely from adoption of technology itself but through the exchange and use of health information to best inform clinical decisions at the point of care.” What is enlightening about this statement is that it emphasizes the use and exchange of data as the key and not the technology itself. It is not the “what” that is important, but rather the “how and why”. This is why functionality, interoperability and security become the three critical elements to a successful EMR platform.
Exchange of data
In recent years Health Information Exchanges (HIE) and Regional Health Information Organizations (RHIO) have been developing around the country to empower secure transfer of medical information between participants across a chain of care. This would include hospitals (and their various departments), physicians and practice groups, specialists, and providers of long term care. It could also include labs, pharmacy, and supplies. HIE’s function day-to-day transferring medical records throughout a connected group of stakeholders. The RHIO is the governing body that sets the standards for the HIE to follow in a given region so that all stakeholders can benefit from participation. Following the mandate set by the Office of the National Coordinator for Health Information Technology to create a National Health Information Network (NIHN); RHIO’s establish the local level of interoperable connectivity that must be in place to create a nation wide network. There are almost 200 RHIO’ around the country at various stages of development and functionality with as many as 57 currently reporting that they are actively exchanging health records across a variety of approved participants.
“In the past, technology was too slow, too expensive, unconnected, and technology was too quickly outdated for any meaningful level of adoption and information exchange to happen”, says Dr. Faiz Fatteh, CEO of Soren Technology, “but now the costs are very low if not non-existent, speed and security of connectivity is finally here, and the emphasis now has moved way beyond simply transferring records from paper to digital files, and it is really now all about sharing data through use of an HIE platform connected via a geographically situated RHIO.”
One stakeholder in the process slow to be involved in the development of the NIHN is the insurance industry. When looking at the various RHIO’s in place around the country, the proverbial elephant in the room is the lack of insurance companies involved. Save for a few exceptions and its own failed attempt at creating a national exchange, the insurance industry has not been as actively involved as it should be. Will that change? It appears that with the efforts towards national healthcare reform being driven by incentives and mandates to finally get a national network in place, the insurance industry will be well served to be getting on board as well.
What’s in it for me?
Financial incentives have been targeted at the providers, but the insurance industry stands to benefit from at least three perspectives:
1) Improved underwriting -- Obviously medical records are the key tool used in underwriting life and health insurance. Easier access to the most up to date and comprehensive records on an applicant can only improve the underwriting process, pricing, and outcomes. Anything that can be done to reduce the time and costs involved in collecting medical records and ensure the records collected are complete, would very much be to the advantage of the insurance company and the applicant.
2) Reduced claims -- Underwriting is always the best defense from unnecessary claims. Better coordination of care and records will provide information to avoid duplicative and unneeded treatments, poor outcomes, missed conditions, and opportunities for fraud.
3) Competitive necessity -- As time progresses there will be more pressure from providers with an EMR capacity to submit claims through them and manage the process on their platform. Insurers not participating will find themselves at a disadvantage in the marketplace.
“As one the largest APS retrieval companies in the United States, we touch thousands of medical records every day”, explained Parameds.com CEO, Eli Rowe, “and we know from experience how difficult the task of obtaining records is. The vast majority of records we collect are sent to us as paper and then need to be sorted and scanned before we can deliver them to our clients. We have looked for a long time at what it will take for payers to be successful participants in the growth of EMR, and our work with life, health, DI and LTC insurers have shown us that payers are well situated to play a lead role.”
Because of the central role that underwriting and claims plays in the world of health care, all carriers are in a position to lead and benefit from the rapid adoption of EMR and growth of a national exchange capability. The benefits to health insurers on the claims side and life insurers on the underwriting side are obvious, but DI and LTC insurers will see great benefits on both of those fronts as well. At the end of the day, it is good public policy and good business to be actively involved and help shape the outcome of what is inevitable.
Conclusion
“Progress has, of course, been made in the development of electronic medical record systems (EMRS). Very little of the data that are routinely generated by computer-such as laboratory test results-are now lost to electronic accessibility, as they typically were twenty years ago, when the typical lab instrument would print its results on paper and discard the electronic version. Nevertheless, much of the information on which clinical care is based continues, in most institutions, not to be captured in electronically usable form. This includes the results of patient and family histories, physical examinations, doctors' and nurses' notes, etc.”
That observation on the state of EMR was not written within the last couple of years, it was written 15 years ago by Peter Szolovits from MIT’s Laboratory for Computer Science. How much progress has been made since 1995 when this was written depends on your point of view. Current studies still show actual adoption and use of an EMR system that would meet the definition of “meaningful use” to be very small (various estimates are 1%-4% of providers). Yet, technology and costs are now conducive to rapid adoption, government incentives are in place, standards and regional networks to foster HIE are emerging across the country, and a majority of consumers support the idea of collecting and exchanging electronic medical records with proper privacy and security measures in place.
Ten and fifteen years ago, it was a matter of if EMR could happen. Now it is just a matter of when. We will see more progress in this direction over the next 2-5 years than we have during the last 30. The insurance industry stands to benefit greatly from what is emerging and it is happening faster than you think. “Prepare to be assimilated--resistance is futile…”
Introduction
Efforts to move the medical system away from a paper based system to one predominantly operating on an electronic platform have been underway for years. The improvements such a system would have for costs, operations and outcomes are obvious but the transformation by hospitals and physicians has been slow. Over the last two decades, factors such as cost, legacy systems, generational reluctance, worries about technological obsolescence, and fear that systems will be underutilized have all contributed to the glacial pace of adoption. But, in the last 3-5 years the pace has begun to hasten. A number of factors are contribution to the increasing adoption of Electronic Medical Records (EMR) on a national level. The cost of technology has dropped dramatically and the internet has been a big factor as well. The generational divide has shrunk with a greater percentage of medical professionals use technology and the internet on a daily basis. Last but not least, the government has come to realize the benefits of adoption and has been instituting programs and incentives to open up the “mainstreaming” of EMR.
From Bits to Bytes
The logic behind EMR is undeniable. Moving from an analog to a digital world holds a host of benefits for every stakeholder in healthcare. The conversation has been going on since at least the 1960’s, and there are some very interesting (and even humorous) visions for the future in older papers that reminds me of a trip to Disneyland’s “World of Tomorrow” attraction when I was a kid. One of the biggest factors to the delay in making the transition is that until relatively recently the technology has not really been there. Most early attempts at adopting EMR were thwarted by the inability of systems from different vendors to communicate with each other. In an attempt to develop the dominant platform, technological silos were built trapping data within a system and would not allow for “interoperability” or transfer of data across different institutions and systems. Interoperability is a key factor to getting any value from EMR. In fact, the discussion now has moved beyond records and has really shifted to connectivity and communication between various participants in a healthcare value chain..
Another key driver of today’s advances for EMR is the internet. The true utility of the internet only emerged in the last five years. Ten and fifteen years ago the internet was still very much in its infancy. Most companies looked at the internet as a curious novelty where they might put up a website that was little more than an electronic brochure. But, sometime around 1999-2000, IBM coined the phrase “E-Commerce” and a shift in attitudes and utilization began. More marketing than reality at the onset, concepts such as “E-Health”, Tele-Medicine, Smart Cards, and Electronic Medical Records all began to take root. Companies such as Amazon, E-Bay, Apple, Google, YouTube and now the social networking phenomenon driven by Twitter and Facebook proved that the E-Commerce hype of ten years ago was actually quite prescient. Not only could business be conducted using the internet, but the internet had proven itself to be the platform to provide the three key elements that any successful EMR initiative must have: Functionality, Interoperability, and Security.
Meaningful Use
Technological capabilities and capacity have increased, costs have decreased and the internet has created the avenue through which meaningful utilization can occur, yet adoption continues to be the exception and not the rule. In a 2008 New England Journal of Medicine survey of 2,800 physicians only 4% reported having a fully functional EMR platform. What will it take for national adoption of EMR? As is the case with most things that we know are good for us, it will take both the stick and the carrot. In the American Recovery and Reinvestment Act of 2009, President Obama specifically included incentives and possible penalties to move adoption of EMR forward at a much faster pace. Individual physicians are eligible for $64,000 in subsidies and hospitals could receive up to $11 million for implementing an EMR program. Medicare and Medicaid certified providers could also face reimbursement penalties if they do not have a system in place. Specific deadlines are yet to be established, but compliance to receive subsidies or avoid penalties will hinge on systems that would meet the definition of “meaningful use”.
Although the final definition of meaningful use is yet to be agreed upon by the Health IT Standards Committee (a federally mandated body), they have published a quasi-mission statement for the concept: “Better healthcare does not come solely from adoption of technology itself but through the exchange and use of health information to best inform clinical decisions at the point of care.” What is enlightening about this statement is that it emphasizes the use and exchange of data as the key and not the technology itself. It is not the “what” that is important, but rather the “how and why”. This is why functionality, interoperability and security become the three critical elements to a successful EMR platform.
Exchange of data
In recent years Health Information Exchanges (HIE) and Regional Health Information Organizations (RHIO) have been developing around the country to empower secure transfer of medical information between participants across a chain of care. This would include hospitals (and their various departments), physicians and practice groups, specialists, and providers of long term care. It could also include labs, pharmacy, and supplies. HIE’s function day-to-day transferring medical records throughout a connected group of stakeholders. The RHIO is the governing body that sets the standards for the HIE to follow in a given region so that all stakeholders can benefit from participation. Following the mandate set by the Office of the National Coordinator for Health Information Technology to create a National Health Information Network (NIHN); RHIO’s establish the local level of interoperable connectivity that must be in place to create a nation wide network. There are almost 200 RHIO’ around the country at various stages of development and functionality with as many as 57 currently reporting that they are actively exchanging health records across a variety of approved participants.
“In the past, technology was too slow, too expensive, unconnected, and technology was too quickly outdated for any meaningful level of adoption and information exchange to happen”, says Dr. Faiz Fatteh, CEO of Soren Technology, “but now the costs are very low if not non-existent, speed and security of connectivity is finally here, and the emphasis now has moved way beyond simply transferring records from paper to digital files, and it is really now all about sharing data through use of an HIE platform connected via a geographically situated RHIO.”
One stakeholder in the process slow to be involved in the development of the NIHN is the insurance industry. When looking at the various RHIO’s in place around the country, the proverbial elephant in the room is the lack of insurance companies involved. Save for a few exceptions and its own failed attempt at creating a national exchange, the insurance industry has not been as actively involved as it should be. Will that change? It appears that with the efforts towards national healthcare reform being driven by incentives and mandates to finally get a national network in place, the insurance industry will be well served to be getting on board as well.
What’s in it for me?
Financial incentives have been targeted at the providers, but the insurance industry stands to benefit from at least three perspectives:
1) Improved underwriting -- Obviously medical records are the key tool used in underwriting life and health insurance. Easier access to the most up to date and comprehensive records on an applicant can only improve the underwriting process, pricing, and outcomes. Anything that can be done to reduce the time and costs involved in collecting medical records and ensure the records collected are complete, would very much be to the advantage of the insurance company and the applicant.
2) Reduced claims -- Underwriting is always the best defense from unnecessary claims. Better coordination of care and records will provide information to avoid duplicative and unneeded treatments, poor outcomes, missed conditions, and opportunities for fraud.
3) Competitive necessity -- As time progresses there will be more pressure from providers with an EMR capacity to submit claims through them and manage the process on their platform. Insurers not participating will find themselves at a disadvantage in the marketplace.
“As one the largest APS retrieval companies in the United States, we touch thousands of medical records every day”, explained Parameds.com CEO, Eli Rowe, “and we know from experience how difficult the task of obtaining records is. The vast majority of records we collect are sent to us as paper and then need to be sorted and scanned before we can deliver them to our clients. We have looked for a long time at what it will take for payers to be successful participants in the growth of EMR, and our work with life, health, DI and LTC insurers have shown us that payers are well situated to play a lead role.”
Because of the central role that underwriting and claims plays in the world of health care, all carriers are in a position to lead and benefit from the rapid adoption of EMR and growth of a national exchange capability. The benefits to health insurers on the claims side and life insurers on the underwriting side are obvious, but DI and LTC insurers will see great benefits on both of those fronts as well. At the end of the day, it is good public policy and good business to be actively involved and help shape the outcome of what is inevitable.
Conclusion
“Progress has, of course, been made in the development of electronic medical record systems (EMRS). Very little of the data that are routinely generated by computer-such as laboratory test results-are now lost to electronic accessibility, as they typically were twenty years ago, when the typical lab instrument would print its results on paper and discard the electronic version. Nevertheless, much of the information on which clinical care is based continues, in most institutions, not to be captured in electronically usable form. This includes the results of patient and family histories, physical examinations, doctors' and nurses' notes, etc.”
That observation on the state of EMR was not written within the last couple of years, it was written 15 years ago by Peter Szolovits from MIT’s Laboratory for Computer Science. How much progress has been made since 1995 when this was written depends on your point of view. Current studies still show actual adoption and use of an EMR system that would meet the definition of “meaningful use” to be very small (various estimates are 1%-4% of providers). Yet, technology and costs are now conducive to rapid adoption, government incentives are in place, standards and regional networks to foster HIE are emerging across the country, and a majority of consumers support the idea of collecting and exchanging electronic medical records with proper privacy and security measures in place.
Ten and fifteen years ago, it was a matter of if EMR could happen. Now it is just a matter of when. We will see more progress in this direction over the next 2-5 years than we have during the last 30. The insurance industry stands to benefit greatly from what is emerging and it is happening faster than you think. “Prepare to be assimilated--resistance is futile…”
Tuesday, November 24, 2009
Growing Financial Pressure on Seniors as Government Pushes Back
Numerous studies and reports continue highlighting the pressure being placed on seniors to find ways to cover the growing costs of Long Term Care
By Chris Orestis
In a recent report, the government agency that administers Medicare and Medicaid detailed the possible impact of cuts proposed in healthcare reform passed by the House of Representatives. The study states that the proposed $500 billion in cuts would be so severe that hospitals and nursing homes would be forced to stop accepting Medicare as payment.
The report says that seniors would suffer form additional reductions in benefits and services to pay for the $500 billion in reduced spending. The White House answered back against the report’s findings by saying the reductions would come in the form of reduced wasted spending on fraud and abuse in the system and from administrative savings through such efficiencies as expanded use of electronic medical records. Democrats also contend that these cuts would extend the life of Medicare a number of years before becoming insolvent.
As is often the case, both sides are focusing on the aspects of this study that bolster their position in the debate. But regardless of who is right, one truth is clear—seniors need to be preparing themselves for less and less financial support coming from the government. The burden to cover the costs of senior housing and long term care will continue to be pushed back on seniors and their families and people should do all they can to prepare for the inevitable.
Two recent reports add more evidence to the alarming trend of financial pressure being pushed back onto seniors and their families as they reach the age that the costs of long term care play a central role in their lives. In addition to Medicaid cuts in the states and cuts to Medicare being proposed as part of healthcare reform, more money will continue coming out of seniors’ pockets.
The annual MetLife Mature Markets Institute study tracking the costs of long term care in assisted living, nursing homes and home healthcare was recently released showing significant increases in costs over the last year:
- Nursing Home costs rose 3.3%
- Assisted Living costs rose 3.3%
- Home Healthcare costs rose 5%
- Adult Day care costs rose 4.7%
The increasing costs of long term care can be attributed to the most basic economic principal there is: supply and demand. The economic crisis has slowed the construction and expansion of facility based care. Also, more people requiring long term care are having a difficult time selling their homes. As the population of seniors demanding long term care services of every type increases, the supply of options and dollars is decreasing—driving up the costs.
In another alarming report, the costs of Medicare premiums will rise 15% next year. This will push the monthly Medicare premium above $100 for the first time in history. The final outcome of this increase, or measures to offset the increase, is being debated in Congress as part of healthcare reform. Regardless of the outcome, this will now become a yearly struggle as the population going onto Medicare is exploding-- and just when the country is least prepared financially to accommodate the demand.
The realities of a global economic recession intersecting with explosive growth in the senior populations will create increasing pressures for the United States. More people needing help (money), with less resources to go around (money), equals hard choices about how to help those who need it most (money). Increasing emphasis on the individual to shoulder more of the costs of their senior years will grow quickly. Moves to cut COLA’s, raise the minimum age for Medicare and cut Medicaid funding in the states will become more common occurrences.
The Baby Boom generation is still in the early stages of moving into their retirement years and the amount of money required to support these programs is already overwhelming. As economic and demographic trends over the coming years continues to challenge the governments ability to keep pace, seniors and their families must do all they can to prepare themselves financially for the costs of retirement and the even greater costs of long term healthcare.
By Chris Orestis
In a recent report, the government agency that administers Medicare and Medicaid detailed the possible impact of cuts proposed in healthcare reform passed by the House of Representatives. The study states that the proposed $500 billion in cuts would be so severe that hospitals and nursing homes would be forced to stop accepting Medicare as payment.
The report says that seniors would suffer form additional reductions in benefits and services to pay for the $500 billion in reduced spending. The White House answered back against the report’s findings by saying the reductions would come in the form of reduced wasted spending on fraud and abuse in the system and from administrative savings through such efficiencies as expanded use of electronic medical records. Democrats also contend that these cuts would extend the life of Medicare a number of years before becoming insolvent.
As is often the case, both sides are focusing on the aspects of this study that bolster their position in the debate. But regardless of who is right, one truth is clear—seniors need to be preparing themselves for less and less financial support coming from the government. The burden to cover the costs of senior housing and long term care will continue to be pushed back on seniors and their families and people should do all they can to prepare for the inevitable.
Two recent reports add more evidence to the alarming trend of financial pressure being pushed back onto seniors and their families as they reach the age that the costs of long term care play a central role in their lives. In addition to Medicaid cuts in the states and cuts to Medicare being proposed as part of healthcare reform, more money will continue coming out of seniors’ pockets.
The annual MetLife Mature Markets Institute study tracking the costs of long term care in assisted living, nursing homes and home healthcare was recently released showing significant increases in costs over the last year:
- Nursing Home costs rose 3.3%
- Assisted Living costs rose 3.3%
- Home Healthcare costs rose 5%
- Adult Day care costs rose 4.7%
The increasing costs of long term care can be attributed to the most basic economic principal there is: supply and demand. The economic crisis has slowed the construction and expansion of facility based care. Also, more people requiring long term care are having a difficult time selling their homes. As the population of seniors demanding long term care services of every type increases, the supply of options and dollars is decreasing—driving up the costs.
In another alarming report, the costs of Medicare premiums will rise 15% next year. This will push the monthly Medicare premium above $100 for the first time in history. The final outcome of this increase, or measures to offset the increase, is being debated in Congress as part of healthcare reform. Regardless of the outcome, this will now become a yearly struggle as the population going onto Medicare is exploding-- and just when the country is least prepared financially to accommodate the demand.
The realities of a global economic recession intersecting with explosive growth in the senior populations will create increasing pressures for the United States. More people needing help (money), with less resources to go around (money), equals hard choices about how to help those who need it most (money). Increasing emphasis on the individual to shoulder more of the costs of their senior years will grow quickly. Moves to cut COLA’s, raise the minimum age for Medicare and cut Medicaid funding in the states will become more common occurrences.
The Baby Boom generation is still in the early stages of moving into their retirement years and the amount of money required to support these programs is already overwhelming. As economic and demographic trends over the coming years continues to challenge the governments ability to keep pace, seniors and their families must do all they can to prepare themselves financially for the costs of retirement and the even greater costs of long term healthcare.
Wednesday, September 2, 2009
Life Expectancy Compression
The impact of moving into a long term care facility on length of life
Life Expectancy has been on an upward trajectory for over 100 years. According to the most recent report released by the AARP, the age group 65 and above will increase 89% over the next twenty years, and the 85 and older population will grow 74% during the same period. This rise in life expectancy, and the impact on quality of life was explored by James F. Fries in his 1982 study for the National Academy of Sciences entitled “The Compression of Morbidity”. In the paper, Fries contends that the aging population will live longer and in much better condition for a longer period of time due to improved lifestyles, nutrition, exercise, abstinence, and education. The flip side of this dynamic is that once people experience a disease or injury that requires long term care, the result is most often a dramatic decrease of life expectancy. For example, an age appropriately healthy 78 year old that lives an independent and active lifestyle might have a life expectancy of 15 years or greater. If that same individual suffered physical trauma or a disorder that required a move into a long term care facility, their life expectancy could be reduced 50%-75%.
The Assisted Living and Skilled Nursing Home (Senior Living) industry currently houses approximately 2,000,000 people across 60,000 facilities in the United States. This represents one of the biggest components of our country’s health care system and as an industry, theses facilities experience the impact of “Life Expectancy Compression” on a daily basis. Average “length of stay” is a carefully tracked industry benchmark for determining turnover and occupancy metrics. In the annual State of the Senior Housing Industry report released by the American Senior Housing Association (ASHA) the Senior Living industry reported average length of stay in 2008: Assisted Living (21 months), Independent Living (38 months), CCRC (77 months) and Alzheimer’s Care (17 months).
According to the National Center for Assisted Living (NCAL), of those currently residing in an assisted living community 34% will move to a skilled nursing facility due to deteriorating health and 30% will die. The mortality rate of individuals moving into a skilled nursing facility is death within the first 12 months by as much as 50%-60%. The mortality rate is even higher in the first 6 months.
In addition to length of stay experience, there are a number of studies that have been conducted measuring life expectancy across significant population cohorts in various forms of long term care settings:
In the study Mortality-related factors and 1-year survival in nursing home residents it was concluded from a population of over 100,000 residents during a three year period: “Major factors associated with 1-year mortality were identified in both the newly admitted and long-stay cohorts. MDS data can identify major factors associated with 1-year mortality in newly admitted and long-stay nursing home residents.” The first year of residence in a nursing home is the highest risk of death for the resident.
The research paper Death Rates Following Nursing Home & Care Facility Placement concludes: “There is evidence that people with dementia admitted to nursing homes and care facilities die comparatively quickly. It is known that mortality rates are high, initially, when people move from their own homes. Mortality rates are especially high in nursing homes.” The mortality rate for an individual moving into an Alzheimer’s care unit within the first year is greater than 50%.
In recent years the insurance industry has begun taking a closer look at the unique factors of underwriting seniors. As more insurance products are sold to higher risk populations, it has become critical to better understand factors impacting morbidity and mortality. Senior Vice President and Chief Medical Officer of RGA Reinsurance Company, J. Carl Holowaty, MD, DBIM, stated in a 2009 paper published in the Journal of the Academy of Life Underwriting that loss of ADL’s (activities of daily living: bathing, dressing, toileting, transferring, and continence) increases the risk of death. He also cites “will to live” in the elderly “must be taken very seriously” and that there is a relationship between mortality and degree of social engagement and changes in social patterns over time. Moving into an institutional care facility is possibly the single most disruptive event to patterns of social engagement that a person could experience (ranking maybe even higher than the death of a spouse).
What has been observed by daily experience throughout the entire long term care industry, and supported by numerous studies, is that individuals living in institutional care (regardless of age) will have significantly shorter life expectancies than their contemporaries living independently. Mortality is not only driven by their condition, but also by the impact of the significant change in environment. There are intangible factors such as “will to live” and tangible factors such as exposure to communicable diseases in the group environment that all come together to “compress” their life expectancy. Until very recently, actuarial tables and life expectancy calculations have ignored this well known and well documented fact. But now, the reality of this dynamic is becoming more important as the population of people reaching the compression point is increasing. Accurate underwriting in today’s “Silver Tsunami” driven world must take into account that people may be living longer and healthier lives, but when they cross the morbidity threshold, their life expectancies drop dramatically.
Exhibits
1) Length of Stay Data, Group 1 (Skilled Nursing Provider)
2008:
Medicaid admissions= 149 residents @ 379 days
Private Pay admissions= 77 residents @ 335 days
2) Length of Stay Data, Group 2 (Assisted Living Provider)
2007-2009(Q2):
44 deceased residents with a combined average length of stay of 2.9 years
- 75% female
- 25% male
Sources
American Seniors Housing Association, The State of Senior Housing, 2008
Death Rates Following Nursing Homes & Care Facility Placement: http://alzheimers.about.com/od/caregivers/a/surv_nurs_homes.htm
Mortality-related factors and 1-year survival in nursing home residents: http://www.ncbi.nlm.nih.gov/pubmed/12558718
Mortality, Disability, and Nursing Home Use for Persons with and without Hip Fracture: A Population-Based Study: http://pt.wkhealth.com/pt/re/jags/abstract.00004495-20021000000005.htm;jsessionid=KQNQ9hz1WyBL5gzxJTCyh2y2PWYj6FQs2mKGrcYjjpVndtf9g7jP!331639832!181195628!8091!-1
2008 MetLife Market Survey of Nursing Homes and Assisted Living Costs: http://www.metlife.com/assets/cao/mmi/publications/studies/mmi-studies-2008-nhal-costs.pdf
Demographic Profile of 65+ Population : http://www.metlife.com/assets/cao/mmi/publications/studies/mmi-studies-65-profile-20041010.pdf
Demographic Profile of American Baby Boomers: http://www.metlife.com/assets/cao/mmi/publications/studies/mmi-studies-boomer-profile-2007.pdf
Nursing Homes Fact Sheet , AARP Public Policy Institute: http://www.aarp.org/research/longtermcare/nursinghomes/aresearch-import-669-FS10R.html
The Silver Tsunami: http://www.lifecarefunding.com/whitepapers/LifeCareFundingGroupWhitePaper8-08SilverTsunami.pdf
Brown Atlas of Dying: http://www.chcr.brown.edu/dying/BROWNATLAS.HTM
CDC, National Center for Health Statistics: http://www.cdc.gov/nchs/default.htm
The Compression of Morbidity: http://www.milbank.org/quarterly/830427fries.pdf
Life Expectancy has been on an upward trajectory for over 100 years. According to the most recent report released by the AARP, the age group 65 and above will increase 89% over the next twenty years, and the 85 and older population will grow 74% during the same period. This rise in life expectancy, and the impact on quality of life was explored by James F. Fries in his 1982 study for the National Academy of Sciences entitled “The Compression of Morbidity”. In the paper, Fries contends that the aging population will live longer and in much better condition for a longer period of time due to improved lifestyles, nutrition, exercise, abstinence, and education. The flip side of this dynamic is that once people experience a disease or injury that requires long term care, the result is most often a dramatic decrease of life expectancy. For example, an age appropriately healthy 78 year old that lives an independent and active lifestyle might have a life expectancy of 15 years or greater. If that same individual suffered physical trauma or a disorder that required a move into a long term care facility, their life expectancy could be reduced 50%-75%.
The Assisted Living and Skilled Nursing Home (Senior Living) industry currently houses approximately 2,000,000 people across 60,000 facilities in the United States. This represents one of the biggest components of our country’s health care system and as an industry, theses facilities experience the impact of “Life Expectancy Compression” on a daily basis. Average “length of stay” is a carefully tracked industry benchmark for determining turnover and occupancy metrics. In the annual State of the Senior Housing Industry report released by the American Senior Housing Association (ASHA) the Senior Living industry reported average length of stay in 2008: Assisted Living (21 months), Independent Living (38 months), CCRC (77 months) and Alzheimer’s Care (17 months).
According to the National Center for Assisted Living (NCAL), of those currently residing in an assisted living community 34% will move to a skilled nursing facility due to deteriorating health and 30% will die. The mortality rate of individuals moving into a skilled nursing facility is death within the first 12 months by as much as 50%-60%. The mortality rate is even higher in the first 6 months.
In addition to length of stay experience, there are a number of studies that have been conducted measuring life expectancy across significant population cohorts in various forms of long term care settings:
In the study Mortality-related factors and 1-year survival in nursing home residents it was concluded from a population of over 100,000 residents during a three year period: “Major factors associated with 1-year mortality were identified in both the newly admitted and long-stay cohorts. MDS data can identify major factors associated with 1-year mortality in newly admitted and long-stay nursing home residents.” The first year of residence in a nursing home is the highest risk of death for the resident.
The research paper Death Rates Following Nursing Home & Care Facility Placement concludes: “There is evidence that people with dementia admitted to nursing homes and care facilities die comparatively quickly. It is known that mortality rates are high, initially, when people move from their own homes. Mortality rates are especially high in nursing homes.” The mortality rate for an individual moving into an Alzheimer’s care unit within the first year is greater than 50%.
In recent years the insurance industry has begun taking a closer look at the unique factors of underwriting seniors. As more insurance products are sold to higher risk populations, it has become critical to better understand factors impacting morbidity and mortality. Senior Vice President and Chief Medical Officer of RGA Reinsurance Company, J. Carl Holowaty, MD, DBIM, stated in a 2009 paper published in the Journal of the Academy of Life Underwriting that loss of ADL’s (activities of daily living: bathing, dressing, toileting, transferring, and continence) increases the risk of death. He also cites “will to live” in the elderly “must be taken very seriously” and that there is a relationship between mortality and degree of social engagement and changes in social patterns over time. Moving into an institutional care facility is possibly the single most disruptive event to patterns of social engagement that a person could experience (ranking maybe even higher than the death of a spouse).
What has been observed by daily experience throughout the entire long term care industry, and supported by numerous studies, is that individuals living in institutional care (regardless of age) will have significantly shorter life expectancies than their contemporaries living independently. Mortality is not only driven by their condition, but also by the impact of the significant change in environment. There are intangible factors such as “will to live” and tangible factors such as exposure to communicable diseases in the group environment that all come together to “compress” their life expectancy. Until very recently, actuarial tables and life expectancy calculations have ignored this well known and well documented fact. But now, the reality of this dynamic is becoming more important as the population of people reaching the compression point is increasing. Accurate underwriting in today’s “Silver Tsunami” driven world must take into account that people may be living longer and healthier lives, but when they cross the morbidity threshold, their life expectancies drop dramatically.
Exhibits
1) Length of Stay Data, Group 1 (Skilled Nursing Provider)
2008:
Medicaid admissions= 149 residents @ 379 days
Private Pay admissions= 77 residents @ 335 days
2) Length of Stay Data, Group 2 (Assisted Living Provider)
2007-2009(Q2):
44 deceased residents with a combined average length of stay of 2.9 years
- 75% female
- 25% male
Sources
American Seniors Housing Association, The State of Senior Housing, 2008
Death Rates Following Nursing Homes & Care Facility Placement: http://alzheimers.about.com/od/caregivers/a/surv_nurs_homes.htm
Mortality-related factors and 1-year survival in nursing home residents: http://www.ncbi.nlm.nih.gov/pubmed/12558718
Mortality, Disability, and Nursing Home Use for Persons with and without Hip Fracture: A Population-Based Study: http://pt.wkhealth.com/pt/re/jags/abstract.00004495-20021000000005.htm;jsessionid=KQNQ9hz1WyBL5gzxJTCyh2y2PWYj6FQs2mKGrcYjjpVndtf9g7jP!331639832!181195628!8091!-1
2008 MetLife Market Survey of Nursing Homes and Assisted Living Costs: http://www.metlife.com/assets/cao/mmi/publications/studies/mmi-studies-2008-nhal-costs.pdf
Demographic Profile of 65+ Population : http://www.metlife.com/assets/cao/mmi/publications/studies/mmi-studies-65-profile-20041010.pdf
Demographic Profile of American Baby Boomers: http://www.metlife.com/assets/cao/mmi/publications/studies/mmi-studies-boomer-profile-2007.pdf
Nursing Homes Fact Sheet , AARP Public Policy Institute: http://www.aarp.org/research/longtermcare/nursinghomes/aresearch-import-669-FS10R.html
The Silver Tsunami: http://www.lifecarefunding.com/whitepapers/LifeCareFundingGroupWhitePaper8-08SilverTsunami.pdf
Brown Atlas of Dying: http://www.chcr.brown.edu/dying/BROWNATLAS.HTM
CDC, National Center for Health Statistics: http://www.cdc.gov/nchs/default.htm
The Compression of Morbidity: http://www.milbank.org/quarterly/830427fries.pdf
Life Settlements: The Legal Rights of Insurance Policy Owners
The right of a policy owner to engage in a Life Settlement was guaranteed when U.S. Supreme Court Justice Oliver Wendell Holmes ruled in 1911 that life insurance is personal property and the owner is protected by all the same inalienable rights that any owner of real estate, stocks or any other assets enjoy. By the end of the 20th Century, Viaticals emerged as an opportunity for AIDS patients to cash out of a life insurance policy while still alive to cover the high costs of care not covered by health insurance. The Life Settlement market became an offshoot of Viaticals and has been growing rapidly ever since, with $13 billion in transactions completed in 2008.
In a 2003 study conducted by Conning & Co, they estimated that 90 million senior citizens owned approximately $500 billion worth of life insurance in 2003, of which over $100 billion was owned by seniors eligible for Life Settlements. The Wharton Business School issued a study where they observed, “Life insurance policies are typically assignable, which means that a policyholder is free to transfer their ownership of the policy to another person. A policyholder’s right to assign their policy to someone other than the insurance carrier has existed for some time.” The study also went on to observe that a life settlement, “gives the policyholder the economic freedom to choose between a number of buyers and, in so doing, to receive the fair market price for their policy.”
The right of a policy owner to engage in a life settlement is guaranteed by the landmark Supreme Court decision, Grigbsy v. Russell. In Justice Holmes’ final opinion it was codified that life insurance possessed all the ordinary characteristics of property, and therefore represented an asset that a policy owner could transfer without limitation. This decision established a life insurance policy as transferable property that contains specific legal rights, including the right to:
· Name the policy beneficiary
· Change the beneficiary designation
· Assign the policy as collateral for a loan
· Borrow against the policy
· Sell the policy to another party
A number of insurance industry organizations such as the National Association of Insurance Commissioners (NAIC), National Council of Insurance Legislators (NCOIL), American Council of Life Insurers (ACLI), National Association of Insurance and Financial Advisors (NAIFA), American Association of Life Underwriters (AALU) and the Life Insurance Settlement Association (LISA) have also recognized the legal rights of a policy owner to liquidate a life insurance policy through a life settlement.
During a panel session at ReFocus 2008, jointly presented by the ACLI and the Society of Actuaries, industry CEO’s agreed on the need for Life Settlements. Stuart Reese, chairman, president and CEO of MassMutual Life Insurance Company said that if a policy is first purchased with protection in mind and is no longer needed after a period of time, then a contract holder does have property rights and “there is a legitimate Life Settlement business which is consistent with the purpose of insurance.”
“The Life Settlement industry provides an important and efficient function to the insurance marketplace-- and it is a practice established by the Supreme Court”, said Chris Orestis, President of Life Care Funding Group (www.lifecarefunding.com), “In light of the long standing Supreme Court ruling on the transferability of insurance as property; those holding a policy that they no longer need will always be able to maximize the value of that property through a life settlement transaction.”
In a 2003 study conducted by Conning & Co, they estimated that 90 million senior citizens owned approximately $500 billion worth of life insurance in 2003, of which over $100 billion was owned by seniors eligible for Life Settlements. The Wharton Business School issued a study where they observed, “Life insurance policies are typically assignable, which means that a policyholder is free to transfer their ownership of the policy to another person. A policyholder’s right to assign their policy to someone other than the insurance carrier has existed for some time.” The study also went on to observe that a life settlement, “gives the policyholder the economic freedom to choose between a number of buyers and, in so doing, to receive the fair market price for their policy.”
The right of a policy owner to engage in a life settlement is guaranteed by the landmark Supreme Court decision, Grigbsy v. Russell. In Justice Holmes’ final opinion it was codified that life insurance possessed all the ordinary characteristics of property, and therefore represented an asset that a policy owner could transfer without limitation. This decision established a life insurance policy as transferable property that contains specific legal rights, including the right to:
· Name the policy beneficiary
· Change the beneficiary designation
· Assign the policy as collateral for a loan
· Borrow against the policy
· Sell the policy to another party
A number of insurance industry organizations such as the National Association of Insurance Commissioners (NAIC), National Council of Insurance Legislators (NCOIL), American Council of Life Insurers (ACLI), National Association of Insurance and Financial Advisors (NAIFA), American Association of Life Underwriters (AALU) and the Life Insurance Settlement Association (LISA) have also recognized the legal rights of a policy owner to liquidate a life insurance policy through a life settlement.
During a panel session at ReFocus 2008, jointly presented by the ACLI and the Society of Actuaries, industry CEO’s agreed on the need for Life Settlements. Stuart Reese, chairman, president and CEO of MassMutual Life Insurance Company said that if a policy is first purchased with protection in mind and is no longer needed after a period of time, then a contract holder does have property rights and “there is a legitimate Life Settlement business which is consistent with the purpose of insurance.”
“The Life Settlement industry provides an important and efficient function to the insurance marketplace-- and it is a practice established by the Supreme Court”, said Chris Orestis, President of Life Care Funding Group (www.lifecarefunding.com), “In light of the long standing Supreme Court ruling on the transferability of insurance as property; those holding a policy that they no longer need will always be able to maximize the value of that property through a life settlement transaction.”
Wednesday, December 17, 2008
Life Settlements vs. STOLI
Understanding the Differences between Stranger Owned Life Insurance (STOLI) and Life Settlements
Executive Summary
The origins of Life Settlements can be traced back to a landmark Supreme Court ruling in 1911 that established the property ownership rights of a life insurance policy holder. By the end of the century, the conditions were right for a secondary life insurance market to emerge and flourish. The continuing debate around this evolving market has been the pros and cons to the overall health of the life insurance industry. Effective arguments, supported by market evidence from both sides, have been made about the benefits and threats of Life Settlements to the broader insurance industry. Both the Life Settlement and the life insurance industries have mobilized forces to bolster their position in what has become a vigorous debate. The major threat to the industry, and driving factor of the friction between the two camps, has been around Stranger Owned Life Insurance (STOLI). The NAIC and NCOIL have developed model regulations that are being introduced and adopted in some states to address STOLI abuses. Both the insurance and Life Settlement industry are opposed to STOLI, and the life insurance industry is on the record acknowledging the legal rights and market efficiency of policy holders’ ability to liquidate unneeded policies through a Life Settlement.
A robust secondary market will increase customers’ valuation of life insurance policies. Economic theory holds that an active and efficient secondary market for a good improves the liquidity of the good as an asset, and thus increases
the value of the good to consumers.
The Benefits of a Secondary Market for Life Insurance Policies
The Wharton School, University of Pennsylvania
Introduction: Evolution of a Market
In 1911, United States Supreme Court Justice Oliver Wendell Holmes ruled that life insurance possesses all of the inherent characteristics of personal property giving a policy owner the right to dispose of this asset as they see fit. By the end of the 20th Century, Viaticals emerged as an opportunity for AIDS patients to cash out of a life insurance policy while still alive to cover the high costs of care not covered by health insurance. The Life Settlement market became an offshoot of Viaticals and has been growing rapidly ever since, with $30 billion in transactions projected in 2007. In a 2003 study conducted by Conning & Co, they estimated that 90 million senior citizens owned approximately $500 billion worth of life insurance in 2003, of which over $100 billion was owned by seniors eligible for Life Settlements.
With this kind of market potential it is no surprise that Wall Street is now paying attention. In a Business Week article published in July of 2007, it was observed, “Wall Street sees huge profits in buying policies, throwing them into a pool, dividing the pool into bonds and selling the bonds to pension funds, college endowments, and other professional investors. If the market develops as Wall Street expects, ordinary mutual funds will soon be able to get in on the action, too.” But, with these kinds of numbers and market potential it should be no surprise that regulators and law makers are paying attention as well.
The secondary market for life insurance policies gives the policyholder the economic freedom to choose between a number of buyers and, in so doing,
to receive the fair market price for their policy.
The Benefits of a Secondary Market for Life Insurance Policies
The Wharton School, University of Pennsylvania
Fundamental Property Rights
Life Settlements involving policies that were purchased based on a sound insurable interest premise are the foundation of a legitimate transaction. In fact, this type of a transaction is supported by the landmark Supreme Court decision, Grigbsy v. Russell. In Justice Holmes’ final opinion it was codified that life insurance possessed all the ordinary characteristics of property, and therefore represented an asset that a policy owner could transfer without limitation.
This decision established a life insurance policy as transferable property that contains specific legal rights, including the right to:
· Name the policy beneficiary
· Change the beneficiary designation
· Assign the policy as collateral for a loan
· Borrow against the policy
· Sell the policy to another party
Justice Holmes makes a clear distinction between a policy based on insurable interest and one where none exists, “A contract of insurance upon a life in which the insured has no interest is a pure wager that gives the insured a sinister counter interest in having the life come to an end. The very meaning of an insurable interest is an interest in having the life continue…”, his decision clearly considers an insurance policy to be the same as real property and does not oppose transferring the property/policy to an entity without an interest in the life of the insured, and to this point he is very clear, “…life insurance has become in our days one of the best recognized forms of investment and self-compelled saving. So far as reasonable safety permits, it is desirable to give to life policies the ordinary characteristics of property. To deny the right to sell except to persons having such an interest is to diminish appreciably the value of the contract in the owner's hands”.
Life insurance policies are typically assignable, which means that a policyholder is free to transfer their ownership of the policy to another person. A policyholder’s right to assign their policy to someone other than the insurance carrier has existed for some time.
The Benefits of a Secondary Market for Life Insurance Policies
The Wharton School, University of Pennsylvania
The Insurable Interest Debate
The right of a policy owner to transfer ownership interest is a guaranteed right under Constitutional law established by one of the greatest legal minds in our country’s history. But the difference he recognized between policies based on insurable interest and one where none exists is a problem that the Life Settlement industry must address. In the case of STOLI are we looking at what Justice Holmes defines as, “a pure wager”? If that is the case, then this practice could threaten not only the long term future of the Life Settlement marketplace but also the foundation of life insurance itself.
Both the Life Insurance and Life Settlement industry have spoken out on the STOLI issue and made their concerns clear. The circumvention of insurable interest and the prospect of Congress revoking the tax deferred status of inside build up for life insurance, if the perception of insurance changes from income protection to life expectancy speculation, is at the root of their fears. The tax free exemption for inside build up of a life insurance policy is constantly under scrutiny by law makers. If it is ever concluded that life insurance has changed from its original function of providing a death benefit for beneficiaries to an investment vehicle for third parties to place “wagers” with no insurable interest in the insured-- then the tax free exemption could be revoked.
Legislative activity in the states has picked up over the last year as bills have been introduced and passed designed to stop STOLI transactions. The Governor of Ohio signed into law a bill that extends the time that a policy must be owned by the policy holder from two years to five before it can be settled. It is important to note that this law recognizes and does not impede Life Settlements done for legitimate changes in personal circumstances such as an adverse turn in health, loss of job or death of the beneficiary. In September, 2008, California passed an anti-STOLI bill and sent it to the desk of Governor Schwarzenegger for signature. Governor Schwarzenegger subsequently vetoed the measure and stated, “I am also concerned that the final version of the bill may unfairly exclude some companies from participating in the legitimate life settlement market,” and that he wants to be sure that life settlement legislation “does not unfairly discriminate against legitimate companies trying to compete in the life settlement business.”
At the conclusion of the 2008 legislative session in California, Brad Wenger of the Association of California Life and Health Insurance Companies was asked to comment about the differences between a Life Settlement and STOLI, “When people with existing life insurance policies that they no longer need are approached by a life-settlement company that will offer them an amount of money if they assign their policies to the company – that is a legitimate transaction,” Wenger emphasized, “STOLI’s are different.” The Life Insurance Settlement Association opposes the practice of STOLI. They are on the record stating, “A STOLI transaction circumvents insurable interest laws and is, therefore, illegal. STOLI transactions abuse uninformed senior consumers and damage the reputation of the life settlement industry. Public policy makers should understand STOLI, its consequences, and the best methods to effectively prevent this practice.”
In the midst of these concerns and legislative developments surrounding STOLI, the Life Insurance industry is on the record acknowledging the legitimacy of Life Settlements. The American Council of Life Insurers (ACLI) are on the record saying that the anti-STOLI legislation they support would not “affect the property rights of policy owners who acquired life insurance in good faith,” rather they are combating transactions where, “the intent at the outset is to transfer the death benefits to investors.” During a panel session at ReFocus 2008, jointly presented by the ACLI and the Society of Actuaries, industry CEO’s agreed that there is a need for Life Settlements. Stuart Reese, chairman, president and CEO of MassMutual Life Insurance Company said that if a policy is purchased with protection in mind and is no longer needed after a period of time, then a contract holder does have property rights and “there is a legitimate Life Settlement business which is consistent with the purpose of insurance.” Jessica Bibliowicz, chairman and CEO of National Financial Partners of New York, a distributor of financial services products to the high net worth market explained that Life Settlements do make people feel more relaxed about their options. Bibliowicz added, “It is not just a matter of surrender or die.”
Viatical and Life Settlement firms allow policyholders who have experienced a negative shift in life expectancy to obtain the fair market value for their life insurance assets. The flexibility offered by the secondary market for life insurance policies gives a policyholder the ability to respond to changes in their life situation.
The Benefits of a Secondary Market for Life Insurance Policies
The Wharton School, University of Pennsylvania
Conclusion
The market is still evolving and the insurance industry is effectively wielding its considerable clout with regulators and law makers to ensure practices such as STOLI that game the system are curtailed. Third party sponsored life insurance transactions initiated for the sole purpose of flipping them in the Life Settlement marketplace is not a practice that is in the best interest of consumers or the industry. Conversely, in light of the long standing Supreme Court ruling on the transferability of insurance as property, the ability for those holding a policy based on insurable interest that they no longer need will always be able to maximize the value of that property through a Life Settlement transaction. The Life Settlement industry provides an important and efficient function to the insurance marketplace-- and it is a practice defended by the Supreme Court. But what constitutes insurable interest and ownership rights, and how that defines the key differences between STOLI and a Life Settlement, are important for the industry and consumers to understand.
A consumer now knows that if they should experience a decline in life expectancy and no longer need (or no longer be able to afford) their life insurance policy, they will be able to sell it for its market value instead of having to surrender it for the low price offered by the insurance carrier.
The Benefits of a Secondary Market for Life Insurance Policies
The Wharton School, University of Pennsylvania
Bibliography
“The Benefits of a Secondary Market for Life Insurance Policies”; Doherty, Neil and Singer, Hal; Wharton Financial Institutions Center
U.S. Supreme Court GRIGSBY v. RUSSELL, 222 U.S. 149 (1911) 222 U.S. 149; A. H. GRIGSBY, Petitioner, v. R. L. RUSSELL and Lillie Burchard, Administrators of John C. Burchard, Deceased. No. 53. Argued November 10 and 13, 1911. Decided December 4, 1911.
"Life Settlements: Additional Pressure on Life Profits”; Conning & Co., 2003
“Life Settlements: Betting on Death”; Goldstein, Matthew; Business Week; July 23, 2007
“Little Known Insurance Practice Targets the Elderly”; Howard, John; Capitol Weekly; September 11, 2008
“Press Release”; State of Ohio, Department of Insurance; September 11, 208
“Life Settlement Advisory”; Morris, Manning & Martin, LLP; October 2, 2008
“Issues: STOLI”; Issues; American Council of Life Insurers; http://www.acli.com/
“STOLI Poses Danger to Industry”; Connolly, Jim; National Underwriter; March, 2008
Executive Summary
The origins of Life Settlements can be traced back to a landmark Supreme Court ruling in 1911 that established the property ownership rights of a life insurance policy holder. By the end of the century, the conditions were right for a secondary life insurance market to emerge and flourish. The continuing debate around this evolving market has been the pros and cons to the overall health of the life insurance industry. Effective arguments, supported by market evidence from both sides, have been made about the benefits and threats of Life Settlements to the broader insurance industry. Both the Life Settlement and the life insurance industries have mobilized forces to bolster their position in what has become a vigorous debate. The major threat to the industry, and driving factor of the friction between the two camps, has been around Stranger Owned Life Insurance (STOLI). The NAIC and NCOIL have developed model regulations that are being introduced and adopted in some states to address STOLI abuses. Both the insurance and Life Settlement industry are opposed to STOLI, and the life insurance industry is on the record acknowledging the legal rights and market efficiency of policy holders’ ability to liquidate unneeded policies through a Life Settlement.
A robust secondary market will increase customers’ valuation of life insurance policies. Economic theory holds that an active and efficient secondary market for a good improves the liquidity of the good as an asset, and thus increases
the value of the good to consumers.
The Benefits of a Secondary Market for Life Insurance Policies
The Wharton School, University of Pennsylvania
Introduction: Evolution of a Market
In 1911, United States Supreme Court Justice Oliver Wendell Holmes ruled that life insurance possesses all of the inherent characteristics of personal property giving a policy owner the right to dispose of this asset as they see fit. By the end of the 20th Century, Viaticals emerged as an opportunity for AIDS patients to cash out of a life insurance policy while still alive to cover the high costs of care not covered by health insurance. The Life Settlement market became an offshoot of Viaticals and has been growing rapidly ever since, with $30 billion in transactions projected in 2007. In a 2003 study conducted by Conning & Co, they estimated that 90 million senior citizens owned approximately $500 billion worth of life insurance in 2003, of which over $100 billion was owned by seniors eligible for Life Settlements.
With this kind of market potential it is no surprise that Wall Street is now paying attention. In a Business Week article published in July of 2007, it was observed, “Wall Street sees huge profits in buying policies, throwing them into a pool, dividing the pool into bonds and selling the bonds to pension funds, college endowments, and other professional investors. If the market develops as Wall Street expects, ordinary mutual funds will soon be able to get in on the action, too.” But, with these kinds of numbers and market potential it should be no surprise that regulators and law makers are paying attention as well.
The secondary market for life insurance policies gives the policyholder the economic freedom to choose between a number of buyers and, in so doing,
to receive the fair market price for their policy.
The Benefits of a Secondary Market for Life Insurance Policies
The Wharton School, University of Pennsylvania
Fundamental Property Rights
Life Settlements involving policies that were purchased based on a sound insurable interest premise are the foundation of a legitimate transaction. In fact, this type of a transaction is supported by the landmark Supreme Court decision, Grigbsy v. Russell. In Justice Holmes’ final opinion it was codified that life insurance possessed all the ordinary characteristics of property, and therefore represented an asset that a policy owner could transfer without limitation.
This decision established a life insurance policy as transferable property that contains specific legal rights, including the right to:
· Name the policy beneficiary
· Change the beneficiary designation
· Assign the policy as collateral for a loan
· Borrow against the policy
· Sell the policy to another party
Justice Holmes makes a clear distinction between a policy based on insurable interest and one where none exists, “A contract of insurance upon a life in which the insured has no interest is a pure wager that gives the insured a sinister counter interest in having the life come to an end. The very meaning of an insurable interest is an interest in having the life continue…”, his decision clearly considers an insurance policy to be the same as real property and does not oppose transferring the property/policy to an entity without an interest in the life of the insured, and to this point he is very clear, “…life insurance has become in our days one of the best recognized forms of investment and self-compelled saving. So far as reasonable safety permits, it is desirable to give to life policies the ordinary characteristics of property. To deny the right to sell except to persons having such an interest is to diminish appreciably the value of the contract in the owner's hands”.
Life insurance policies are typically assignable, which means that a policyholder is free to transfer their ownership of the policy to another person. A policyholder’s right to assign their policy to someone other than the insurance carrier has existed for some time.
The Benefits of a Secondary Market for Life Insurance Policies
The Wharton School, University of Pennsylvania
The Insurable Interest Debate
The right of a policy owner to transfer ownership interest is a guaranteed right under Constitutional law established by one of the greatest legal minds in our country’s history. But the difference he recognized between policies based on insurable interest and one where none exists is a problem that the Life Settlement industry must address. In the case of STOLI are we looking at what Justice Holmes defines as, “a pure wager”? If that is the case, then this practice could threaten not only the long term future of the Life Settlement marketplace but also the foundation of life insurance itself.
Both the Life Insurance and Life Settlement industry have spoken out on the STOLI issue and made their concerns clear. The circumvention of insurable interest and the prospect of Congress revoking the tax deferred status of inside build up for life insurance, if the perception of insurance changes from income protection to life expectancy speculation, is at the root of their fears. The tax free exemption for inside build up of a life insurance policy is constantly under scrutiny by law makers. If it is ever concluded that life insurance has changed from its original function of providing a death benefit for beneficiaries to an investment vehicle for third parties to place “wagers” with no insurable interest in the insured-- then the tax free exemption could be revoked.
Legislative activity in the states has picked up over the last year as bills have been introduced and passed designed to stop STOLI transactions. The Governor of Ohio signed into law a bill that extends the time that a policy must be owned by the policy holder from two years to five before it can be settled. It is important to note that this law recognizes and does not impede Life Settlements done for legitimate changes in personal circumstances such as an adverse turn in health, loss of job or death of the beneficiary. In September, 2008, California passed an anti-STOLI bill and sent it to the desk of Governor Schwarzenegger for signature. Governor Schwarzenegger subsequently vetoed the measure and stated, “I am also concerned that the final version of the bill may unfairly exclude some companies from participating in the legitimate life settlement market,” and that he wants to be sure that life settlement legislation “does not unfairly discriminate against legitimate companies trying to compete in the life settlement business.”
At the conclusion of the 2008 legislative session in California, Brad Wenger of the Association of California Life and Health Insurance Companies was asked to comment about the differences between a Life Settlement and STOLI, “When people with existing life insurance policies that they no longer need are approached by a life-settlement company that will offer them an amount of money if they assign their policies to the company – that is a legitimate transaction,” Wenger emphasized, “STOLI’s are different.” The Life Insurance Settlement Association opposes the practice of STOLI. They are on the record stating, “A STOLI transaction circumvents insurable interest laws and is, therefore, illegal. STOLI transactions abuse uninformed senior consumers and damage the reputation of the life settlement industry. Public policy makers should understand STOLI, its consequences, and the best methods to effectively prevent this practice.”
In the midst of these concerns and legislative developments surrounding STOLI, the Life Insurance industry is on the record acknowledging the legitimacy of Life Settlements. The American Council of Life Insurers (ACLI) are on the record saying that the anti-STOLI legislation they support would not “affect the property rights of policy owners who acquired life insurance in good faith,” rather they are combating transactions where, “the intent at the outset is to transfer the death benefits to investors.” During a panel session at ReFocus 2008, jointly presented by the ACLI and the Society of Actuaries, industry CEO’s agreed that there is a need for Life Settlements. Stuart Reese, chairman, president and CEO of MassMutual Life Insurance Company said that if a policy is purchased with protection in mind and is no longer needed after a period of time, then a contract holder does have property rights and “there is a legitimate Life Settlement business which is consistent with the purpose of insurance.” Jessica Bibliowicz, chairman and CEO of National Financial Partners of New York, a distributor of financial services products to the high net worth market explained that Life Settlements do make people feel more relaxed about their options. Bibliowicz added, “It is not just a matter of surrender or die.”
Viatical and Life Settlement firms allow policyholders who have experienced a negative shift in life expectancy to obtain the fair market value for their life insurance assets. The flexibility offered by the secondary market for life insurance policies gives a policyholder the ability to respond to changes in their life situation.
The Benefits of a Secondary Market for Life Insurance Policies
The Wharton School, University of Pennsylvania
Conclusion
The market is still evolving and the insurance industry is effectively wielding its considerable clout with regulators and law makers to ensure practices such as STOLI that game the system are curtailed. Third party sponsored life insurance transactions initiated for the sole purpose of flipping them in the Life Settlement marketplace is not a practice that is in the best interest of consumers or the industry. Conversely, in light of the long standing Supreme Court ruling on the transferability of insurance as property, the ability for those holding a policy based on insurable interest that they no longer need will always be able to maximize the value of that property through a Life Settlement transaction. The Life Settlement industry provides an important and efficient function to the insurance marketplace-- and it is a practice defended by the Supreme Court. But what constitutes insurable interest and ownership rights, and how that defines the key differences between STOLI and a Life Settlement, are important for the industry and consumers to understand.
A consumer now knows that if they should experience a decline in life expectancy and no longer need (or no longer be able to afford) their life insurance policy, they will be able to sell it for its market value instead of having to surrender it for the low price offered by the insurance carrier.
The Benefits of a Secondary Market for Life Insurance Policies
The Wharton School, University of Pennsylvania
Bibliography
“The Benefits of a Secondary Market for Life Insurance Policies”; Doherty, Neil and Singer, Hal; Wharton Financial Institutions Center
U.S. Supreme Court GRIGSBY v. RUSSELL, 222 U.S. 149 (1911) 222 U.S. 149; A. H. GRIGSBY, Petitioner, v. R. L. RUSSELL and Lillie Burchard, Administrators of John C. Burchard, Deceased. No. 53. Argued November 10 and 13, 1911. Decided December 4, 1911.
"Life Settlements: Additional Pressure on Life Profits”; Conning & Co., 2003
“Life Settlements: Betting on Death”; Goldstein, Matthew; Business Week; July 23, 2007
“Little Known Insurance Practice Targets the Elderly”; Howard, John; Capitol Weekly; September 11, 2008
“Press Release”; State of Ohio, Department of Insurance; September 11, 208
“Life Settlement Advisory”; Morris, Manning & Martin, LLP; October 2, 2008
“Issues: STOLI”; Issues; American Council of Life Insurers; http://www.acli.com/
“STOLI Poses Danger to Industry”; Connolly, Jim; National Underwriter; March, 2008
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