ALI-ABA Topical Courses Life Settlements: Investment Opportunities Under SEC Scrutiny December 17, 2009 Audio Webcast TABLE OF CONTENTS

Transcription

1 ALI-ABA Topical Courses Life Settlements: Investment Opportunities Under SEC Scrutiny December 17, 2009 Audio Webcast PROGRAM SCHEDULE FACULTY PARTICIPANTS FACULTY BIOGRAPHIES STUDY MATERIALS 1. Life Settlements and Securitizations By Chiahua Pan 2. Abacus Origination Process By Craig Seitel TABLE OF CONTENTS 3. Recent Tax Guidance Affecting Life Insurance Policies By Robert A. N. Cudd and Michelle M. Jewett 4. Letter from SEC Chairman Mary Schapiro to Senator Herb Kohl, Chairman of Senate Special Committee on Aging April 2009 Page ix 5. FINRA Regulatory Notice July NASD Notice to Members August DBRS Methodology: Rating U.S. Life Settlement Securitizations February Third-Party Purchaser s E&P Reduced by Interest on Loan Incurred to Acquire Life Insurance Policy By Robert A. N. Cudd and Michelle M. Jewett 9. IRS: Loan Origination by Foreign Entity Through U.S. Intermediary Subject to U.S. Tax September 2009 By Stephen L. Feldman, Robert A. N. Cudd, Shamir Merali and Remmelt A. Reigersman 10. IRS Issues Rulings Addressing Secondary Market Transactions in Life Insurance May 2009 By Robert A. N. Cudd, Michelle M. Jewett and Marjorie S. Elkin 11. Good Bank-Bad Bank for Insurance Companies: Is MBIA Just CIGNA Redux, Plus CDSs? News Bulletin March 2009 Morrison & Foerster LLP 12. Insurance Companies Adopt Thrift Holding Company Structure to Become Eligible for Treasury Capital Purchase Program and FDIC Liquidity Guarantee News Bulletin November 2008 Morrison & Foerster LLP 13. Credit Default Swaps as Insurance: One Regulator or Many? News Bulletin October 2008 Morrison vii & Foerster LLP xi xiii

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3 ALI-ABA Topical Courses Life Settlements: Investment Opportunities Under SEC Scrutiny Audio Webcast - TWRP06 December 17, 2009 PROGRAM SCHEDULE Program Schedule Eastern Central Mountain Pacific Alaska Hawaii Program Begins 12:30 p.m. 11:30 a.m. 10:30 a.m. 9:30 a.m. 8:30 a.m. 7:30 a.m. Adjournment 2:00 p.m. 1:00 p.m. 12:00 p.m. 11:00 a.m. 10:00 a.m. 9:00 a.m. Program (All Times Eastern) 12:30 p.m. Program Begins. Structure of life settlements Applicable state regulation Tax treatment Recent experiences in securitization Concerns raised by the SEC 2:00 p.m. Program Ends. Scope and Purpose: The recent economic crisis has increased the interest in life settlements, wherein life insurance policy holders sell their policies to third party investors. Policy sellers (usually wealthy and elderly or chronically/terminally ill) can realize a return in amounts greater than the cash surrender value but less than the face value. Investors hope to profit at the death of the former policy owner after paying transaction costs and something less than the face value of the policy. All aspects of life settlement transactions have recently come under SEC scrutiny, particularly the securitization of settled policies. The faculty panel will describe the structure of life settlements, applicable state regulation, tax treatment, recent experiences in securitization, and the concerns raised by the SEC. Suggested Prerequisite: Limited experience in subject matter Learning Objectives: Acquisition of knowledge and skills to develop proficiency as a practitioner; maintenance of professional competence as a practitioner; provision of information on recent legal developments Level of Instruction: Intermediate Total 60-minute hours of instruction: 1.5. Total 50-minute hours: 1.8. ix

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5 ALI-ABA Topical Courses Life Settlements: Investment Opportunities Under SEC Scrutiny December 17, 2009 Audio Webcast TWRP06 FACULTY Robert A. N. Cudd, Esquire Morrison & Foerster, LLP 425 Market Street San Francisco, California Chiahua Pan, Esquire Morrison & Foerster, LLP 1290 Avenue of the Americas New York, New York Craig Seitel Managing Partner & CEO Abacus Settlements, LLC 1790 Broadway, Suite 1500 New York, NY Robert W. Thompson Eimi Holdings xi

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7 ALI-ABA Topical Courses Life Settlements: Investment Opportunities Under SEC Scrutiny Audio Webcast Thursday, December 17, 2009 TWRP06 FACULTY BIOGRAPHIES Robert A.N. Cudd, Partner, Morrison & Foerster, LLP, San Francisco Mr. Cudd is a partner practicing in the San Francisco and New York offices of Morrison & Foerster. Mr. Cudd has over 30 years experience in a broad range of tax matters, including corporate, merger and acquisition, partnership, financial institution, real estate investment trust, and insurance tax issues. Mr. Cudd has had extensive experience structuring all types of corporate and partnership transactions and financial products, including those involving foreign entities, limited liability companies, REITs, RICs, REMICs, and tax-exempt organizations such as pension funds and foundations. He has been involved in all of the tax aspects of structuring investments in real estate, securities, joint-venture projects, private equity funds and hedge funds. He has broad experience in taxable and tax-free corporate, partnership, and business reorganizations; in acquisitions and dispositions; and in structuring financial products, such as securitizations, swaps, options, hedges, contingent payment debt instruments, and other innovative products. Mr. Cudd has structured numerous cross-border arrangements for both U.S. and foreign investors including both U.S. and foreign private equity funds, real estate funds, and hedge funds. Mr. Cudd is admitted to practice in the state and federal courts of New York and California, the 2nd Circuit U.S. Court of Appeals, and the United States Supreme Court. He is also listed among New York Super Lawyers for Chiahua Pan, Partner, Morrison & Foerster, LLP, New York City Ms. Pan is a partner in Morrison & Foerster s New York Office. Ms. Pan concentrates her practice in insurance and reinsurance transactional and regulatory work, including advising on capital markets transactions, insurance-linked notes and securitizations, structured insurance and reinsurance related products, reinsurance transactions, mergers and acquisitions, and other corporate reorganizations. She has advised domestic and foreign, onshore and offshore insurance companies and their financial advisors, and has experience in the life insurance and annuities, property and casualty, and financial guaranty industries. Ms. Pan's experience also includes life settlements, premium finance, life and annuity securitizations, Triple X, closed block securitizations, policy warehousing facilities, derivative products, transformer structures, regulatory issues including investments, licensing, agent issues, financial guarantee issues, risk-based capital issues, marketing and sales practices, and rehabilitation and insolvency questions. Prior to joining Morrison & Foerster LLP, Ms. Pan was special counsel at Cadwalader, Wickersham & Taft LLP, and Sullivan & Cromwell LLP. xiii

8 In addition to speaking on insurance topics and authoring various insurance-related articles, Ms. Pan has served as a lecturer at the Chinese University of Hong Kong and at the City University of New York. Ms. Pan received an A.B., cum laude, from Radcliffe College, Harvard University; an M.A. in Mathematics from Columbia University; an M.A. in Linguistics from Yale University; and her J.D. from Boalt Hall School of Law of the University of California. Craig Seitel Managing Partner and CEO, Abacus Settlements, LLC Prior to joining Abacus Settlements, LLC, Craig served as the Managing Director for the New York office of Allison-Williams Company, an Investment Banking Firm. Before that Craig worked for Oppenheimer Corp. as a Senior Vice President and as a specialty finance banker for new emerging asset types. His primary responsibility was to help finance companies capitalize themselves and design related securitization programs. Craig has also represented the Securities and Exchange Commission as an expert witness for various private placement related disputes and inquiries. Craig graduated with a B.A. in Economics (cum laude) and an M.B.A. from the University of Minnesota. He is currently serves as an Alumni Advisory Board Member for the Carlson School of Management. Craig currently holds series 7, 24, 63 and Life and Health Insurance Licenses. Craig is an avid outdoorsman and tri-athlete. He has completed three Ironman competitions, as well as numerous marathons and other triathlon competitions. Mr. Robert Thompson, Eimi Holdings Mr. Thompson received a Bachelor of Science in Foreign Service (International Politics) from Georgetown University. He began his career at Capital Analysts, a division of Fidelity Mutual Life Insurance, in portfolio and insurance research and then moved to Shearson Lehman in From 1993 to 1999, he worked on the retail wealth management side of Shearson and its successors. His practice focused on providing liquidity strategies and concentrated debt and equity derivative solutions to entrepreneurs and business owners involved in the roll up of several markets. In 1999, Mr. Thompson was recruited to CIBC World Markets to head the Special Transactions Group, an assignment with two core responsibilities (i) delivering tailored solutions to middle market financial sponsors and serial entrepreneurs for various leveraged finance and liquidity needs and (ii) assisting in developing the bridge between CIBC s Leveraged Finance unit and the Oppenheimer Wealth Management unit. In 2003, he joined UBS to focus exclusively on covering the predecessor company of InsCap Management, LLC during the R&D and eventual execution of longevity securitization transactions. Mr. Thompson left UBS to Co-Found InsCap. With more than six years working directly in insurance and mortality securitization and finance, Mr. Thompson until recently headed the InsCap Capital Markets Group directly responsible for the firm s investment banking, structuring and securitization efforts. xiv