FORT
WASHINGTON, Pa., May 8, 2024
/PRNewswire/ -- Coventry today released the results of an internal
review that found life expectancy estimates issued by Lapetus
Solutions, Inc. are consistently and materially shorter than those
issued by other life expectancy providers, potentially leading to
the overvaluation of life insurance policies and investor losses.
The results cast doubt on the accuracy of asset valuations based
primarily on Lapetus life expectancies.
After reviewing thousands of Lapetus life expectancy
estimates, Coventry found that they are shorter than other leading
life expectancy providers 85% of the time when comparing the same
individuals. This suggests that their use of a general population
base mortality table (rather than an insured population base
mortality table) for life settlement underwriting contributes to
their significantly shorter life expectancy estimates. A general
population table is typically not used for these valuations because
insured individuals over 65—those underwritten in any life
settlement transaction—have average life expectancies more than
three years longer than the general population. Study details are
available at: coventry.com/research.
Coventry believes the impact on investors could be substantial
and highly consequential. The insured's life expectancy is the
single most important factor when determining the value of a life
settlement.
When inaccurately short life expectancies cause such assets to
be overvalued, it sets the stage for liquidity issues and potential
investor losses. Indeed, there are numerous examples of significant
life settlement losses arising from faulty life expectancies.
"It is essential for the integrity of the market and the welfare
of investors that life expectancy providers use best practices and
issue reliable estimates," said Alan Buerger, Coventry's
Executive Chairman. "As a licensed life settlement provider, we are
committed to upholding industry regulations and guidelines to
maintain credibility and protect stakeholders."
Coventry is the leader and creator of the secondary market for
life insurance. For more than 25 years, we have been driving the
industry forward and expanding opportunities for life
insurance policyowners. Coventry's deep experience combined
with a fierce commitment to consumer rights makes Coventry the
clear market leader, a position we use to raise industry standards
and expand consumer choice. To date, we have delivered more than
$5.4 billion to policyowners who no
longer need their policies. To learn more about Coventry, please
visit Coventry.com.
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SOURCE Coventry