Policy Evaluation
Acquiring a life settlement requires interaction between many different entities.
Managing all of the relationships in the acquisition path is a full-time job in
itself and frequently leaves little time to focus on the characteristics of the
policy.
Our policy evaluation service lightens the burden of data management and interpretation
by providing you with a detailed report on the characteristics of a policy. First,
we conduct a qualitative evaluation of the policy, reviewing its key information
against objective criteria established by you. Your criteria might include limits
on the maximum and minimum face amount for the policy and a minimum attained age
for the insured. You may also want to ensure that you have up-to-date information
on the policy, so you might ask us to check the date of illustrations and life expectancy
reports as part of this process.
Second, we conduct a quantitative evaluation of the policy. Our analysts enter the
policy information into a valuation model selected by you - subject to specific
licensing terms for the chosen model, you can pick from a number of models developed
by ClearLife and others, including the single policy pricing model developed by
Milliman, Inc. and the LE*SETTLEWARE™ model developed by Lewis & Ellis. Alternatively,
you can provide us with your own preferred pricing model, which we will be happy
to deploy for use only with your cases.
Our analysts set up the chosen model in accordance with a valuation template which
is specified by you. The valuation template includes such information as the blending
of life expectancy information from multiple underwriters, the maintenance of minimum
balances in account value and cash surrender value and the base mortality table
to be used in generating a specific mortality curve for each insured life. Once
the chosen valuation model has been set up in accordance with the your valuation
template, our analysts produce projected valuations for the policy based upon your
targeted internal rates of return. If you are using ClearLife's pricing model,
you may also wish to receive specific risk information on the policy, including
an assessment of its extension risk.
Once the qualitative and quantitative evaluations are complete, we prepare a Policy
Evaluation Statement which is delivered to you through ClariNet™. The Policy Evaluation
Statement summarizes our findings from the qualitative and quantitative evaluations
and provides you with the means to engage in informed discussions on the policy
with other participants in the transaction.