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ModeratorDonna HorowitzSenior Editor, Life SettlementsThe Deal

Expert PanelDaniel YoungVice President, Portfolio ManagementVida Capital

Expert PanelJule RousseauPartnerArent Fox

Life settlements - Secondary Market

Daniel YoungVice President, Portfolio Management

Vida Capital

Dan Young – President of Magna Life Settlements, Inc.

• Magna was the Number One Provider in Industry in 2013• Closed Most Face Value and Deployed Most Capital

• Sees Large Policy Flow in Secondary Market

• Mix of Captive Capital and Third Party Funding Sources• Owned by Vida Capital, Inc.

• Consistent Capital and Execution

• Diverse Buy Boxes

• Due Diligence and Execution

Secondary Market

Secondary Market Advantages

• Consistent Flow

• Consistent Pricing

• Control Closing Process

• Barriers to Entry

• Policy by Policy Selection

• Insured Involvement in Process

Secondary Market

Policy Supply

• Quantity Down but Quality Up• Average Issue Dates Prior to 2003• Average Age Over 75 Years Old• Average LE Less than 140 Months• Average Face Less than $5MM• More Policy Owner Awareness

Policy Demand

• Low Correlation• Increased Regulation• Attractive Policy Pricing• Improved LE Accuracy

Secondary Market

Life Expectancy reports and face amount are not the only variables to consider for valuation of policies

• Other Important Factors• Underwriting Class of Insured

• Premiums

• Maturity Extension Rider

• No Lapse Guarantee

• Break Even Analysis

• Policy Origination

Secondary Market

CURRENT DEVELOPMENTS IN LITIGATION

Jule RousseauPartner

Arent Fox

Current Developments in Litigation

Brasner trial court decision— good faith required, challenge after 2 years (Pruco Life Ins. Co. v. Brasner, No. 08-cv-80804, D.E. 246 (S.D. Fla. Nov. 14, 2011); Pruco Life Ins. Co. v. U.S. Bank, 2013 WL 4496506 (S.D. Fla. Aug. 20, 2013))

Cotton trial on good faith—impossible task (Sciarretta v. Lincoln Nat. Life Ins. Co., No. 08-cv-80427, D.E. 150 (S.D. Fla. Mar. 2, 2012))

Appeals now in 11th Circuit (Oral argument in Brasner scheduled for September 10, 2014)

Discussion Points: FL Stat on property/life, prior cases, and leading 11th Cir decision

Florida law—what can we expect?

Current Developments in Litigation

U.S. v. Binday, et al., No. 12-CR-00152 (S.D.N.Y.) Issues raised for investors on cases? Impact on market – Is this a new blemish? Carrier truths about STOLI admitted in evidence;

will courts ignore it as this court did?

NY Federal Court criminal case—agents perpetrating STOLI

Current Developments in Litigation

Status -- Lima LS PLC v. PHL Variable Ins. Co. et al., No. 12-cv-01122 (D. Conn.); U.S. Bank, N.A. v. PHL Variable Ins. Co., et al., No. 13-cv-01580 (S.D.N.Y.)

Relevance to other carriers Aggressive pursuit of agents for chargebacks

Phoenix cases—COI, RICO

Current Developments in Litigation

9th Cir decisions (Wells Fargo Bank, N.A. v. American Nat. Ins. Co., 438 Fed.Appx. 838 (9th Cir. 2012); Hartford Life and Annuity Ins. Co. v. Barnes, 552 Fed.Appx 664 (9th Cir. 2014))

Fishman remains (Lincoln Nat. Life Ins. Co. v. Fishman, 638 F. Supp.2d 1170 (C.D. Cal. 2009)), Teren provides comfort (Lincoln Life & Annuity Co. of N.Y. v. Berck, 2011 WL 1878855 (Cal.App. May 17, 2011))

California law—developments in last year

Question and Answer Session

Donna HorowitzSenior Editor, Life Settlements

The Deal

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