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Priority Life Newsletter October 17th

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					                                                                                     October 2011, Issue 2

          Priority Life Newsletter: October 17th
                                                                 Grandma’s Pumpkin Fudge
                                                                 Ingredients:
                                                                 2 cups sugar
                                                                 ½ cup pureed cooked pumpkin
                                                                 ½ cup evaporated milk
                                                                 ¼ teaspoon cornstarch
                                                                 ¼ teaspoon pumpkin pie spice
                                                                 ¼ cup butter
                                                                 ½ teaspoon vanilla
                                                                 1 cup chopped nuts

                                                                 Directions:
                                                                 1. Combine sugar, pumpkin, milk,
                                                                 cornstarch and spice in a medium
Imperial’s Raid Not Related to Life Settlements Busi-            saucepan. Bring to a boil over
ness September 29th, 2011 In response to an FBI raid that        high, then reduce to a gentle sim-
took place on September 27th, 2011, Imperial Holdings,           mer. Cook until it forms a soft ball
Inc.’s Board of Directors formed a special committee to          when dropped in cold water, or
conduct an independent investigation in connection with          until reaches 236°F. Remove from
the. (Continued on Page 2.)                                      heat

Pennsylvania Court Decision, Another Victory for Life             2. Add the nuts, butter, and va-
Settlements. October 12, 2011 A federal court decision           nilla; beat until mixture is creamy.
in Pennsylvania has notched a win for life settlement in-
vestors, deflating carriers’ argument...(Continued on Page        3. Pour into a buttered plate and
2.)                                                              allow to cool. Cut into small chunks
                                                                 and serve.
Assets Under Management increase dramatically for
Managing Partners Limited. October 12, 2011 The net
asset value of the firm’s Traded Policies Fund has risen from
$126.6m (£81m) in September 2010 to $176.9m (£113.1m) in
September 2011 – an increase of nearly 40 per cent.(Contin-
ued on page 3.)

Top LE Providers Form Best Practices Focus Group
October 1, 2011 Four life expectancy firms in the life          This is a publicaton by Priority Life Holdings,
settlement market formed a focus group to further refine        Inc., located at 4040 Lake Washington Blvd.
best practices to guide their profession (Continued on          Suite305, Kirkland, WA 98033. For more in-
Page 4.)                                                        formation please call (425) 952-6311. This
                                                                report is for informational purposes only and
                                                                is not a recommendation to trade securities in
                                                                the companies mentioned in this newsletter.
                                                                             October 2011, Issue 1

       Priority Life Newsletter: October 17th
Imperial’s Raid Not Related to Life                     its Chairman and Chief Executive
Settlements Business                            Officer, President and Chief Operating Of-
                                                ficer, its Chief Financial Officer and Chief
Septermber 29th, 2011                           Credit Officer, its Director of Finance and
        In response to an FBI raid that took    Accounting, the members of its Board of
place on September 27th, 2011, Imperial         Directors who signed the Company’s reg-
Holdings, Inc.’s Board of Directors formed      istration statement, and the underwriters
a special committee to conduct an inde-         of the Company’s initial public offering al-
pendent investigation in connection with        leging certain violations of the Securities
the U.S. Attorney’s Office for the District     Act of 1933, as amended. The Company
of New Hampshire’s investigation of the         and its directors and officers named as
Company’s life finance business (the “gov-      defendants intend to vigorously defend
ernment investigation”). The special com-       against this claim.
mittee is comprised of all of the Compa-
ny’s independent directors and is chaired       Pennsylvania Court Decision, Another
by Walter M. Higgins III. The special com-
                                                Victory for Life Settlements.
mittee has retained the law firm of Dewey
& LeBoeuf LLP to assist it in carrying out
                                                October 11th, 2011
its investigation. Separately, the Compa-
                                                              A federal court decision in
ny has retained the law firm of Latham &
                                                Pennsylvania has notched a win for life
Watkins LLP to represent the Company in
                                                settlement investors, deflating carriers’
the government investigation. The Com-
                                                argument against it being permissible for
pany has been informed that the focus of
                                                an insured person to apply for a life settle-
the government investigation concerns its
                                                ment with the express intent to sell it to a
premium finance loan business and that
                                                third party. In a suit filed by Principal Life
federal investigators are not looking into
                                                Insurance Co. against brothers Matthew
the Company’s Structured Settlements
                                                and Mark DeRose, trustees of their moth-
business segment or the Company’s ac-
                                                er’s family trust, Judge Christopher C. Con-
tivities as a life settlement provider in its
                                                ner of the U.S. District Court for the Middle
Life Finance business segment.
                                                District of Pennsylvania in Harrisburg ruled
                                                that under state statute, insurable interest
Although the Company has not yet been
                                                is determined solely based on the relation-
served with any complaint, the Company
                                                ship between the insured person and the
has learned that on September 29, 2011,
                                                policy beneficiary.
a putative securities class action com-
plaint was filed in the Circuit Court of the
                                                State laws don’t refer to the “intent of the
15th Judicial Circuit in and for Palm Beach
                                                parties” at the time coverage begins, nor
County, Florida entitled Martin J. Fuller v.
                                                does it require that the transfer of a policy
Imperial Holdings, Inc., et al., against the
                                                must be in “good faith,” the judge wrote in
Company,
                                                his Oct. 5 ruling. That finding on “intent”

                                                                                       Page 2.
                                                                              October 2011, Issue 1

       Priority Life Newsletter: October 17th
is similar to recent rulings made in Dela-         (£113.1m) in September 2011 – an in-
ware State Supreme Court (PHL Variable           crease of nearly 40 per cent. Mr. Leach
Insurance Co. v. Price Dawe 2006 Insur-          said in the same period the fund generat-
ance Trust) and in the New York Court of         ed $40.5m (£25.9m) of new subscriptions
Appeals (Alice Kramer vs. Phoenix Life In-       from investors in the UK, Europe and Asia.
surance Co., Lincoln Life & Annuity Co. of       He added that an extra 1 per cent com-
New York).                                       mission enhancement was still on offer to
                                                 advisers – or investment enhancement for
       The fact that several courts have al-     clients – on new investments into its Trad-
ready rejected the “intent” argument could       ed Policies Fund between 13 October and
shape the outcome of other stranger-orig-        12 November.
inated-life-insurance lawsuits filed by car-
riers which claim that an insured person               Russell Golledge, IFA with Essex-
applied for a policy with a plan to sell it to   based DG Financial Services, said: “I
an investor in the secondary market, law-        would agree that traded life policies are an
yers say. “There aren’t any states that out-     uncorrelated asset class and people can
right address intent; all of the statutes are    benefit from this within a diverse portfolio.
within three or four degrees of everyone         There are people who need the income
else’s,” said Jule Rousseau, partner with        stream from these and, likewise, there are
Arent Fox LLP. “These decisions are really       many sellers of these policies who need
coming together to build a body of law.”         the money rather than the policy. We have
                                                 never really been asked about the ‘death
Assets Under Management increase                 fund’ side of it, only about the safety of it
dramatically for Managing Partners               and the potential returns.”
Limited.

October 12, 2011                                        MPL’s Traded Policy Fund was
Jeremy Leach, managing director of Man-          launched in 2004 and by using prudent
aging Partners Limited, said: “The govern-       actuarial analysis to invest in a diversi-
ment debt crises on both sides of the Atlan-     fied portfolio of life settlements, it has de-
tic have spooked investors. Commodities          livered returns of 8-10% per annum. Life
are being seen as a store of value but trad-     settlements are US-issued, whole of life
ed life policies offer steady, incremental       assurance policies sold before the matu-
returns irrespective of what is happening        rity date to allow the original owner to en-
in financial markets and that is highly at-      joy some of the benefits during their life-
tractive to investors.”                          time. MPL has also now created a Ringgit
                                                 share class for the Malaysian market. The
     The net asset value of the firm’s Trad-     longest-running share class in the fund,
ed Policies Fund has risen from $126.6m          the US dollar Institutional, was launched
(£81m) in September 2010 to $176.9m              on 30 June 2004 and has returned 83.98%
                                                 net of charges over the seven years from
                                                 launch to 1 August 2011.
                                                                                         Page 3.
                                                                                      October 2011, Issue 1

       Priority Life Newsletter: October 17th
Top LE Providers Form Best Practices                   It was not clear specifically what ar-
Focus Group                                     eas of best practices that the group wants
                                                to expand. Kevin Malone, president of un-
October 1, 2011                                 derwriting services for EMSI, who sent
       Four life expectancy firms in the life   the group’s statement to The Life Settle-
settlement market formed a focus group          ments Wire, said he could not elaborate at
to further refine best practices to guide       this time. Fasano said as an officer and
their profession, although one major life       board member of LISA, he didn’t believe
expectancy firm, Fasano Associates, is          it was appropriate to participate. He said
not participating. A statement issued by        LISA’s previous effort, which began two
the group today said founding members           years ago, was “responsive to everyone’s
of Major Life Expectancy Providers (LEPr)       concerns.” His committee put out best
are Advanced Underwriting Solutions, AVS        practices guidelines a year ago and then
Underwriting, Examination Management            published a common mortality table of ac-
Services (EMSI), ISC Services and 21st          tual-to-expected results of life expectancy
Services. Advanced Underwriting merged          providers at LISA’s spring conference ear-
last week with EMSI.                            lier this year. The table was intended to
The life expectancy firms were members          help investors compare life expectancy
of a previous Life Insurance Settlement         estimates among various underwriters.
Association (LISA) Best Practices Commit-       He said four of six life expectancy under-
tee, which was headed by Mike Fasano,           writers supported the table at the time,
president of Fasano Associates, based in        adding that 21st Services dissented while
Washington, D.C.                                ISC Services abstained originally but then
                                                changed its vote and dissented.
        The new group said it “recognized
the need to further expand the scope and
definition of ‘best practices’ by continuing
this effort as an independent group.” It said
all life expectancy providers in the market
were invited to join. “The goal of the LEPr
focus group is to provide a comprehen-
sive and consistent set of best practices
and performance standards to all longev-
ity markets that may benefit from life ex-            This is a publicaton by Priority Life Holdings,
                                                      Inc., located at 4040 Lake Washington Blvd.
pectancy and mortality information,” the
                                                      Suite305, Kirkland, WA 98033. For more in-
group said in a statement. “It is also the            formation please call (425) 952-6311. This
intent that all major life expectancy pro-            report is for informational purposes only and
viders participate and adhere to our best             is not a recommendation to trade securities in
practices and professional standards.”                the companies mentioned in this newsletter.
 life settlement industry.


                                                                                                    Page 4.

				
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