How does the manager approach the operational risk within life settlements?
The legislation and licensing and the practical realities of running a life settlement fund means that there will be numerous third parties involved. Investors are dependent upon all of these functions operating properly. Tracking the status of the insured lives, renewing documentation, payment of premiums and other unglamorous functions need to be performed and the Manager needs to ensure that these are monitored and reported on and, where necessary, remedial action is taken. The impact of policies lapsing can be quite dramatic. 9. How are conflicts of interest managed? Some funds may combine certain functions. For instance some managers also provide sourcing services and may have their own internal valuation services. The life settlement market is a new market and specialist providers of such services are not available and so it is neither uncommon nor unethical for such conflicts to exist. It is important, however, that parties involved in the transaction disclose such conflicts and
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