SOURCE: Life Insurance Settlement Association

Life Insurance Settlement Association

May 17, 2011 08:35 ET

United States Senator Bob Casey Addresses Life Insurance Settlement Association at 17th Annual Spring Conference

Senator Releases Letter to Treasury Secretary Geithner Requesting Clarification of IRS Revenue Rulings Affecting Life Settlements

ORLANDO, FL--(Marketwire - May 17, 2011) - The Life Insurance Settlement Association (LISA) recently completed its 17th Annual Spring Conference, held in Washington, DC and was pleased to host United States Senator Bob Casey, Jr. (Pennsylvania) as a keynote speaker. LISA was host to more than 225 attendees, which included LISA members, investors in the secondary market and many other interested parties. Senator Casey spoke on several hot topic issues, including the federal budget and current international events.

In addressing conference participants, Senator Casey released a letter that he and US Senator Pat Toomey (Pennsylvania) recently delivered to United States Treasury Secretary Timothy Geithner raising concerns about the federal tax treatment for the sale and purchase of life insurance policies. The letter, portions of which were read to the audience by Senator Casey, criticizes two Internal Revenue Service rulings affecting the secondary market for life insurance.

LISA Executive Director Darwin Bayston commented, "We were honored to have Senator Casey speak to our members and extremely grateful for his interest in our issues. We will continue to support Senator Casey and Senator Toomey in their efforts to bring clarity for all participants in life settlements -- consumers, life settlement companies and investors."

In 2009, the IRS issued Revenue Ruling 2009-13 and 2009-14 related to life settlements, which were intended to guide taxpayers who sell or purchase life insurance policies in calculating their tax exposure in such transactions. The Casey/Toomey letter questions whether "the revenue rulings, rather than providing clear guidance, may have created confusion in the marketplace."

Reading from the letter, Senator Casey told that audience that "Revenue Ruling 2009-13 imposes a different standard on the sale of a life insurance policy to a third party than what is imposed on a sale to the issuer in the form of a surrender," and thus, "as a result, a policy owner would face the same tax consequences upon surrender but different tax consequences upon a sale." The Senators also addressed the tax treatment for purchasers of life insurance, stating that Revenue Ruling 2009-14 "imposes disparate tax consequences on owners of policies purchased in life settlements" that may "lead to inefficiencies in the life settlement market."

A life settlement is the sale of an existing life insurance policy to a third party buyer for an amount that, on average is 4-5 times greater than more than the cash surrender value in the policy. Life settlements are highly regulated and maximize the value of life insurance in the hands of policyowners.

About LISA

Established in 1994, the Life Insurance Settlement Association is the oldest and largest trade organization in the industry. Its goal is to promote the development, integrity, and reputation of the life settlement industry, and to promote a competitive market for the people it serves. LISA represents over 110 members with a wide variety of interests in the industry. For more about the association, visit

Contact Information

  • Contact:

    Darwin Bayston
    Executive Director
    Email: Email Contact
    Ph: (407) 894-3797