September 6, 2009

Insurance Securitization and how it might affect cures to any fatal diseases

This post is big time speculation/prediction without any facts to back it up, really. This is, at this point of time, a flight of imagination on how conflicts of interest can develop for investors who invest in life insurance settlement policies etc.

Refer to this article on NY Times and then read comments (italics) below in context:

"Enter life settlement companies. Depending on various factors, they will pay 20 to 200 percent more than the surrender value an insurer would pay."
but this will obviously be much less than the policy benefit value. but the reporter does not even mention that.

Another quote: "That is because if too many people with leukemia are in the securitization portfolio, and a cure is developed, the value of the bond would plummet."
Using my complex math models, I can predict that investors in this class of assets will be against healthcare advances curing diseases like leukameia, cancer, etc - ie many fatal diseases. I think I will now repeat my comment: Welcome to a new class of private death panels, it used to be just insurers, but now wall st investors also join that group.

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