tag:blogger.com,1999:blog-6775601543504931076.post1235295886043123255..comments2023-10-23T10:48:21.362-07:00Comments on Red Lion Reports: The Worth of a LifeMarie T. Reillyhttp://www.blogger.com/profile/04697870656185092759noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-6775601543504931076.post-36558230528390766862008-01-24T06:20:00.000-08:002008-01-24T06:20:00.000-08:00Let's compare the amount of cases where a spouse o...Let's compare the amount of cases where a spouse or a family member has murdered the insured versus investors who purchased life insurance policies for their portfolios. You'll find that the people you trust...are more likely to kill you!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6775601543504931076.post-22475310457615541622008-01-24T06:03:00.000-08:002008-01-24T06:03:00.000-08:00Hi Kelly, Again, well stated. For me, though, thi...Hi Kelly, <BR/><BR/>Again, well stated. For me, though, this is a policy question. That is, notwithstanding the current state of the law, I am not sure the policy follows for allowing the pooling of life insurance as securities. As you noted, "The third party who purchased the policy then pools those rights together with similar rights obtained by purchasing other life policies. He 'securitizes' the pool . . . ."<BR/><BR/>If "the general logic is you would not select an individual to sell to who was likely to kill you," why should we allow the person you trusted to then select someone (actually, anyone) else. As soon as the resale of the interest kicks in, it seems to me any peace of mind that might have existed starts to fade. I suppose the anonymity of the pooled securities would be some protection, but to what extent I am not sure. <BR/><BR/>You certainly have laid out the arguments well, but it seems to me that once resale of the interest as a pooled security is permitted, the process is more like dead pooling than it is merely allowing an insured an early cash out. I see the argument for why it's not, but I still can't seem to get around my paternalistic view of this. It just doesn't smell right to me.Josh Fersheehttps://www.blogger.com/profile/05494091852720905089noreply@blogger.comtag:blogger.com,1999:blog-6775601543504931076.post-3621090101853046822008-01-23T21:56:00.000-08:002008-01-23T21:56:00.000-08:00Hi, Prof. Fershee, The difference is the insurable...Hi, Prof. Fershee, <BR/><BR/>The difference is the insurable interest laws. It goes back to England and the practice of "dead pooling," some gamers would become impatient and take matters into their own hands to bring about the early demise of the life bet upon. Insurable interest says that you may not *purchase* a policy on the life of an individual that you do not have an insurable interest in. In other words, unless that person is worth more to you alive than dead, we don't want to let you purchase an interest in their death. However, an individual may decide to *sell their interest* in a policy to someone lacking insurable interest, the general logic is you would not select an individual to sell to who was likely to kill you. The government will let you decide in whose hands you want to put your life. If you think about it, it functions in the same manner as selecting a beneficiary. A beneficiary need not have insurable interest, for the same reason. As an insured, I could designate anyone I wanted as the beneficiary in my policy, with the presumption again that I would not choose to designate as beneficiary someone who would kill me. <BR/><BR/>Of course, one might ask, why this restriction is necessary at all given the slayer statutes in most jurisdictions. If I kill someone, the law (based upon principles in equity) will not allow me to profit on account of my wrongdoing. But I suppose the answer is that it doesn't hurt. Insurable interest restricts the world at large from wagering on my life - and that's peace of mind.Kelly Joyhttps://www.blogger.com/profile/07576564623143850806noreply@blogger.comtag:blogger.com,1999:blog-6775601543504931076.post-28328649959597516002008-01-23T19:48:00.000-08:002008-01-23T19:48:00.000-08:00Great post. I have to say, insurance has always f...Great post. I have to say, insurance has always fascinated me, but merging insurance and securities is just plain nuts (okay, I don't get out much). <BR/><BR/>If we are going to allow such things, should we also allow taking out insurance on people we don't know? In essence, why not securitize a dead pool? See, e.g., <A HREF="url" REL="nofollow">http://stiffs.com/</A>. Vegas would have nothing on it.Josh Fersheehttps://www.blogger.com/profile/05494091852720905089noreply@blogger.comtag:blogger.com,1999:blog-6775601543504931076.post-77639205042887381212008-01-23T13:51:00.000-08:002008-01-23T13:51:00.000-08:00Who's rockin' now? Thanks for a provocative post ...Who's rockin' now? <BR/><BR/>Thanks for a provocative post and an glimpse of one of the thousands of fun things you can do with a first rate legal education!Marie T. Reillyhttps://www.blogger.com/profile/04697870656185092759noreply@blogger.com