Current Environment
Premium financing arrangements are currently under intense pressure. Lenders often obtain capital from hedge funds and private sources, which are particularly sensitive to convulsions in the credit markets. Many lenders have ceased financing or added substantial fees to new programs. In-force financed policies are being called for collateral in large numbers. Clients who are "underwater," where the loan balance exceeds the policy cash value, are being forced to post additional collateral at low risk-weighted rates and/or surrender the policies and pay the outstanding loan balance out of pocket. Additionally, several carriers who were active in the financing marketplace have been downgraded, causing large-scale exchanges or surrenders from in-force policies.
Hybrid arrangements that planned for a settlement exit are also coming undone. Settlement investors are severely discounting financed policies, especially from carriers with falling credit ratings.
Read more about this topic: Premium Financing
Famous quotes containing the words current and/or environment:
“Phlebas the Phoenician, a fortnight dead,
Forgot the cry of gulls, and the deep sea swell
And the profit and loss.
A current under sea
Picked his bones in whispers. As he rose and fell
He passed the stages of his age and youth
Entering the whirlpool.”
—T.S. (Thomas Stearns)
“People between twenty and forty are not sympathetic. The child has the capacity to do but it can’t know. It only knows when it is no longer able to do—after forty. Between twenty and forty the will of the child to do gets stronger, more dangerous, but it has not begun to learn to know yet. Since his capacity to do is forced into channels of evil through environment and pressures, man is strong before he is moral. The world’s anguish is caused by people between twenty and forty.”
—William Faulkner (1897–1962)