Universal Settlements International Inc.

Core Competencies

Core Strengths of Universal

Sourcing of Policies

Asset and policy acquisition capability is a key competence. Life insurance policy assets are sourced strictly from senior citizens residing in the US. Universal is fully versed with the different licensing requirements of each state and has established long-standing relationships with reputable, licensed life settlement broker firms throughout the US who have met these requirements, thus ensuring that Universal can fulfill all its sourcing and acquisition needs in a fully compliant manner. These policy brokers have established credibility with Universal and have demonstrated that they conduct themselves in accordance with applicable regulations and with the integrity which Universal demands. This policy broker network provides a large quantity of policies to Universal for review through a technology infrastructure which permits secure access to sensitive and confidential policy information, a necessity given current privacy laws.

Policy Purchasing and Contracting

The secondary market determines the price paid for the policy. Universal utilizes proprietary software to calculate the amount that it can pay for a policy based on a formula which incorporates the return that a purchaser can expect based on market conditions, broker commissions, face value of the policy, premiums, Universal’s fee and transaction costs. A key component of the pricing process is the determination of the amount of premiums needed to keep a purchased policy “in force” over the life of the insured. It is critical that these calculations be as accurate as possible to avoid overpayment or underpayment of premiums. Overpayment can result in reduced returns to the investor since the excess premiums may not be recaptured when the death benefit is collected, while underpayment can result in the policy lapsing. The goal is to minimize the premiums paid to an insurance company, while returning the most money back to investors, a process known as “premium optimization”.

Given a purchaser’s commitment to purchase a particular policy, the purchaser must place appropriate funds into escrow with an independent Trustee. These funds will only be disbursed upon completion of the due diligence process and execution of all necessary contracts. Universal will prepare and deliver the Life Settlement Contract and a number of other supporting documents which must be completed by the insured person (and owner of the policy, if different) and executed by both parties to the agreements. Upon Universal’s receipt of all executed and notarized contracts and documents, the due diligence process begins. Once Universal has completed this process, Ownership and Beneficiary Change Forms are submitted to the insurance company so that it may officially record Universal, the purchaser or their Trust (as the case may be), as the new Owner and Beneficiary.

Upon Universal receiving confirmation from the insurance company that Ownership and Beneficiary Changes have been recorded, the Trustee confirms that all documentation is in order and only then disburses purchaser funds, thus completing the purchase of the policy.

Underwriting of Policies

Universal utilizes the knowledge of a variety of industry professionals working within the medical, insurance, rating agency, accounting and mathematical fields to aid it in its complete review of each policy that meets the investment criteria of the purchaser.

Upon finding a suitable policy which fits within the purchaser’s parameters, Universal requests one or more life expectancy evaluations from qualified life expectancy underwriters. Universal also requests a VOC from the insurance company, which is used to establish that the policy is in force and good standing. Policy illustrations are obtained from the insurance company through the policy broker. Universal requires several such illustrations to achieve a clear understanding of the premium ramifications given different mortality assumptions. For each policy under review, Universal would require the life expectancy duration, a 5 year, a 10 year and a maturity (to age 100) illustration, at a minimum. This information is necessary for a premium optimization analysis, which entails assessing the potential premium outlays and cash value scenarios associated with a given policy. Universal conducts an extensive review of the policy itself, specifically focusing on the aspects of anti-fraud underwriting and contestability and also assesses the insured individual’s state of health at the time that the insurance policy was originally purchased from the insurance company.

Administration and Back-Office Structure

Universal ensures timely premium payments and optimizes the amount of premiums needed to maintain each policy on an as-needed basis. Typically, clients are made aware of the need to make a premium payment at least 60 days in advance of a premium payment being due. Universal routinely performs cash-value analyses and obtains VOC forms as needed. Universal regularly reports to clients as to the status of their portfolios.

Tracking and Monitoring Services

Universal utilizes an internal tracking protocol, through which the status of each insured person is monitored. This involves maintaining direct personal contact with each insured person quarterly at a minimum. In addition, Universal utilizes a proprietary database system in conjunction with several online and offline database services which are designed to inform Universal at the time of a liquidity event through a policy maturity.

Death Claims Processing

Once Universal determines that a policy has matured, a death certificate is procured through appropriate channels. At the time of sale, the insured agreed to have his estate provide this certificate to Universal, but there are several other available avenues through which this certificate can be obtained. Universal then completes the death claim forms on behalf of the purchaser and sends them to the Trustee to submit to the insurance company for processing. Once processed, the insurance company pays the death claim proceeds to the listed beneficiary of record directly.


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