MIB Activity Index-Tick Up In Activity

Medical Information Bureau (MIB) recently reported it's life insurance activity index for December 2010 and summation of 4Q results. December, historically being a high volume month associated with "year end push" in life underwriting departments across the board noted that December 2010 -although reporting a shortfall-was still an improvement over notable market declines experienced over the past 4 years. December closed at -1.2%-all ages combined. Prior years have had an annual decline run rate of -3%, December 2009 -0.2%.

MIB CEO, Lee B. Oliphant, provided further insight into the numbers indicating that 2010's "modest decline demonstrates resilience in the markets compared to the past".

4th Quarter results noted a surge in applicants aged 45-59 (a demographic that has suffered along with the economic decline over the past several years), seniors in the 60+ group continued to drive the market which has been a relatively consistent trend over the past several years.

What does this mean to this blogger? The increase in applicants 45-59 is a stand-out, it reflects that there is a feeling of increased market confidence -no matter how small-keeping in mind that for most individuals life insurance is still considered a "luxury" item, not a necessity.

"The most beautiful thing we can experience is the mysterious. It is the source of all true art and science" Albert Einstein

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Advances in Cardiovascular Treatment - "Silver Bullet" Cure?

Merck pharmaceutical has just released initial clinical trial study results for a new drug that is being touted as having the potential to stop progressive cardiovascular plaque in it's tracks. Associated with a new class of drugs-Anacetrapib is making some waves in the clinical science community. Unlike statin drug therapies, which increase HDL (good cholesterol) levels-assisting in slowing the progression of coronary plaque development, this new drug significantly reduces LDL (plaque causing cholesterol)-essentially removing the risk of plaque development.

The initial trial studied 1,623 heart patients (with known coronary heart disease) for a period of 18 months. The results noted a significant impact on lowering LDL (by 40%) as well as increasing HDL levels (by 138%!).

This all sounds very exciting, and lends to initial thoughts that this may be the "Silver Bullet" in cardiovascular disease that will bump this off the list as the number one (or even top 5) killers in the U.S. However, a number of cautionary notes should be made:

1) This is an extremely small study group over a short period of time. It will take at least another (5) years of study and thousands of trial participants (Merck indicates a pending study of 30,000 global participants) to support initial theory and determine overall efficacy.

2) During this small trial, 8 participants taking the drug required further cardiovascular intervention (bypass and/or angioplasty)

3) LDL levels dropped to extremely low and dangerous levels in 18% of the participants-so they were removed from the study prior to completion.

4) There were a reported 11 deaths for which it is unclear if it was related to abnormally low LDL levels.

5) This is in the same class of drugs which was previously studied- and withdrawn- by Pfizer due to high incidents of heart attacks and deaths.

Lastly, as this underwriter has seen with statin therapies (the wonder drugs of the Millennium) in elderly patients, due to the number of side effects experienced there is always a large percentage of the population that cannot tolerate these drugs. Just think of the most recent pharmaceutical ad you watched on t.v. which always wraps up with the list of potential side effects and it becomes very clear that anything too good to be true, often times comes at a price!

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Major Press Release from Life Expectancy Providers

October 14, 2010- Major Life Expectancy Providers (LEPr) have formed a focus group to provide best practices standards and transparency to the life settlement and longevity markets. Members of the newly formed LEPr focus group were participants in the "Best Practices" committee of the Life Insurance Settlement Association (LISA) and recognized the need to further expand the sope and definition of "best practices" by continuing this effort as an independent group. All major life expectancy providers were invited, and encouraged, to join in this important endeavor. The goal of the LEPr focus group is to provide a comprehensive and consistent set of best practices and performance standards to all longevity markets that may benefit from life expectancy and mortality information. It is also the intent that all major life expectancy providers participate and adhere to our best practices and professional standards.

Life Expectancy underwriting "Best Practices" are based on the principal of full disclosure and transparency in the information and performance results of LE underwriters, while protecting the integrity of their proprietary methodology and practices. Issues that the LEPr focus group are addressing include privacy, fraud, and confidentiality policies as well as comprehensive performance reporting and definitions common to life expectancy providers.

The founding members of the LEPr focus group are Advanced Underwriting Solutions, AVS Underwriting, Examination Management Services Inc., ISC Services, and 21st Services. Once a "Best Practices" document is completed by the LEPr focus group, the document will be presented to the Life Insurance Settlement Association (LISA), Institutional Life Markets Association (ILMA), European Life Insurance Settlement Associations (ELSA), and Bundesverband Vermogensanlagen im Zweitmarkt Lebensversicherungen (BVZL) for acceptatnce and adoption by those organizations. The LEPr focus group will continue to review and refine its best practices as well as provide education opportunities to the longevity and life settlement markets.

The LEPr focus group will initially host an "investors only" educational seminar on December 7, 2010 in New York. The day-long event is intended to open direct channels of dialog with investors to discuss the results of the LEPr's ongoing work. Seminars for providers, brokers and other interested parties will be scheduled in the near future. For further information regarding the Life Expectancy Provider group you are encouraged to contact any of the LE providers participating in this focus group.

Life Settlement Consumer Disclosure-NCOIL Holds the Line

In recent years, life settlement business transactions and ethics have been under intense scrutiny. Some of which has been well deserved, but largely LS was caught up in the failing economy and questionable wall street practices. Unfortunately, the value and intrinsic benefits of LS to seniors was lost in the turmoil. NCOIL may be the start of providing seniors with the ability to take control, once again, of their life insurance assets.

No matter which side of the argument you sit on, at the end of the day each individual should be provided full disclosure of their options so that they can make an informed financial decision. By withholding this information someone will lose, and it will most likely be the consumer.

In an climate that now requires full disclosure on all financial products and transactions, why should life insurance be the one product that is excluded from that? We will all be watching the status of the Consumer Disclosure Model Act in the coming weeks and months to see if NCOIL will ultimately side with consumers in their ability to have all options fully disclosed to them.

"If knowledge can create problems, it is not through ignorance that we can solve them"

Isaac Asimov, 1920-1992

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Mild Cognitive Impairment-Different than Dementia?

Mild cognitive impairment (MCI) has been on the rise as a "diagnosis" in the medical records being reviewed on senior market insurance applications and settlements. On the life side, this is causing increased challenges in getting policies approved by underwriting, and hence increased frustrations at the broker level. Brokers by and large are under the impression that these are merely typical, age related changes and underwriters have the belief that this is early stage dementia-They are both correct! On the settlement side, this is often the cause of unwarranted aggressive life expectancy estimations, a problem for the investor. Here are some insights to help both sides successfully navigate through this impairment.

According to the AGS (American Geriatrics Society); MCI is the intermediate stage between cognitive changes of normal aging and dementia. Although MCI typically shows up years prior to a formal diagnosis of dementia, and there is some increased risk of MCI progressing to dementia, it is not a definitive measure for development of dementia. Approximately 12% of those over the age of 70 that have MCI are3-4 times more likely to develop AD (Alzheimer's Disease).

Mayo clinic developed a general criteria utilized for the identification of MCI: 1) Self reported memory complaints, 2) Objective memory impairment, 3) Preserved general cognitive function, 4) Intact activities of daily living (ADL), 5) Not meeting criteria for dementia.

In the thousands of senior medical records reviews I have completed over the years, it is important to really evaluate the symptoms and patient presentation when the AP (attending physician) has indicated MCI. I have found a number of instances when all criteria have not been met yet the AP indicates this as a diagnosis-always troublesome for the underwriter to make the appropriate assessment yet retain case documentation that will not haunt them on future underwriting audits!

It is clear, based upon the research to date, that MCI is a risk factor for dementia, much the same as hyperlipidemia is a risk factor for coronary artery disease. As such, it would be reasonable to expect a mild rating, but declinations of insurance based upon this single factor would be unwarranted.

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Life Insurance vs. Settlement Indices-July 2010

Medical Information Bureau (MIB) released results of July 2010 activity reflecting life insurance applications entering the market. For a second month in a row, there was a notable decline in applications of -3.9%. It is important to note that although this is following declines in June, these declines are consistent with the cycle of business that is "historically" typical during the summer months.

Applications on Senior ages continues an upward tick. Ages 60+ noted a +7% increase , year-over-year.

Life settlement trends, provided by Amrita Financial noted a stable level compared to June 2010. The index posted 460 points for July.

As there continues to be a trend towards senior market applications and settlements, it's becoming even more critical that the underwriters utilized to evaluate the risks associated with seniors are specialized and experienced. AUS, Inc. -Founded and managed by Senior Market Underwriting Consultants

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Diabetic Miracle Drug and Acute Heart Attacks!

A common drug utilized for control of Type II diabetics, Avandia, was recently brought before an FDA panel of experts to evaluate the potential risk of increased cardiac incidents and death. The concerns with the drug date back to 2005 when the FDA requested that the product manufacturer (Glaxo) conduct a meta-analysis of the drug effects due to mounting concerns related to increased cardiac risk. The analysis presented to the FDA did indicate increased risk of acute coronary events. The FDA then completed it's own analysis which concurred with the Glaxo results and a boxed warning was applied.

The issue was again brought before the FDA this past week by a Dr. Steven Nissen-cardiologist at the Cleveland Clinic. Dr. Nissen completed his own study, based upon more than 35,000 patients and a combined 56 studies, Dr. Nissen's findings indicated troubling incidences of increased cardiac risk and death associated with the use of this drug. His findings indicated a 28-39 % increased risk of cardiac incidences in otherwise healthy patients. Younger patients were found to have excessive myocardial infarction events and older patients had increased cardiac death.

Amazingly, the FDA expert panel decided against pulling the drug from the market -even in light of the compelling study details outlined by Dr. Nissen. The final voting tally noted the following; (13) votes for pulling the drug from the market ; (17) votes for increased label warnings and possible usage restrictions; (3) voted against any changes.

I would suspect that this will not be the last time we hear about issues with this drug. Glaxo has apparently paid out a number of settlement fees to individuals and families that have been impacted by the drug effects-however, this is the most financially lucrative medication for that company so it is doubtful that they allow removal of this drug from the market without a tremendous fight. After all, drug companies are in the market to make money, not save lives....Right?

"Perhaps better we not obscure the idea that happiness and misery, kindness and greed, and good works and bad deeds are in the capacities of us all, not merely a select few"

David P. Mikkelson, snopes.com, September 8, 2003

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