Method and system for life settlement and life insurance contracts securitization involving asset and liability stripping

• US 7,533,045 B1
• Filed: 08/13/2003
• Issued: 05/12/2009
• Est. Priority Date: 08/13/2003
• Status: Active Grant

• Current Assignee: JJS IP Holdings LLC
• Original Assignee: JJS IP Holdings LLC
• Inventors: Shapiro, Steven M., Lewis, Jonathan M., Lange, Jeffrey S.
• Primary Examiner(s): Cheung; Mary
• Assistant Examiner(s): Fertig; Brian
• Application Number:
  US10/640,124
• Time in Patent Office: 2,099 Days
• Field of Search: 705/36.R, 705/1, 705/35, 708130-131, 708/160, 713 39- 41
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

One embodiment of the present invention provides a means of securitization of life settlement contracts using a method of stripping the death benefit asset from the premium liabilities by producing a Stripped Collateralized Life Settlement Obligation. Another embodiment of the present invention provides a means of securitizing life insurance contracts using a method of stripping the death benefit asset from the premium liabilities by producing a Stripped Collateralized Life Insurance Obligation.

Claims

1. A method implemented by a programmed computer system comprising the steps of:

a) acquiring a plurality of life settlement contracts, wherein each life settlement contract has associated therewith at least one underlying insurance policy, and each underlying insurance policy has associated therewith at least one death benefit asset and at least one premium payment obligation;

b) stripping the death benefit asset from each underlying life insurance policy;

c) stripping the premium payment obligation from each underlying life insurance policy;

d) providing at least a first new security comprising the stripped death benefit asset and excluding the stripped premium payment obligation;

e) calculating on the computer system a value of the stripped death benefit assets; and

f) recording on the computer system information relating to the calculated value of the stripped death benefit assets so as to compile tax and accounting information.

2. The method of claim 1, wherein the acquired life insurance settlement contracts are transferred or assigned into at least one of a special purpose corporation, limited partnership, limited liability company, or other legal entity.

3. The method of claim 1, further comprising providing at least a second new security comprising the stripped premium payment obligation and excluding the stripped death benefit asset.

4. The method of claim 1, further comprising calculating on the computer system a value of the stripped premium payment obligations.

5. The method of claim 4, further comprising recording on the computer system information relating to the calculated value of the stripped premium payment obligations so as to compile tax and accounting information.

6. A method implemented by a programmed computer system comprising the steps of:

a) transferring or assigning a plurality of life settlement contracts into a first vehicle, wherein each life settlement contract has associated therewith at least one underlying insurance policy, and each underlying insurance policy has associated therewith at least one death benefit asset and at least one premium payment obligation;

b) stripping the death benefit asset from each underlying life insurance policy and transferring or assigning the stripped death benefit asset to a second vehicle;

c) stripping the premium payment obligation from each underlying life insurance policy and transferring or assigning the stripped premium payment obligation to a third vehicle;

d) providing at least a first new security comprising the stripped death benefit asset and excluding the stripped premium payment obligation;

e) calculating on the computer system a value of the stripped death benefit assets; and

f) recording on the computer system information relating to the calculated value of the stripped death benefit assets so as to compile tax and accounting information.

7. The method of claim 6, wherein the second vehicle is a bankruptcy remote vehicle.

8. The method of claim 7, wherein the second vehicle is a special purpose corporation, limited partnership, limited liability company, or other legal entity.

9. The method of claim 6, wherein the third vehicle is a bankruptcy remote vehicle.

10. The method of claim 9, wherein the third vehicle is a special purpose corporation, limited partnership, limited liability company, or other legal entity.

11. The method of claim 6, further comprising providing at least a second new security comprising the stripped premium payment obligation and excluding the stripped death benefit asset.

12. The method of claim 6, wherein each of the first vehicle, the second vehicle and the third vehicle are distinct from one another.

13. The method of claim 6, further comprising calculating on the computer system a value of the stripped premium payment obligations.

14. The method of claim 13, further comprising recording on the computer system information relating to the calculated value of the stripped premium payment obligations so as to compile tax and accounting information.