A major player in the life settlement market has filed for Chapter 11 bankruptcy protection.
On Monday, J.G. Wentworth and two of its affiliates filed for bankruptcy protection in a Delaware court.
J.G. Wentworth had been very active in the life settlement market. The financial crisis has deeply impacted all securitization markets, and the life insurance market is no different.
Life insurance policyholders who have already sold their life or annuity policies and received funds should be fine. However, those who have transactions pending could suffer as a result of the market downturn:
“In the middle of the transaction, all bets are off,” said Stephan R. Leimberg, chief executive of Leimberg Information Services Inc., a financial-legislation and financial-regulation analysis service in Havertown, Pa. “If you already have the check, you're home free, but it's those policies that are in the middle that are in no man's land.”
Source: Investment News
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