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Court Gives Life to Death-Bet Insurance

20 Nov

In a closely watched case, New York state’s highest court ruled that it is legal for somebody to take out a life-insurance policy and immediately sell it to a stranger.

The ruling is a blow to insurers and a victory for hedge funds that have bought billions of dollars of such policies in recent years, part of a controversial practice in which thousands of people have taken out life policies and quickly sold them to investors, who pay the premiums and collect when the insured dies.

The case involves a dispute over $56 million in life insurance taken out by the late Arthur Kramer, a Manhattan attorney who died in 2008. Just after taking out the policies, Mr. Kramer sold the right to collect on them to hedge funds.

 

Court Gives Life to Death-Bet Insurance – WSJ.com.

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Posted by on November 20, 2010 in banks, economy, info, money

 

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