Life settlement firms have been investigated for the second time in less than a year.
According to the Boston Herald, Massachusetts Attorney General Martha Coakley has launched an investigation into the industry, specifically two unnamed firms. The industry, which buys consumers’ life insurance policies and resells them to major commercial banks, which then sell those policies to investors, has been on the Attorney General’s office’s radar for some time, according to a spokeswoman.
According to the paper, Massachusetts Secretary of State William Galvin began investigating life settlement firms last fall and his office’s investigation is still ongoing. Galvin has previously expressed concerns that the life settlement industry is similar to the subprime mortgage market, in which home loans were packaged and sold to large-scale investors.
According to a separate Herald report, while regulators have recently begun to crack down on many life settlement industry abuses, a number of major international banks such as Credit Suisse, JPMorgan, and Wells Fargo invest heavily in life settlements.