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BVZL:
Encouraging signs on German
Secondary Life Insurance Markets
Munich / Berlin, November 22, 2010
BVZL, a member company active in German Secondary Life Insurance Markets,
has reacted to market changes in 2010 by
increasing policy purchases. The extensive period of uncertainty on financial
markets and the credit and real estate
crisis in the US left it’s mark on German
businesses as well, but the period of restrictive policy purchasing appears to be
over. “We can see light at the end of the
tunnel again,” says Ingo Wichelhaus,
BVZL’s National Executive Board Member.
The mortgage crisis and resulting international
financial market crisis lead to an overall state
of uncertainty with investors, meaning that
sales channels for policy purchasers fell apart
completely. Though the past two years
showed a decidedly regressive purchasing
volume in comparison to previous years (2009
approx. 100 million Euros), BVZL’s policy purchasers are again optimistic about the future.
According to Wichelhaus, they are expecting
considerable growth in purchasing volume – a
minimum of 150 million Euros is expected – in
2010.
Purchasers are increasingly searching for
suitable policies, a development due particularly to demand from institutional investors.
Positive for investors and purchasers are also
changes in interest rates, which has directly
affected business activity for those dealing in
secondary markets. Generally, credit is used
to purchase policies from policy holders and
even more profit can be generated depending
on how wide the margins are between the
bank’s financing costs and the life insurance
policy value increase. For policy holders looking to sell their policy on the secondary mar-
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ket at original cash value despite an additional
charge, chances of finding a trustworthy taker
have definitively increased.
Be careful when buying policies
It is with great concern that BVZL watches the
continually rising number of businesses on the
German Secondary Life Insurance Markets
that entice consumers to sell their life insurance policies by promising them sky-high purchase prices and return rates. Even the
Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin or Federal Financial Supervisory
Authority) is very concerned about these developments and has, in the past, forbidden
several firms from doing business due illegal
deposit transactions.
Helpful tip from the experts
With special regard to such circumstances,
Wichelhaus points out again expressly that all
BVZL members active in German Secondary
Life Insurance Markets voluntarily uphold the
standards and guidelines published on the
association’s website: www.bvzl.de.
As a rule, policy holders should never accept
offers that stipulate paying the purchase price
in installments or at a later date. “Credible
purchasers always pay immediately. Any
other method would represent an unclear risk
of loss for the seller,” said Wichelhaus. Also,
one should be sceptical if extremely high
gains (for example: offering 200% or more on
the surrender value) and double-digit returns
for reinvesting are promised. “99% of the
time” these are impossible claims.
For consumers that want to sell their policies
on the secondary market, those that are considering taking a loan on their policy or those
who want to invest directly in a second-hand
life insurance policy, BVZL has developed
several guidelines/brochures that help to differentiate credible from untrustworthy sources. This and other helpful information about
secondary life insurance markets as well as a
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list of BVZL member businesses on the German market can be downloaded for free on
the BVZL website.
In addition, experts at BVZL recommend that
when in doubt, consumers should contact
their local consumer protection agency to get
information about the credibility of potential
buyers.
Investing in German Endowment Life Insurance Policies still a good and safe investment
Even in the face of the financial crisis, German endowment life insurance policies remain
a solid and sustainable investment. Safeguard
mechanisms such as an insurer’s conservative investment practices as a result of legal
and regulatory agency rules – for example the
“Versicherungsaufsichtsgesetz” (VAG or Law
of Insurance Supervision) or the “Anlageverordnung” (AnlV or Investment Regulations) as
well as regular controlling by financial authorities, among other things – ensure that consumers need not worry about their retirement
provisions. Even in the event that all professional instruments cushioning temporary market lows would fail or an initial insurer’s severe
financial crisis, the client’s money is safe.
These savings, including interest and surpluses, are held separately from other corporate assets in the insurer’s guaranteed assets
and cannot be tapped into by would-be creditors. The bad case would entail all guaranteed assets from life insurance policies being
transferred to the Protektor Lebensversicherungs AG, where all German life insurers
are mandatory members. A good and safe
product will reliably dominate both primary
and secondary markets.
Contact BVZL e. V.:
Ingo Wichelhaus (Executive Board)
Phone: 089/ 24 20 37 08
Email: [email protected]
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About BVZL:
Die im Bundesverband Vermögensanlagen im
Zweitmarkt Lebensversicherungen (BVZL) e. V.
zusammengeschlossenen Unternehmen und
Dienstleister engagieren sich weltweit in Lebensversicherungszweitmärkten. Der Verband mit seinen derzeit über 40 Mitgliedern fungiert seit seiner
Gründung im Mai 2004 als eine einheitliche Interessenvertretung in wirtschaftlichen, rechtlichen
und politischen Fragen. Der BVZL steht im ständigen Dialog mit Politik, Meinungsbildnern, Öffentlichkeit und anderen Interessengruppen, um die
dynamische Entwicklung der Branche aktiv zu
unterstützen.
Ein wichtiges Anliegen ist es, Branchenstandards
im Hinblick auf Transparenz und Vergleichbarkeit
der unterschiedlichen Anlagesegmente (britische,
deutsche und US-amerikanische Lebensversicherungen) zu installieren und somit die Voraussetzungen für ein erfolgreiches Investment in diese
differenziert zu betrachtenden Asset-Klassen stetig zu verbessern.
Members (in alphabetic order):
21st Services, AA-Partners AG, Abacus Settlements, LLC, Allgemeiner Versicherungsdienst
Gesellschaft M.B.H., ArensJäderberg GmbH,
Augur Life Management GmbH & Co. KG, Back
Bay Group, LLC/North Channel Bank Gmbh & Co.
KG, Baker & McKenzie, Berlin Atlantic Capital AG,
BLLW Braun Leberfinger Ludwig Weidinger, BVT
Life Bond Management GmbH, cash.life AG, City
Endowments Limited, Coventry, Credit Suisse
Securities, Del Mar Financial S.à.r.l., demark AG,
DLA Piper UK, Dr. Peters GmbH & Co. KG, Ernst
& Young AG, Fasano Associates, Hanseatische
Sachwert Concept GmbH, Ideenkapital AG, ISC
Services, König & Cie. GmbH & Co. KG, Legacy
Benefits LLC, Life Bond Holding GmbH, Life Insurance Settlement Association, Mercurius AG, MLF
LexServ, LP, MM Insurance Service, ORCA Finance N. V., Peachtree, Policen Direkt GmbH,
LLC, Q Capital Strategies, LLC, Sarastro-Finance
GmbH, SL Investment Management Limited, LLC,
UniCredit Bank AG, Wealth Management Capital
Holding GmbH, Wells Fargo Bank N.A., WestLB
Life Markets GmbH
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