Ontarian life settlement firm buys $100 million in US life policiesBy Alain Thériault | December 02 2014 11:16AM
Crown Life Canada Ltd bought a $107.5 million portfolio of policies under life settlements, mainly from the United States. This private investment company should not be confused with Crown Life, the former lifeco acquired by Canada Life in 1998.In a news release issued on October 7, Crown Life Canada says that this purchase positions it well to profit from growth in the life settlement market. It adds that investments in life settlements generate high returns that are not affected by the economic environment or correlated to other markets like resources.
“We are pleased with this purchase acquisition and wish to thank our funding partner, North Channel Bank, along with our trusted advisors and shareholders for their support, hard work, due diligence and perseverance,” Crown Life Canada’s president and CEO Lorraine Fusco says in the release. North Channel Bank is a private bank dedicated to life settlement players.
Following the announcement, advisors commenting on the online forum For Advisors Only expressed surprise upon noticing that a life settlements company was using the name Crown Life. This company is totally unrelated to the defunct Crown Life, an insurance company acquired by Canada Life in 1998, which had an enviable reputation in the industry as a life insurance supplier.
Crown Life Canada is a private investment company based in Mississauga. It targets and acquires life insurance policies from seniors. It holds these policies until maturity in the hope of earning a profit on these transactions.
Although this practice is prohibited in Ontario, firms like Crown Life Canada or MaxLife Fund, based in that province, along with other firms around the country, regularly buy policies from provinces that allow life settlements: Quebec, New Brunswick, Nova Scotia and Saskatchewan. They also operate in the United States, where life settlements are popular and tolerated in several states.
This practice is criticized by many in the industry (See the April 2014 issue of The Insurance and Investment Journal, Viatical settlments stage comeback to insurers’ chagrin)
Crown Life Canada has a colourful history. Under its former name, Crown Alliance Capital Limited, its listing on American markets (symbol: CACL) was suspended by the Securities and Exchange Commission (SEC) in 2013. The regulator alleged a lack of current and accurate information on assets and shareholders.
Analysts categorized CACL as a penny stock because of its very low price and market capitalization. Sites like hotstocked.com, which promote penny stocks, reported that the company was previously known as Kinetic Resources Corp., a Calgary-based private company operating in the gas sector. The site adds that CACL acquired its first insurance policy in June 2012.
Did not return calls
Lorraine Fusco was appointed CEO of Crown Life Canada on May 8. She was also CEO of Crown Capital Alliance and previously worked at a company called Fusco Financial. What led Fusco to adopt the name of a renowned former insurer? The Insurance and Investment Journal reached Fusco twice by phone, but both times she said she was unavailable for an interview and promised but failed to call back later that day. She did not reply to a subsequent e-mail.
On her LinkedIn profile, Fusco says she has 15 years of experience in the insurance industry and was a member of the Million Dollar Roundtable (MDRT) from 2005 to 2008.