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Lifemark given extra 3 months as policies begin to mature

Lifemark administrators have been given an extra three months to secure the long-term future of the firm’s life settlement portfolios, although any chance of the industry recouping FSCS levies remains a long way off.

Last Friday, the Luxemburg regulator granted Lifemark administrator Eric Collard, of KPMG Luxemburg, an extra three months to attempt to avoid Lifemark going into liquidation, which would mean a forced sell-off of assets.

Lifemark went into administration in November 2009 and Luxemburg regulator Commission de Surveillance du Sectaur Financier has already twice extended the period of provisional administration.

The FSCS announced in November Lifemark policyholders would be compensated up to £48,000 and the industry was hit with a £326m interim levy.

The Investment Management Association is involved in discussions with regulators and the Lifemark administrator to find ways of maximising the value
of the portfolios.

IMA members have been hit with an FSCS interim levy of £233m while intermediaries suffered a £93m bill.

IMA wholesale director Guy Sears says there is no “magic solution” to retrieve industry money paid through the levy and the focus of the trade body’s work is first ensuring that those with over £48,000 invested receive more money back.

He says: “This is a long haul with no magic solution. We are working to see if we can add any value through our expertise to ensure the best oversight is taking place.”

US hedge fund CarVal and Norwich & Peterborough gave Lifemark £7.8m of short-term funding in October to ensure premium payments were met. The funding agreement ended this week and N&P says its £1.5m loan is being returned as maturing policies have increased liquidity.

The Lifemark portfolio has generated around £21.7m of new cash since mid-December 2010 due to maturing policies.

Lifemark founder Stewart Ford says the portfolio is expected to generate a further £31m this year and £93m in 2012. “The performance of the Lifemark portfolio in recent weeks has gone a long way to alleviate the immediate cashflow problems facing the company,” he says.

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