LIFE PARTNERS POSITION HOLDER TRUST
Welcome to the Life Partners Position Holder Trust’s website. This website was established to provide Life Partners investors with information regarding the status of the PHT and their investments.
CERTAIN PAGES ARE STILL UNDER CONSTRUCTION
The PHT’s website is under construction. When it is complete, we expect that the website will be a central place for investors to find the information they need to keep track of their investments either as a Continuing Fractional Holder, a New IRA Note holder or a beneficiary of the PHT (either directly for cash holders and through the IRA Partnership for IRA holders). The site has the following pages that you should visit periodically:
In addition, there are pages that provide contact information, background information on the PHT and the bankruptcy as well as biographical information regarding the Trustee.
Pursuant to the Plan, maturities that were identified on or before November 11, 2016 are considered pre-effective maturities and are payable to the related position holders regardless of election.
The PHT is still in the process of collecting some of the maturities. As maturities are received, the PHT make further payments.
Please note that the total of your checks may not match the amounts shown on your SOMA. Why? The SOMAs were issued in November. Since the SOMAs were issued, transactions continued to be processed in the accounts changing the net amount that was due. In addition, the SOMAs did not reflect the 5% contribution assessed by the Plan on any premiums or escrow balances related to the maturities that were returned. The SOMAs did, however, reflect the 5% contribution on the maturity amount.
Checks were not sent to investors who sold a claim to a claims buyer. The PHT is currently processing the transfers.
In addition, investors against whom the Creditors Trust has either filed suit or disputed their claim will not receive a check until they have resolved all issues with the Creditors Trust. Investors having disputes with the Creditors Trust should deal directly with that Trust.
On December 30, 2016, the PHT sent out two sets of invoices to Continuing Fractional Holders relating to policies in which they hold an interest.
Payments for both invoices are due in thirty days.
Address: 204 Woodhew Dr.
Waco, Texas 76712
Billing under the Plan
The bankruptcy and the Plan of Reorganization changed many things about the manner in which Life Partners (and now the Position Holder Trust) conduct business. One of the more significant changes for Continuing Position Holders is billing for premium calls. The PHT will handle billing very differently than the how LPI handled billing in the past.
The Plan requires that the PHT follow very specific procedures in billing premium calls. Under the Plan, the PHT must bill holders of a policy when the total cash value and total amount on escrow for the policy are insufficient to pay premiums for the next year. The PHT can only bill a policy one time a year, at least 120 days before the premium due date and only in June or December.
In practical terms this means that the PHT will bill all policies (except those with sufficient cash value) every year on the following schedule:
December Cycle: Policies with annual premium due dates in May through October of the following year. Thus,
in December 2016, the PHT billed for these premiums due:
June Cycle: Policies with annual premium due dates in November and December of the current year and
January through April of the following year. Thus, in June 2017, the PHT will bill for the following
Please note that the PHT must send invoices to all holders in a given policy even if that holder has an sufficient amount in escrow to pay his or her share of the premium call.
Escrow Balances under the Plan
Because the Plan requires a different method of billing than LPI used previously, the PHT must handle escrow balances differently than LPI had in the past. In the past, LPI had billed for premium payments as they were made. When a payment needed to be made, LPI determined whether a position holder had sufficient money in escrow to pay its share of the payment. If so, LPI would use the escrowed money to pay the position holder’s share of the premium and reduce the escrow balance. If there was not enough money on escrow, LPI would bill for the holder for its share of the premiums.
The PHT, on the other hand, bills holders for premiums for a policy once a year in either June or December. At that time, the PHT collects money from the holders to pay premiums for the following year. Because of the billing schedule required by the Plan, the PHT is billing for premiums related to a policy renewal that may not occur for many months. For example, in December 2016, the PHT billed for annual premiums for policies with a premium renewal date in October 2017. The premiums related to those policies will be paid from October 2017 through September 2018.
Although it is required to collect premiums annually, the PHT does not pay premiums to the insurance company just once a year. For most policies, the PHT pays premiums to the insurance company every three months. This is the standard practice in the life settlement industry allowing more control over the payment of premiums and limits the loss of value that occurs when an insured dies. If an insured dies right after a premium is paid, the insurance company keeps the premium. Paying premiums quarterly reduces these losses to no more than three months’ worth of premiums.
Because the PHT is required to hold and use money paid by holders over the course of several months, not all of the money that is shown in a holder’s escrow can be used to pay future premiums. For example, in December 2016, the PHT billed for annual premiums for policies with an October anniversary. This bill is for premiums to be paid from October 2017 through September 2018. To keep the policy in force until October 2017, the PHT must pay premiums on January 2017, April 2017 and July 2017. The money in a holder’s escrow account in December 2016 when the bill was sent is needed to pay these premiums. As such the escrow balance an investor sees at any given time represents both unencumbered funds and funds already assigned a purpose but not yet sent to the insurance company. The attached timeline may be helpful.
Future invoices (beginning with the June 2017 cycle) will include an escrow reconciliation for each position. This reconciliation will identify the amount in escrow for that position in excess of the current premium needs. Because of the on-going post-effective date reconciliation process which will last until April, the PHT was unable to include that information on the current invoice.