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Last Post: 12/12/2016 10:18:30 PM - Followers: 17 - Board type: Free - Posts Today: 0



Letter from Life Partners Holdings, Inc.'s CEO Regarding Wall Street Journal Article

WACO, TX - December 21, 2010


Dear Investors,

This morning, the Wall Street Journal ran an article that, in our view, provided a misleading depiction of some of our business practices and appeared to be based on anecdotal or incomplete information and the self-serving criticisms of some of our competitors. We would like to set the record straight.

One of the focal points of this article was the system utilized by Life Partners to obtain estimates of life expectancies ("LE"). According to the article, a higher-than-expected number of insureds are exceeding the LEs on policies purchased through Life Partners Holdings, Inc.'s operating subsidiary, Life Partners, Inc. ("LPI"). However, as trade publications have reported, this phenomenon has been experienced throughout the life settlement industry and is not exclusive to LPI. The one factor in a life settlement transaction that can be controlled and adjusted is the discount at which the policy is acquired. Unlike other companies, LPI calculates sensitivity of return utilizing LE to set a reasonable premium escrow amount, and does not rely exclusively upon LE as the primary factor for profitability. LPI only purchases policies that are economically feasible, under both predicted circumstances as well as in the event the insured outlives their LE by a number of years.

LPI also provides its clients with analytical tools that can be applied to any policy being considered for purchase, so that the breakeven point can be determined. This refocuses the key element of profitability from LE accuracy to the discount to face amount. Few if any LPI clients are able to acquire interests in a large enough universe of policies to recreate statistical mortality tables. Therefore, statistical probabilities should not be considered to be the principal predictive factor with respect to potential returns. Instead, each life settlement transaction is structured with the goal of achieving the purchaser's target return and at a minimum, a positive return even if the insured outlives their LE prediction. In that way, the purchaser has the potential for superior returns, but also has a safety margin in the event that the LE for any or all policies is exceeded.

Further, as the article fails to note, the vast majority of purchasers acquire fractional interests in a number of policies, which provides them with risk diversification. While the LE for some of those policies may be exceeded, the purchaser may receive the proceeds on others significantly prior to their LE timeframe. It is the overall return on the funds that each purchaser dedicates to the purchase of policies that matters, not just the selected policies on which LE may have been exceeded.

The Wall Street Journal article also raises unwarranted issues regarding LPI's fee structure. During the past fiscal year, LPI's net income as a percentage of the face amount of policies that were the subject of life settlements arranged by LPI was approximately 11%. This amount is borne by the sellers of the policies as a discount to the price that they would otherwise receive if they were able to negotiate with a willing purchaser or group of purchasers directly. The discount at which LPI prices most policies allows for investors to achieve positive returns even when a policy is held for 12 years, including premium payments.

By purchasing policies at a significant discount to face value, LPI provides an opportunity for purchasers to both preserve principal and achieve a modest return, even if the LE is exceeded by five to seven years.

As always, we are continually reviewing our processes and operations with an eye toward providing even greater value to our investors and purchaser clients. We believe investors who are looking for long-term growth in an alternative asset class will continue to recognize the value that life settlement transactions bring to both the purchasers and the sellers of these policies.

Brian Pardo
CEO/Chairman of Life Partners Holdings, Inc.

Life Partners is the world's oldest and one of the most active companies in the United States engaged in the secondary market for life insurance, commonly called "life settlements." Since its incorporation in 1991, Life Partners has completed over 126,000 transactions for its worldwide client base of over 27,000 high net worth individuals and institutions in connection with the purchase of over 6,400 policies totaling approximately $2.7 billion in face value.

Safe Harbor - This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The statements in this news release that are not historical statements, including statements regarding future financial performance, the market for our services, the growth in the life settlement market and our growth within that market, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see our most recent Form 10-K. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Shareholder Relations (254) 751-7797 or info@LPHI.com
Visit our website at: www.lphi.com


#928   yeah, i found it, thx :( Paullee 12/12/16 10:18:30 PM
#927   The deletion list is not recurring so you Renee 12/12/16 04:44:41 PM
#926   nothing saying Life partners there Paullee 12/12/16 01:46:30 PM
#925   LPHIQ BK PLAN effective. All shares cancelled: Renee 12/09/16 04:43:00 PM
#924   LPHI changed to LPHIQ, bankruptcy. Delisted from the Renee 03/30/15 09:27:49 AM
#923   it looks like LPHI is starting to build OlinSain 03/19/15 12:06:23 PM
#922   Wonder whats causing this rise Tdash 03/18/15 01:39:44 PM
#921   Golly.....What a POS.... richrichrich 01/27/15 09:48:49 PM
#920   Delisted Thursday, Jan. 29th. GMONEY4 01/26/15 03:17:08 PM
#919   Well gain is gain. Tdash 01/23/15 02:17:10 PM
#918   Perhaps. That is, if your chart is a richrichrich 01/23/15 02:04:06 PM
#917   Chart says 70's-80's Tdash 01/22/15 10:58:26 AM
#916   Interesting I wonder where this will recover too Tdash 01/22/15 10:50:52 AM
#915   LPHI, filed Bankruptcy and SEC charging: hondaboost 01/21/15 12:56:19 PM
#914   Bankrupt 1:45 pm. willlbone 01/20/15 02:03:30 PM
#913   SEC filed motion for receivership and a monitor fraudduedilgence 01/06/15 01:00:18 PM
#912   Here comes the judge. willlbone 12/03/14 11:08:00 AM
#911   Why the long face? This implosion was a fraudduedilgence 11/13/14 07:44:34 PM
#910   Any news on these guys? Just been floating oldschol 07/24/14 11:42:18 AM
#909   They should double pay the affected shareholders as TechKim 04/24/14 01:39:56 PM
#908   Exciting the SEC or should I say using TechKim 04/17/14 01:35:25 PM
#906   I could agree with you totally in your TechKim 04/16/14 11:22:02 PM
#905   So what hedge fund Shorting the stock solicited madeindet 04/16/14 05:47:20 PM
#904   Life Partners Sues Charles Schwab Subsidiary for Counterfeiting madeindet 04/16/14 05:45:27 PM
#903   Actually, that's only partly true... diannedawn 03/28/14 04:50:09 PM
#902   Life Partners Cleared of All Fraud Claims TechKim 03/13/14 01:28:51 PM
#901   It sure feels good to be right diannedawn 02/10/14 09:18:58 PM
#900   "The SEC suit is scheduled for jury trial diannedawn 01/28/14 09:22:51 AM
#899   I've been outta LPHI and was looking to Guitarmanlife 01/11/14 01:41:10 PM
#898   Jeez....How wrong can the latest news be?.... richrichrich 01/10/14 06:25:52 PM
#897   I've been gambling on them winning in their diannedawn 12/30/13 11:01:33 AM
#896   Geez...the persistent sell off here diannedawn 12/17/13 10:35:09 PM
#895   Here is the last months from the docket... diannedawn 12/16/13 02:30:57 PM
#894   Another lawsuit out of the way... diannedawn 12/04/13 12:05:42 PM
#893   Any news on this? oldschol 11/04/13 07:59:34 PM
#892   10Q is atrocious. Looks like they are fraudduedilgence 10/15/13 10:44:54 PM
#891   This is kind of funny :) diannedawn 10/08/13 11:10:19 AM
#890   Here is something... diannedawn 10/08/13 10:33:30 AM
#889   Never a bad thing to take profits off diannedawn 10/08/13 10:07:10 AM
#888   i'm just glad i got out at $3.80 Guitarmanlife 10/07/13 01:50:27 PM
#887   Appellate Court in Tx ruled that LPI life fraudduedilgence 08/30/13 01:13:44 PM
#886   "When does it all end?" TechKim 07/19/13 09:42:56 AM
#885   10Q not looking too good. fraudduedilgence 07/18/13 03:56:36 PM
#884   It just never seems to end. TechKim 07/11/13 09:37:45 AM
#883   TEXAS AG coming again boys and girls. fraudduedilgence 07/10/13 05:01:54 PM
#882   A very strong win. Regardless, it is dynamic! TechKim 07/10/13 02:40:09 PM
#880   http://seekingalpha.com/news-article/6940292-life-partners-prevails-in-nevada-fe johnsyn 06/28/13 11:24:30 AM
#879   LPHI - Life Partners Holdings, Inc. CEO Files SevenTenEleven 06/22/13 01:53:05 PM
#878   It is long over due! I do TechKim 06/22/13 01:33:53 PM
#877   Thats why it went up yesterday. parker1073 06/22/13 10:10:11 AM
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