21st Services Announces it has Settled Lawsuit with Coventry First
MINNEAPOLIS, Feb. 21 /PRNewswire/ -- 21st Services is pleased to announce
that it has resolved the lawsuit between it and Coventry First. All claims
and counterclaims have been dismissed. 21st Services's insurer has paid an
undisclosed sum to Coventry. 21st Services does not admit to any wrongdoing
and makes this statement about the lawsuit and settlement.
21st Services entered the life expectancy estimation business in 1998, using an estimation model developed in consultation with third-party consultants. In 2004, 21st Services engaged two outside consulting firms to analyze accumulated data from its life expectancy estimation model. Based on the consultants' analysis and subsequent recommendations, as well as on recommendations of its own director of medical underwriting, in January 2005 21st Services implemented substantial and material enhancements to its life expectancy estimation model, which resulted in longer average life expectancies in the aggregate. These changes included replacing its original mortality table (the 1994 Tillinghast non-medical table) with the 2001 Valuation Basic Table, implementing an impaired-insured underwriting model based on best practices found in the life insurance, long term care and life settlement industries, and implementing a new mortality calculator engine to better capture the mortality impact of minimally and substantially impaired insureds.
The new life expectancy model implemented by 21st Services in 2005 relies on a more current mortality table than the company's original model and also adopts a more sophisticated impairment methodology for the assignment of mortality debits and credits. This methodology is expected to result in more accurate estimates of life expectancy and to enhance 21st Services' position in the market. 21st Services strongly believes that accurate life expectancy estimates are in the interest of all participants in the life settlement market.
21st Services has asserted various counterclaims against Coventry. The company's attorneys have concluded, after depositions and a review of documents produced in discovery, that there is insufficient evidence to pursue the counterclaims or to substantiate allegations that Coventry has acted to the detriment of consumers.