In accordance with the recent Senate Special Committee on Aging’s hearing on the senior life settlement industry, Committee Chairman Herb Kohl, D-Wis., has written Treasury Secretary Timothy Geithner a letter asking for clarification on taxation of the proceeds from settlements for widows and orphans, who have traditionally not been taxed for the proceeds from life insurance policies. Geithner has responded by saying that the Internal Revenue Service will soon publish guidelines regarding the tax treatment of these policies.
In addition to asking for clearer guidelines on the proceeds from senior life settlements may be taxed, Kohl asked Securities and Exchange Commission Chairperson Mary Schapiro to elucidate on its jurisdiction in the industry and regulate according to that jurisdiction. Schapiro responded, "We will look carefully at the issues surrounding the registration of life settlement providers and brokers and the potential need to regulate more specifically in this area.”
