Company: SUND
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001641172-25-017143
Chunk: 112

Company: Sundance Strategies, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 1A
Chunk 112
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 their business and administer their life insurance policies in the form of policy charges
borne by each policyholder. In the event an insurer experiences significantly higher than anticipated expenses associated with operation
and/or policy administration, the insurer has the right to increase the charges to each of its policy owners. In the event the charges
to a life insurance policy are materially increased, additional premium payments may be required to maintain enforceability of such policy.

AXA
Equitable issued cost-of-insurance, referred to herein as “COI,” increases on eleven (11) of the previously held life insurance
policies underlying our prior NIBs. In addition, one Transamerica and one Lincoln policy, both of which were Policies underlying our
prior NIBs, were subject to increased COI’s. Other carriers have been issuing COI increases that impact life insurance policies
held by large settlement funds. Multiple lawsuits, including class actions, against Phoenix Life, Lincoln National Insurance Company,
AXA Equitable, Banner Life, and Transamerica Life Insurance Company are currently ongoing. However, most of these lawsuits are in the
very early stages.

Carrier
and service partner credit risk can adversely affect life settlements.

Holders
are subject to the credit risk associated with the viability of the various insurance companies that issued the life insurance policies.
The insolvency of an issuing insurance company or a downgrade in the ratings of an issuing insurance company could have a material adverse
impact on the value of a policy issued by such issuing insurance company, as the collectability of the related death benefits and the
ability of such issuing insurance company to pay the cash surrender value or other amounts agreed to be paid by the issuing insurance
company may be reduced. Any such impairment of the claims-paying ability of the issuing insurance company could materially and adversely
affect the value of the policies issued by such insurance company, the ability of the Holder to pay the premiums due on other insurance
policies and the Holders ability to pay any required policy premiums, fees and expenses of the service providers and our other expenses,
which could materially and adversely affect the value of a policy.

18

The
inability to keep track of the insureds could keep us from updating the medical records of the insured.

It
is important for the Holder of the life insurance policies to track the health status of an insured and keep information current, which
is done by contacting the insured and/or other designated persons and obtaining updated medical records from an insured’s physician.
There are significant U.S. federal and