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

Company: Sundance Strategies, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 1
Chunk 25
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 would also qualify as an insured
procuring a policy.”

We
cannot predict whether a state regulator, insurance carrier or other party will assert that any policies should be treated as having
been issued as part of a STOLI transaction or otherwise were issued in contravention of applicable insurable interest laws. This risk
is greater where the insured materially misstated his or her income and/or net worth in the life insurance application. Decisions in
Florida have increased the risk that challenges to premium financed policies may be decided in favor of the issuing insurance company.
Moreover, because the life insurance policies are often originated in the same or a similar manner and in a limited number of states
(generally, California and Wisconsin, although the insured may reside in other states), there is a heightened risk that an adverse court
decision or other challenge or determination by a regulatory or other interested party with respect to a policy could have a material
adverse effect on a significant number of other policies, including the rescission of policies or the occurrence of other actions that
prevent us from being entitled to receive or retain the net death benefit related to the policies. Concerns of such nature could also
negatively affect the market value and/or liquidity of the life insurance policies.

Fraud
in the application for life insurance can also affect assets and interest in policies.

There
are risks that policies may be procured based on fraud or misrepresentation in connection with the application for the policy. Types
of fraud that have enabled carriers to rescind or void the related policies successfully include, among others, misrepresentations concerning
an insured’s financial net worth and/or income, need for and purpose of the life insurance protection, medical history and current
physical condition, including age and whether the insured is a smoker. Such risk of fraud and misrepresentation is heightened in connection
with life insurance policies for which the premiums are financed through premium finance loans or other structured programs. In particular,
there is a significant risk that applicants and potential insureds may not answer truthfully or completely questions related to whether
the life insurance policy premiums will be financed through a premium finance loan or otherwise, the applicants’ purpose for purchasing
the policy or the applicants’ intention regarding the future sale or transfer of the life insurance policy. Such risk may be further
increased to the extent life insurance agents communicate to applicants and potential insureds regarding potential premium finance arrangements
or profits to be made on policies that will be sold after the contestability period. If an insured has made any