Company: SUND
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001641172-25-017143
Chunk: 27

Company: Sundance Strategies, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 1
Chunk 27
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 from
such life insurance policies.

The
ability of an issuing insurance company to seek to rescind one or more life insurance policies depends on whether such issuing insurance
company is barred from bringing a rescission action by operation of an incontestability clause contained in the life insurance policies
or contestability limitations applicable as a matter of state law. Each life insurance policy, in accordance with laws adopted in virtually
every state in the United States, contains a provision that provides that, absent a failure to pay premiums, a policy shall be incontestable
after it has been in force during the lifetime of the insured for a period of not more than two years after its date of issue. However,
as stated above, some states recognize an exception to incontestability where there was actual fraud in the procurement of the policy.
A new contestability period may also arise in connection with information provided on any application for reinstatement of a life insurance
policy following lapse of a policy due to non-payment of premiums, or an application for an increase in policy benefits. The successful
contestation of the life insurance policies by the applicable issuing insurance companies could materially and adversely affect cash
flows.

Increases
in cost of insurance could reduce estimated returns and lower revenues.

Insurers
pass on a portion of their expenses to operate 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