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Death Master File (DMF) Update

In June the National Technical Information Service (“NTIS”) issued the Final Rule for access to the Limited Access Death Master File (“LADMF”). This final rule replaces the interim final rule issued in March 2014 and implements the requirements specified in the Bipartisan Budget Act of 2013 restricting access to the LADMF.

LexServ owns a copy of the LADMF, and under the interim final rule we have received weekly updates from NTIS. We expect to be certified under the final rule and therefore we will continue to receive updates in the future. We have spoken with the major mortality data aggregators for the life settlement industry and they are also confident there will not be any gap in access to the LADMF. As a result, we believe this final rule will have no operational impact on the life settlement industry.

The DMF has long been used by the life settlement industry as a tool to identify mortalities. The effectiveness of the tool has waned over the past 5 years since November 2011. At that time, the government began restricting DMF access for data privacy reasons and the concept of the LADMF was born. Based on LexServ’s data, the annual percentage of mortalities identified on the DMF since 2011 is as follows:

In order to compensate for the diminishing effectiveness of the LADMF LexServ has turned to other mortality data sources (Obituary, State Data, Proprietary Sweeps, etc.). As a result, LexServ’s time to mortality identification has actually improved. For 2015, with nearly 400 mortalities, LexServ’s median time to identify mortalities was 5 calendar days. For the same data group, 93% of mortalities were flagged by one of our electronic sweep methods.

We expect the LADMF to continue to be a data source used for mortality identification in our industry. The issuance of this final rule will stabilize access for the future, and we will continue to leverage the LADMF and other sources for mortality identification.

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