Life Settlement Agreements and the Texas Securities Act: A Summary and Review of Life Partners Inc. V. Arnold

In Life Partners, Inc. v. Arnold, the Texas Supreme Court (the Court) addressed the issue of whether “life settlement agreements” are securities under the Texas Securities Act and thus subject to the Act’s registration and disclosure requirements. Holding that the transactions at issue are in fact “investment contracts,” and thus “securities,” under the Texas Securities Act, the Court solidified important protections for the investing public and rejoined the vast majority of States in interpreting securities regulations broadly so as to maximize the protection provided to investors. After briefly summarizing the law and facts at issue, this article discusses the Court’s reasoning and analysis in Life Partners and attempts to address some potential impacts of the Court’s decision.