They will bet your life on it !

Sub-prime mortgage death or Collateralized death obligations
Hindsight is a wonderful thing .Anyone can look back now and see the results of bundling sub-prime mortgage debt, credit default swaps and collateralized debt obligations trading them en masse was a bad and poorly regulated enterprize.The current down turn we now enjoy is a result of that market of sub-prime debt among other things.
Naturally big banks are, according to the New York Times seeking to replicate that model which was so much fun while it lasted. Mistakes were made but … “While that idea was, in retrospect, badly flawed, Wall Street is convinced that it can solve the risk riddle with securitized life settlement policies.”

The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.
The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.

Experts claim this is different "death is not correlated to the rise and fall of stocks" .Opportunities to manipulate this emerging market? Only the most far fetched conspiracy addle minded person would make a jump that big .Beside what are the things deaths are correlated to? Deaths are correlated to public health policies, food supplies, global climate change and wars .Wall Street is convinced it can get it right this time and solve the risk with securitized life settlement policies.

Goldman Sachs has developed a tradable index of life settlements, enabling investors to bet on whether people will live longer than expected or die sooner than planned. The index is similar to tradable stock market indices that allow investors to bet on the overall direction of the market without buying stocks.
Spokesmen for Credit Suisse and Goldman Sachs declined to comment.

In many ways, banks are seeking to replicate the model of subprime mortgage securities, which became popular after ratings agencies bestowed on them the comfort of a top-tier, triple-A rating. An individual mortgage to a home buyer with poor credit might have been considered risky, because of the possibility of default; but packaging lots of mortgages together limited risk, the theory went, because it was unlikely many would default at the same time.
While that idea was, in retrospect, badly flawed, Wall Street is convinced that it can solve the risk riddle with securitized life settlement policies.

----------------Future oversight ,regulation ? Hard to know exactly but ………………………

The U.S. banks are pouring money into campaign contributions and lobbying efforts -- and the total that could bring in by fending off a bill to regulate derivatives trading is 358 times more than what they've spent on politicking since the start of the 2008 election cycle.
Together, JPMorgan Chase & Co., Goldman Sachs, Bank of America, Morgan Stanley and Citigroup have spent $97.8 million on lobbying and campaign contributions (including donations from both the employees and political action committees of these companies) since 2007.
As five of the all-time top donors, these companies have strong financial ties to Congress. Perhaps it's no wonder, then, that the derivatives market hasn't faced much (if any) regulation during its 30 years of existence. These banks have also supported the party now in power, giving Democrats 63 percent of their total campaign contributions since the start of the 2008 election cycle.

Open Secrets