In a macabre backwater of finance, gamblers bid against each other to buy life insurance payouts on people who have yet to die. While the game sounds exotic, the close ties between two of its players are business as usual for Wall Street.

Advanced Settlements, a top broker in the fast-growing "life settlements" market, has an especially cozy relationship with one of the market's big buyers, a review shows.

The three co-presidents of Orlando, Fla.-based Advanced Settlements are the majority shareholders of Abacus Settlements, a firm that pays cash to people who are willing to bargain away the right to their death benefit while they're still living. Insurance industry regulatory filings reveal that Advanced Settlements executives Scott Kirby, Sean McNealy and Matthew Ganovsky each own a 25% equity stake in the two-year-old Abacus.

Craig Seitel, the president of Abacus, owns the remaining 25% equity interest. He's listed in regulatory filings as the operational manager of the firm, which is based in New York. The executives at Advanced, a division of National Financial Partners ( NFP), are described as passive members at Abacus, with "no day-to-day responsibilities relating to the operations.''

The ties between the two companies are no secret in the life-settlement industry, which last year reached the $10 billion mark in terms of future insurance payouts sold to investors. But it's not clear how widely known the relationship is among individuals looking to unload their unwanted life insurance policies -- even though Advance and Abacus have taken some steps to disclose their ties.

Some worry that the relationship between Advanced and Abacus has the potential for a conflict of interest, given that a broker primarily represents the interests of a seller. The concern is that disclosure alone doesn't eliminate the incentive a broker with Advanced Settlements might have to give Abacus preferential treatment in the bidding process.

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