Life Settlement Regulation and license requirements have grown in the past few years, and certain states are strict on who can purchase policies in their state.

Florida is a strict state and currently only has 14 firms that are licensed to purchase. *Remember this isn’t including brokers, but providers (aka funders) who are the ones actually purchasing the policy.

The list can be found on the Florida Office of Insurance Regulation:
wwww.floir.com/sp/Viaticals/LicensedViaticalSettlementProviders.aspx (Simply copy and paste into your browser)

We recommend seniors and financial professional understand who they are allowed to do business with in the state of Florida.

Interesting New York Life Settlement Licensing Update

It is ins’t a huge deal, but most resident states require fingerprinting for background check, and if this is required for non-residents it could be somewhat of a hassle.

We will follow updates…

Primarily offering on small face policies, the company is reporting that its policy intake is steadily increasing and offers are continuing to be made. “We are satisfied with our rate of growth during 2009. Whereas other providers and brokers have been easing back or closing up shop, Berkshire has been able to consolidate its position while extending its reach to new and underperforming areas,” said Dallas.

Source: Press

Guy E. Runyon, President and CEO of Eagil Life Settlements, LLC, announced today that Eagil has been approved as a Life Settlement Provider in the state of Ohio. “We are excited to add the great state of Ohio as another regulated state where we can purchase life insurance policies,” Runyon exclaimed.

EAGiL Life Settlements can now transact life settlement purchases in forty states, while its wholly owned affiliate company, Eagil Financial Group, LLC, a corporate and personal financial planning company, is licensed in all 50 states.

• The disclosure of significant life settlement contract provisions.
• The disclosure of affiliations or contractual arrangements among parties involved in a transaction.
• A complete and accurate description of all offers and counter-offers relating to the sale of the life insurance policy.
• A reconciliation for the policy owner showing the difference between the gross offer for the purchase of the life insurance policy and the net amount to be paid to the owner, including a listing of all fees and compensation to the life settlement broker and others.
• Advising the policyowner that selling a life insurance policy could result in tax consequences and could limit the insured individual’s ability to buy life insurance in the future.

We will update more information when it becomes available.

Illinois Governor Pat Quinn has signed a new law prohibiting stranger-originated life insurance transactions.

The law, Senate Bill 2091, also aims at protecting state consumers who enter into viatical settlements.

STOLI transactions involve a third party encouraging a senior to acquire a life insurance policy, then paying the premium on behalf of the senior. The third party ultimately sells the policy to other investors.

SB 2091 defines viatical settlements as the sale of an existing life insurance policy for a cash payment that is less than the full amount of the death benefit in the life insurance policy.

In addition to banning STOLI, the law seeks to protect consumers by imposing disclosure requirements and licensing and ethics standards on viatical and life settlement providers. (Providers are also referred to as a Life Settlement Funder).

SB 973 was proposed by the American Council of Life Insurers (ACLI) and caught the life settlement industry by surprise. Settlement industry representatives believe that imposing a five-year waiting period will hurt their market. The requirement is intended to thwart stranger-originated life insurance.

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A 7131, sponsored by committee Chairman Joe Morelle, will now proceed to the Assembly Codes Committee, where amendments proposed by the settlement industry are expected to be addressed.

The bill, drafted by the New York State Insurance Department, had hardly been out in March when it encountered resistance from Doug Head, executive director of the Life Insurance Settlement Association (LISA).

He has previously objected provisions in the bill that would allow insureds to choose which state can regulate settlements. That would conflict with other states’ laws which call for settlements to be regulated by the state where the insured lives.

Russel Dorsett, co-managing director of life settlement broker Veris Settlement Partners, said he’s troubled by a provision in the New York bill that would require names and addresses of all intermediaries who participate in a transaction to be disclosed. That would allow “upstream parties” such as banks and providers to know “downstream” players such as producers. He said that could hurt brokers because “the banks would love to bypass everybody.”

“Mandating the names and addresses of anybody who touched that transaction, that’s silly,” Dorsett said.

If New York is to enact a bill this year, time is short because there are 13 legislative days left to do so, according to several members of the life settlement market.

Source: Bill

The new law takes effect July 1.

HB 75 contains provisions from two competing model laws drafted by the National Conference of Insurance Legislators (NCOIL) and the National Association of Insurance Commissioners (NAIC), but leans more heavily toward NCOIL’s model, said Shad Priest, deputy director of the Idaho Insurance Department.

Before the bill passed, the state only had an insurable-interest law, he said.

Priest said the bill outlaws stranger-originated life insurance (STOLI).

Idaho’s law differs from other states in that it requires life settlement brokers and providers to be licensed as life insurance producers. Other states have separate licensing categories for each of the intermediaries.

Doug Head, executive director of the Life Insurance Settlement Association (LISA), opposes a provision in the Idaho law that will require an insured’s medical information to be turned over to insurers.

“This is intrusive and unfair to consumers,” Head said in an email. “We hope that it will be amended in the future.”

Priest responded that the information is collected by providers in order to conduct the transaction and the state requires that the insured consent to releasing the information to the provider, broker, and insurer.

“The intrusion with respect to the insurer is no greater than the intrusion created by the release of the information to the broker and the provider,” he said in an email. “The very nature of life settlement transactions requires that the consumer allow strangers to access his or her medical records. When the consumer agrees to enter into a transaction, it is important that they be aware of and agree to the required medical disclosures, which the law is designed to do.”