Life Settlement License

Here is some of the proposed legislation for a New York Life Settlement.

• 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.

This is good news for regulation and licensing..

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).

Oregon Gov. Ted Kulongoski signed life settlement legislation Tuesday that requires insureds to hold on to financed policies for five years after issuance before they can sell them on the secondary market.

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.