The survey, compiled from information obtained through public records requests to state insurance departments, includes data from 34
life settlement providers, including nine who did not report any activity.
Released in 2010, ILMA's "
Life Settlement Provider Best Practices" is a guide of minimum compliance and diligence procedures for
life settlement providers.
Some
life settlement providers have created such arrangements that make it easier for agents to offer life settlements with less burdensome paperwork.
In the secondary market for life insurance, policyholders sell their contracts to
life settlement providers, which usually pass them on to investors or, in some cases, hold them on their own balance sheet.
com, Eric Smith, had this to say of
life settlement providers offering money for your life insurance policy with few questions or underwriting, “If a company, or life settlement broker, is willing to offer you an immediate amount of money for your life insurance policy without knowing much of anything about your health, then you are likely looking at a very poor offer.
Statewide, there are 16 approved
life settlement providers.
For
life settlement providers and brokers, there is the added cost that comes with increased compliance, coupled with an ongoing need to breed familiarity with regulators and raise awareness among consumers.
Life settlement brokers represent policy owners for a fee or commission and may solicit bids for policies from multiple
life settlement providers with the goal of obtaining the best price.
In life settlement contracts, investors buy from
life settlement providers insurance policies from policy owners for cash, ultimately receiving the policy benefits when the insureds die.
My hope is that the new task force will determine that greater regulation by the agency is necessary for
life settlement providers and brokers.
The department has additional oversight authority over life settlement brokers and
life settlement providers.
See the list of
life settlement providers in exhibit 2, at right.
