Posted by The Policy Settlement Alliance on Fri, Sep 03, 2010 @ 08:12 AM
By Ian F Smith
Back in June 2008 the Governor of Hawaii, Linda Lingle, signed into law the Hawaii Life Settlement Model Act. The Act basically prohibited transactions called STOLI. STOLI transactions are transactions that benefit someone who has no proven insurable interest in the life of insured. Stranger Originated Life Insurance transactions as they are more formally known, involve the process of a disinterested third party offering cash to someone who ultimately buys an insurance policy and gives it to the third party. The third party then waits for a couple of years and then sells the policy in the settlement market for a huge profit.
The Hawaii life settlement act imposed a 2 year ban on any type of settlement transaction and provided the Department of Commerce the authority of oversight over the settlement companies, agents and brokers.
Since the Life Settlement Model Act took effect in Hawaii it now appears that the termination of the 2008 Act which was set to expire in June 2010, basically has done so. Now, Hawaii has become the first state to end up de-regulating their STOLI act of 2008. The Act was scheduled to be extended for another 5 years, but it stalled in late session committee meetings.
Now that the Hawaii life settlement Act has expired, only now can the industry prove that it can self regulate and eliminate any such disinterested transactions from happening again.
Visit our LIVEpdq webcast for current news and to inquire about your life settlement.
Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.
Posted by The Policy Settlement Alliance on Fri, Sep 03, 2010 @ 08:07 AM
By Ian F Smith
Basically a bonded life settlement is a secondary market for life insurance policies that are no longer wanted. This market allows an investment fund to buy insurance policies and become owners of the policies. The new owners become entrusted with the new asset and ultimately become benefactor of the death benefit. The ancillary benefit is to the seller who inmost cases receives a significant financial benefit from the buyer.
A bonded life settlement is typically an insurance policy that has been underwritten by certain standards of the bonding company. These transactions usually carry a lower rate of return as the buyer would need to continue paying the premiums on the policy to keep it in force. However, this assures the insured the maximum return on the basis of the face amount of the policy. The insurance company also plays a key role in the bonded life settlement therefore the insured can be assured that the process is secure.
Only certain bonded life insurance policies can be settled through a bonded settlement. This selective bonded process can provide better settlement results.
Visit our LIVEpdq to stay up on the life settlement market and all of the options available to you.
Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.
Posted by The Policy Settlement Alliance on Fri, Sep 03, 2010 @ 08:05 AM
By Ian F Smith
The Delaware life settlement regulations have imposed an insurable interest act earlier this year. They went a little further and included a personal insurance caveat basically stating that a legally competent person can obtain an insurance policy on their own life for the benefit of any person, but no other person can effectively pursuade or obtain an insurance policy on another individual unless the benefits can be reasonably proven to have an insurable interest in the insured.
The Delaware life settlement codes also require agents, brokers, providers and funding companies to be fully licensed within their state. The may also be required to maintain bi-annual certifying educational credits.
The Delaware life settlement rules also require confidential reporting to certain state insurance commissioners departments. Licensed agents and brokers must also provide certain levels of compensation disclosure. Proceeds to the seller must be transparent showing fee's, commissions and other payouts associated with a settlement transaction.
The commissioner for the Delaware settlement market must also be given full authority to establish standards which must be met by all agents and brokers, request bonding for non-domiciled providers and regulate certain discounts for all levels of the settlement exchange.
To stay current with state by state regulations and to find out how to properly navigate the settlement market, visit our LIVEpdq webcast for more information.
Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.
Posted by The Policy Settlement Alliance on Wed, Sep 01, 2010 @ 03:32 PM
By Ian F Smith
The Idaho life settlement act states that any persons involved in the business of life settlements must be licensed. It's illegal for any person to transact any part of the process without a fully approved state license.
It is also illegal to engage in any type of STOLI transaction. STOLI stands for Stranger Owned Life Insurance. STOLI is the practice of an uninterested third party buying a life insurance policy on an insured they have no insurable interest in. Then either compensationg the insured up front with a sum of money or paying the insured after the stranger sells the policy on the settlement market.
Idaho life settlement defines a broker as a person who works exclusively on behalf of the owner of the insurance policy for a fee. The broker would negotiate with several providers in selling the policy. The broker would be paid by the funding company as a percent of the offering price.
Idaho life settlement brokers must also be registered. In addition to an online application there is a fee of $300. The registration renews every two years and there is an additional renewal fee of $80.
Other requirements are:
Full disclosure of fees and commissions
Must hold all records for five years and be available to the state department for review at any time.
Must provide specific policy and privacy disclosures to the insured prior to and during the transaction
Insured must be given the right to descind the offer up to 20 days after taking receipt of funds.
These are just the basic requirements for conducting settlement business in Idaho. Visit our LIVEpdq for more information.
Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.
Posted by The Policy Settlement Alliance on Fri, Aug 27, 2010 @ 08:56 PM
By Ian F Smith
There are 9 general rules to follow prior to conducting a Georgia life settlement transaction.
- A funding company shall comply with all state requirements and not engage in any transactions with any broker unless they are properly registered in Georgia as a life settlement broker.
- Any broker may not solicit bids or engage in any negotiations with a funding company or provider unless the provider is properly licensed as a Georgia life settlement provider.
- Any fee's paid to a broker, agent or owner of a brokerage must be a percentage of offer being made and not a percentage of the death benefit of the policy.
- No agent, broker or provider will engage in any involvement of a life insurance policy that is still in the first 2 years of issuance (contestability stage).
- It is a pure violation of Georgia life settlement rules to engage in any fraudulant settlement transaction including but not limited to, stranger originated life insurance (STOLI).
- Money paid for the sale of a life insurance policy must be paid through a licensed and approved escrow account and be paid out no longer than 3 days after funds have been placed in escrow.
- There must be a 15 day rescission period given to the seller of the policy to reconsider their decision.
- Any participant in a Georgia life settlement transaction must telephone or electronically notify the Enforcement Division of the Commissioners office if there is knowledge that a fraudulent act has been committed or there is belief that a fraudulent act will be committed.
- No person can be involved at any level in a Georgia life settlement transaction unless all appropriate licenses and registrations are current.
Each state has there own life settlement rules to follow. Begin by visiting your state department of commissioners website. Also, please visit our LIVEpdq web cast to learn more.
Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.
Posted by The Policy Settlement Alliance on Fri, Aug 27, 2010 @ 04:55 PM
By Ian F Smith
How do life settlements work - 101.
The following is a very basic answer to how do life settlements work.
First of all, the insured on the life insurance policy needs to be either, a mature senior (age 65 or older) or someone who has had a recent change in health. There are other criteria relating to the insured but these are the two basic criteria.
The insured/owner should conduct a thorough review of their personal assets and insurance policies to decide if they no longer need or want the policy, they can't afford it any more, or their personal financial situation has changed and they have exhausted ideas of how to keep the policy without any additional burden.
Next on how do life settlement work is one of the most important, choosing an experienced professional to work with. Make sure the agent is licensed and understands the market.
Once you have chosen an agent, there are several forms and applications to complete. There are 3 main areas of the process. First, an actuarial study is conducted on the insured to determine the insureds projected life expectancy. Next, illustrations are generated on the insurance asset to determine the future value of the policy. Forecasts and projections are made to see how the policy will perform going forward. Next, these items are shared with the providers (funding companies) for pricing. The providers come back with their offers and the agent and client review to see if it is acceptable.
How do life settlements work from there, well if an acceptable offer is made, then the proceeds go into an escrow account and the transfer of ownership on the policy is changed to the new buyer. Once the ownership change has been confirmed at the insurance company, then the proceeds are released to the seller.
Going forward, the new buyer must continue to make annual premiums to keep the policy in force until the death of the insured. Then at the death of the insured the buyer would receive the death benefit proceeds.
This is obviously an extremely simplified explanation of how do life settlement work.
Please visit our LIVEpdq webcast to have your policy appraised.
Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.
Posted by The Policy Settlement Alliance on Thu, Aug 26, 2010 @ 04:04 PM
By Ian F Smith
To be able to act as a Connecticut life settlement agent, broker of provider you must first hold an agent of broker license or a license with a line of authority.
A life settlement license in Connecticut expires on March of each year. A nonresident applicant must also hold a same or similar license that they would have in any other state.
Application fee's can be as high as $66 annually.
In addition to an application, a Connecticut life settlement agent must also submit an anti-fraud action plan. The plan must include:
-policies and procedures for detecting possible fraud and investigative procedures for diagnosing inconsistencies with records, applications and other activities
- policies to automatically report any fraudulent activity directly to the commissioners office.
-education and specific training for admin and personnel
- written outline of responsibilities for reporting and resolving inconsistencies.
Another Connecticut life settlement requirement includes an annual renewal application and fee of $40. And a continuing education of 15 hours every 2 years. Only resident individuals who have a life producer license are excluded from the annual 15 hour continuing education.
To act as a life settlement broker in Connecticut, you will also need a life producer registration to be able to act as a life settlement broker. The annual fee is $26.
Each state is different. To become a life settlement agent, broker or provider in Connecticut visit the state commissioners website. And visit our LIVEpdq web cast to learn more about life settlements.
Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.
Posted by The Policy Settlement Alliance on Thu, Aug 26, 2010 @ 02:08 PM
By Ian F Smith
Besides a license in life/health and annuities and a good understanding of the life insurance industry, you will need the following to learn how to become a life settlement broker.
A broker is the intermediary between the agent and the funding company. They help facilitate the purchase of and sale of a life insurance policy between the seller (insured) and the buyer (funding company or provider).
To learn how to become a life settlement broker you must do the following:
- First check with your state to see if they require a specific license to practice as a life settlement broker. Most states will require a license or certification. They may also charge a fee to process your application which is submitted through the state's insurance department. Some may also have you complete a Bio Affadavit and you will probably need an Anti-Theft Plan in place.
- Look into an accredited educational class or program. There may be on-line course available and will probably be less expensive than classroom course.
- Make sure you have all of the state appropriate insurance licenses in force. You may be required to have a life/health/annuity license. Going forward, you may also be required to have a securities license as well. As the industry evolves and more and more government regulations seeps into the system, securities regulation is not too far off.
These are just the basics to consider if you want to learn how to become a life settlement broker. Your state insurance department website is a great first place to start.
Or visit our LIVEpdq web cast to learn more.
Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.
Posted by The Policy Settlement Alliance on Thu, Aug 26, 2010 @ 02:02 PM
By Ian F Smith
Colorado Life Settlement - License Requirements
The following guidelines pertain to the basic requirements for licensing to transact a Colorado life settlement.
- An agent may not act on behalf of a client or funding company to negotiate a life settlement transaction unless the agent is in compliance with Colorado life settlement regulations regarding appropriate licensing and continuing educations requirements. See Colorado State Insurance Department for exact details.
- No one can operate as a funding company or provider unless they are appropriately license by the state of Colorado.
- An application and annual renewal application must be completed and approved prior to acting on behalf of a client or funding company and shall submit an application fee. Failure to submit appropriate fees within a timely fashion will result in an expiration of license. Funding companies must also submit annual reports that are required. Failure to do so will result in suspension of active status.
- If a funding company has settlement clients who are still alive at the time of renewal, the funding company must:
- 1. renew current license until the earlier of;
- the date the funding company sells, assigns or transfers the client's policy or,
- the death of the insured.
- 2. appoint the Colorado life settlement agent who received the compensation or another licensed funding company as assignee.
- Any funding company licensed by the state of Colorado must maintain financial responsibility to the tune of $100,000 in the form of a surety bond and must file with the state commissioners officer annually.
To be licensed to conduct a Colorado life settlement has several other requirements but this is a good place to start. To learn more visit our LIVEpdq web cast as a reference point and receive a free life settlement policy evaluation today.
Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.
Posted by The Policy Settlement Alliance on Mon, Aug 23, 2010 @ 10:47 AM
By Ian F Smith
There are a number of annual life settlement meetings going on it seems like every other month. There are 3rd annual settlement summit meetings for two days in Orlando. There are 5th annual settlement meetings in Houston. And there is a 7th annual settlement meeting in DC.
Why all the meetings? Well, it shows you that this is a major industry in it's infant stages, it has a significant place in the market and it looks like it has staying power. And since the government has not addressed its prominence yet, all of the meetings are being held to share and download information to continue to improve on it's processes and guidelines.
At these annual life settlement meetings, they bring up-to-date and comprehensive industry information to attendees. Information such as proposed legislation and implications of such, fundamental rule changes, marketing resources, domestic and international funding resources and industry-wide survey results.
Attendee's at these annual life settlement meetings are not just agents. Attendee's include brokers, funding companies, insurance carriers, investors, attorney's, underwriters and regulators. It seems that every level of the process is represented by an industry leader or head. These meetings are very productive and accomplish a lot of necessary needs. For this industry to become more legitimate it must continue to have the hard input from every person involved along the process. This too should include the clients/insured's. So next time you see an annual settlement meeting coming to a place near you, maybe you should attend.
Please visit our LIVEpdq web cast for more information.
Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.