Is the buying and selling of existing life insurance policies regulated?
Not on a national level, but individually in many states yes. The National Association of Insurance Commissioners, representing insurance commissioners from all 50 states, adopted the Model Act which has been partially adopted in as many as 29 states. Regulation of life settlements is generally administered through the respective insurance departments of each state. Life settlement statutes in most states require life settlement providers to obtain a license from the state in order to enter into life settlement transaction. To obtain a license, providers are required to submit extensive information on the company and its principles, which is then reviewed by the state’s department of insurance. In addition, all forms of application, purchase agreement, and other ancillary documents that a provider intends to use for a life settlement transaction must be approved for use by state regulators.
