California State Guidelines

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CURRENT LEGISLATION

REGULATORY FORMS:

• • Life Settlement Licensee Disclosure to Life Settlement Applicant
  • Life Settlement Broker Disclosure to Owner and Insured
  • Life Settlement Provider Disclosure to Owner
  • Life Settlement Provider Annual Statement
  • Verification of Coverage for Life Insurance Policies
  • Appointment of Agent for Service of Process
  • Individual Affidavit
  • Live Scan Service Request

Relevant State Departments of Insurance Contact Info

California Department of Insurance
300 Capitol Mall, 17th Floor
Sacramento, CA 95814

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TYPE OF LICENSE LIFE SETTLEMENT

WHAT DOES THE STATE DEFINE AS CONTESTABLE?: 2 YEARS

WHAT IS THE REQUIRED HOLDING PERIOD?: 2 YEARS. See: Cal Ins Code § 10113.3(m).

WHEN DOES LICENSE NEED TO BE RENEWED?:Cal Ins Code § 2548.3(c). On each year following the issuance of the
original license, a provider shall pay the renewal fee of $ 199 and shall renew its license.

IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: Cal Ins Code § 10113.2(e).

IS THERE A MINIMUM PAYMENT REQUIREMENT?: NO

WHEN DOES THE MONEY NEED TO BE IN ESCROW?: Cal Ins Code § 10113.3(j). Within three business days after receipt
from the owner of documents to effect the transfer of the insurance policy, the provider shall pay the proceeds of the
settlement to an escrow or trust account managed by a trustee or escrow agent in a state or federally chartered
financial institution pending acknowledgment of the transfer by the issuer of the policy. The trustee or escrow agent
shall be required to transfer the proceeds due to the owner within three business days of acknowledgment of the
transfer from the insurer.

IS THERE A NOTICE REQUIREMENT TO THE INSURED AFTER THE SALE?: CCR § 2548.13. Provider’s Obligation to Notify
Insured of Sale of Policy.
If the provider transfers ownership or changes the beneficiary of the insurance policy, the provider shall communicate in
writing the change in ownership or beneficiary to the insured within 20 days after the change. The written
communication shall identify the new owner or beneficiary.

IS THERE A NOTICE REQUIREMENT TO THE CARRIER BEFORE/AFTER THE SALE?: Cal Ins Code § 10113.3(g). Within 20
days after an owner executes the life settlement contract, the provider shall give written notice to the insurer that
issued that insurance policy that the policy has become subject to a life settlement contract. The notice shall be
accompanied by the documents required by subdivision (d) of Section 10113.2.

WHAT IS THE RESCISSION PERIOD?: Cal Ins Code §10113.2(r). Any person who enters into a life settlement with a life
settlements licensee shall have the absolute right to rescind the settlement within 30 days of the date it is executed by
all parties and the owner has received all required disclosures, or 15 days from receipt by the owner of the proceeds of
the settlement, whichever is sooner, and any waiver or settlement language contrary to this subdivision shall be void.
Rescission, if exercised by the owner, is effective only if both notice of rescission is given and the owner repays all
proceeds and any premiums, loans, and loan interest paid on account of the provider within the rescission period. If the
insured dies during the rescission period, the contract shall be deemed to have been rescinded subject to repayment by
the owner or the owner’s estate of all proceeds and any premiums, loans, and loan interest to the provider.

IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – California has a state-developed VOC Form or The request for verification of coverage must be made on a form
approved by the commissioner. See: Cal Ins Code § 10113.3(b), CCR § 2548.15 and CCR § 2548.31.