TYPE OF LICENSE: LIFE SETTLEMENT
WHAT DOES THE STATE DEFINE AS CONTESTABLE?: 2 YEARS
WHAT IS THE REQUIRED HOLDING PERIOD?: 2 YEARS. See: ALM GL ch. 175, § 222(m).
WHEN DOES LICENSE NEED TO BE RENEWED?: N/A
IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: ALM GL ch. 175, § 220(a)(10).
IS THERE A MINIMUM PAYMENT REQUIREMENT?: NO
WHEN DOES THE MONEY NEED TO BE IN ESCROW?: ALM GL ch. 175, § 222(j). Within 3 business days after receipt from the owner of documents to effect the transfer of the policy pursuant to a life settlement contract, the life settlement provider shall pay the proceeds of the life settlement contract to an escrow or trust account managed by a trustee or escrow agent in a state or federally-chartered financial institution pending acknowledgement of the transfer by the issuer of the policy. The trustee or escrow agent shall transfer the proceeds due to the owner within 3 business days of acknowledgement of the transfer from the insurer.
IS THERE A NOTICE REQUIREMENT TO THE INSURED AFTER THE SALE?: NO
IS THERE A NOTICE REQUIREMENT TO THE CARRIER BEFORE/AFTER THE SALE?: YES – ALM GL ch. 175, § 222(b). Within 20 days after an owner executes the life settlement contract, the life settlement provider shall give written notice to the insurer that issued the insurance policy that the policy has become subject to a life settlement contract. The notice shall be accompanied by the documents required in clauses (1) and (2) of subsection (a).
Subsection (a) A life settlement provider entering into a life settlement contract with an owner of a policy, where the insured has a terminal or chronic illness or condition, shall first obtain:
(1) if the owner is the insured, a written statement from a licensed attending physician that the owner is of sound mind;
(2) a document in which the insured consents to the release of the insured’s medical records to a life settlement provider, life settlement broker or insurance producer and, if the policy was issued less than 2 years from the date of application for a life settlement contract, to the insurance company that issued the policy.
WHAT IS THE RESCISSION PERIOD?: ALM GL ch. 175, § 222(i). A life settlement contract shall provide that the owner may rescind the life settlement contract not more than 15 days after the date it was executed by all parties. Rescission, if exercised by the owner, shall be effective only if: (1) notice of the rescission is given and (2) the owner repays all proceeds and any premiums, loans and loan interest paid on account of the life settlement provider within the rescission period. If the insured dies during the rescission period, the life settlement 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 life settlement provider. Failure to give written notice of the right of rescission shall toll the right of rescission until 30 days after the written notice of the right of rescission has been given.
IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YYES – OWN – State Approved – ALM GL ch. 175, § 222(c). The request for verification of coverage shall be made on a form approved by the commissioner.
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