Washington State Guidelines

Related Resource Links

• Legislation:

https://app.leg.wa.gov/rcw/default.aspx?cite=48.102

• Regulation:

https://apps.leg.wa.gov/wac/default.aspx?cite=284

• Regulatory Forms:

Life Settlement Provider Application

Life Settlement Provider Anti-Fraud Plan Requirements

Biographical Affidavit

Use of Remote Online Notary

Relevant State Departments of Insurance Contact Info

Washington Department of Insurance –
P.O. Box 40255
Olympia, Washington 98504-0255

Email the Division of Insurance
Visit Website

TYPE OF LICENSE (LIFE SETTLEMENT/VIATICAL SETTLEMENT): LIFE SETTLEMENT

WHAT DOES THE STATE DEFINE AS CONTESTABLE?: 2 YEARS

WHAT IS THE REQUIRED HOLDING PERIOD?: 2 YEARS. See: RCW § 48.102.110(14).

WHEN DOES LICENSE NEED TO BE RENEWED?: RCW § 48.102.011(3). All provider licenses continue in force until suspended, revoked, or not renewed. A license is subject to renewal annually on the first day of July upon application of the provider and payment of a renewal fee of two hundred fifty dollars for deposit into the general fund. If not so renewed, the license automatically expires on the renewal date.

(a) If the renewal fee is not received by the commissioner prior to the expiration date, the pro-vider must pay to the commissioner in addition to the renewal fee, a surcharge as follows:

(i) For the first thirty days or part thereof delinquency the surcharge is fifty percent of the renewal fee;

(ii) For the next thirty days or part thereof delinquency the surcharge is one hundred percent of the renewal fee;

(b) If the renewal fee is not received by the commissioner after sixty days but prior to twelve months after the expiration date the payment of the renewal fee is for reinstatement of the license and the provider must pay to the commissioner the renewal fee and a surcharge of two hundred percent.

IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: RCW § 48.102.080(3)(d).

IS THERE A MINIMUM PAYMENT REQUIREMENT?: YES. WAC § 284-97-050. Standards for Evaluating Reasonability of Compensation. In order to assure that benefits offered to an owner who is terminally or chronically ill are reasonable in relation to the rate, fee, or other compensation that is charged, any payout shall be no less than the greater of the amounts defined in subsections (1) and (2) of this section.

(1) Payouts shall be no less than the following percentage of the expected death benefit under the insurance policy, net of loans. The following are minimum standards and shall not be presumed to be proof of fairness as to any specific
transaction.

(a) If the insured’s life expectancy is less than six months, then the percentage of the expected death benefit under the insurance policy, net of loans, to be received by the owner shall be no less than eighty percent.

(b) If the insured’s life expectancy is at least six months, but less than twelve months, then the percentage of the expected death benefit under the insurance policy, net of loans, to be received by the owner shall be no less than seventy percent.

(c) If the insured’s life expectancy is at least twelve months, but less than eighteen months, then the percentage of the expected death benefit under the insurance policy, net of loans, to be received by the owner shall be no less than sexty-five percent.

(d) If the insured’s life expectancy is at least eighteen months, but less than twenty-five months, then the percentage of the expected death benefit under the insurance policy, net of loans, to be received by the owner, shall be no less than sixty percent.

(2) Payouts shall be no less than the greater of the cash surrender value or accelerated death benefit under the insurance policy.

WHEN DOES THE MONEY NEED TO BE IN ESCROW?: RCW § 48.102.110(10). 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?: NO

IS THERE A NOTICE REQUIREMENT TO THE CARRIER BEFORE/AFTER THE SALE?: YES. RCW § 48.102.110(7). Within twenty 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 be-come subject to a life settlement contract. The notice shall be accompanied by the documents required by RCW 48.102.090(2).

WHAT IS THE RESCISSION PERIOD?: RCW § 48.102.110(9). All life settlement contracts entered into in this state shall provide that the owner may rescind the contract on or before fifteen days after the date it is executed by all parties thereto. Rescission, if exercised by the owner, is effective only if both notice of the 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 re-scission period, the contract is considered 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 – STATE. RCW 48.102.110(2) and WAC 284-97-920.