Wisconsin State Guidelines

Related Resource Links

• Legislation:

https://docs.legis.wisconsin.gov/statutes/statutes/632/V/69

• Regulation:

https://oci.wi.gov/Pages/Agents/LifeSettlement.aspx

• Regulatory Forms:

Provider Application

Form Filing Checklist

Relevant State Departments of Insurance Contact Info

Wisconsin Department of Insurance –
State of Wisconsin
P.O. Box 7873
Madison, Wisconsin 53707-7873

Email the Division of Insurance
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TYPE OF LICENSE (LIFE SETTLEMENT/VIATICAL SETTLEMENT): LIFE SETTLEMENT

WHAT DOES THE STATE DEFINE AS CONTESTABLE?: 2 YEARS

WHAT IS THE REQUIRED HOLDING PERIOD?: 5 YEARS. See: Wis. Stat. § 632.69(12)(a).

WHEN DOES LICENSE NEED TO BE RENEWED?: N/A

IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: Wis. Stat. § 632.69 (8)(c)(4).

IS THERE A MINIMUM PAYMENT REQUIREMENT?: NO

WHEN DOES THE MONEY NEED TO BE IN ESCROW?: Wis. Stat. § 632.69 (11)(d). The provider shall instruct the owner to send the executed documents required to effect the change in ownership, assignment, or change in beneficiary directly to the independent escrow agent. Within 3 business days after the date the independent escrow agent receives the documents, or after the date the provider receives the documents if the owner erroneously provides the documents directly to the provider, the provider shall pay or transfer the proceeds of the life settlement into an escrow or trust account that is maintained in a state or federally chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation and managed by an independent trustee or escrow agent. Upon payment of the life settlement proceeds into the escrow account, the independent escrow agent shall deliver the original change in ownership, assignment, or change in beneficiary form to the provider or related provider trust or other designated representative of the provider. Upon the escrow agent’s receipt of acknowledgement of the properly completed transfer of ownership, assignment, or designation of beneficiary from the insurer, the independent escrow agent shall pay the life settlement proceeds to the owner.

IS THERE A NOTICE REQUIREMENT TO THE INSURED AFTER THE SALE?: YES. Wis. Stat. § 632.69 (8)(d). If the provider transfers ownership or changes the beneficiary of the policy, the provider shall communicate in writing the change in ownership or beneficiary to the insured within 20 days after the change.

IS THERE A NOTICE REQUIREMENT TO THE CARRIER BEFORE/AFTER THE SALE?: YES. Wis. Stat. § 632.69 (11)(a)(2). Within 20 days after an owner executes documents necessary to transfer any rights under a policy or within 20 days after the owner enters any agreement, option, promise, or any other form of understanding, express or implied, to settle the policy, the provider shall give written notice to the insurer that issued the policy that the policy has or will become a settled policy.

WHAT IS THE RESCISSION PERIOD?: Wis. Stat. § 632.69 (11)(b). All life settlement contracts entered into in this state shall provide the owner with an absolute right to rescind the contract before the earlier of 30 calendar days after the date on which the life settlement contract is executed by all parties or 15 calendar days after the life settlement proceeds have been sent to the owner as provided in par. (d) Rescission by the owner may be conditioned upon the owner both giving notice and repaying to the provider, within the rescission period, all proceeds of the settlement and any premiums, loans, and loan interest paid by or on behalf of the provider in connection with or as a consequence of the life settlement. If the insured dies during the rescission period, the life settlement contract is rescinded, subject to repayment, within 60 calendar days after the death of the insured, by the owner or the owners estate to the provider or purchaser of all life settlement proceeds and any premiums, loans, and loan interest that have been paid by the provider or purchaser. If a life settlement contract is rescinded under this paragraph, ownership of the policy shall revert to the owner or the owners estate if the owner is deceased, irrespective of any transfer of ownership of the policy by the owner, provider, or any other person. In the event of any rescission, if the provider has paid commissions or other compensation to a broker in connection with the rescinded life settlement contract, the broker shall refund the commissions and compensation to the provider within 5 business days following receipt of written demand from the provider, which demand shall be accompanied by the applicable document initiating the rescission within the rescission period, either the owners notice of rescission or the notice of death of the insured.

IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – NAIC. Wis. Stat. § 632.69 (11)(a)(3).