Viatical Settlement License
Viatical settlement companies purchase life insurance policies from individuals with terminal illnesses for a fair price. Learn how to obtain and maintain a viatical settlement license for your business.
A viatical settlement is an agreement in which a chronically or terminally ill person sells their life insurance to a third party for a one-time cash payment. The policyholder receives a payment greater than the cash surrender value but less than its face value. The third party becomes the beneficiary and collects the death benefit.
The agreement can include a contract for a loan or other financing transaction secured primarily by an individual or group life insurance policy, a loan by a life insurance company according to the terms of the life insurance contract, or a loan secured by the cash value of a policy.
How to Apply for a Viatical Settlement License
Viatical settlements are often regulated at the state level. The governing agency has the authority to regulate viatical settlement brokers, providers, and the contracts between the providers and viators. Most of the provisions are intended to protect the viator's interests and do not protect the investor.
The National Association of Insurance Commissioners (NAIC) also regulate viatical settlements. In 1993, the NAIC adopted the Viatical Settlements Model Regulation (#698) to provide a regulatory structure for viatical settlements. Later amendments addressed the issues of healthy consumers who wish to sell their insurance policy on the secondary market.
Many states require both individual and corporate licenses to provide viatical settlement services. If you qualify as a life settlement agency and are looking to obtain a license, there are several documents you will need to gather to complete the application process.
Requirements are different in each state, but you will likely need a detailed business plan, financial statements, and a background check. You will also need to appoint a registered agent to receive notice of lawsuits and other legal or government notices. If you're uncertain about your business' needs, the finance license experts from Harbor Compliance can help.
Maintenance and Renewal
Financial companies and professionals offering viatical settlement services must maintain their licensure following the initial application and approval process. There are a number of steps businesses need to take to ensure they are in compliance. The renewal process varies from state to state, so it is essential to be aware of the specific requirements that apply to you. There is often a renewal application, financial document requirements, and a fee. Some states require continuing education as well.
Keeping on track with your business' license renewals can be complicated, especially as a growing company. At Harbor Compliance, our managed annual reporting and registered agent services ensure accurate due date tracking and on-time filing. This way, your business will continue to be compliant with state and local requirements, and you will have the time you need to continue working and expanding your clientele.
Meeting the life settlement agency license requirements is not always an easy process. Fortunately, Harbor Compliance License Manager helps finance professionals maintain their licenses by automating repetitive tasks like tracking renewals. Through License Manager, you can also access reference data for the states in which you operate, reducing the time you need to spend researching state requirements. Contact our licensing experts today to learn more.
State Licensing Requirements
To properly apply for and maintain a license, it is imperative to stay on top of your requirements. Click on the link below to view licensing information in your state.
Independent Insurance Agents and Brokers of America (Big “I”)
Advocacy group of independent insurance brokers and agents.
National Association of Insurance and Financial Advisors (NAIFA)
Professional association that advocates for favorable regulatory conditions for insurance agents and financial advisors.
National Association of Insurance Companies (NAIC)
A standard setting and regulatory support organization that is governed by state insurance regulators.
National Association of Professional Insurance Agents (PIA)
Professional association that provides education and advocacy for insurance agents throughout the United States.
National Insurance Producer Registry (NIPR)
An affiliate of the NAIC that provides streamlined and uniform producer licensing processes.