Know Your Life Settlement Rules

New York

In New York, a number of new requirements took effect in 2010. The New York Insurance Law requires that life settlement providers and brokers provide consumers with an information booklet that explains what a life settlement is, advocates that consumers consider all of their options and offers tips and questions to ask. New York remains vigilant regarding so-called stranger-originated life insurance (STOLI). The state wants consumers to know that if they are asked to or plan to buy a new life insurance policy with the primary purpose of selling it for cash to a third party, then this may be a transaction that is prohibited.

Like many other states, New York requires that providers and any “life settlement intermediary” be licensed with the state and file an annual statement, among other requirements. Any life settlement provider or intermediary must file copies of business forms for approval by the state.

Agents, brokers and providers must understand that New York regulations may go beyond state borders in some instances. According to the New York Insurance Law, regulations apply to any life settlement contract made, proposed to be made, or solicited with a resident of the state or any owner physically in the state.


In Illinois, life settlement contracts and disclosure statements must be filed and approved by the state before they can be used. A person shall not operate as a settlement broker without first obtaining an insurance producer license from the director and completing the settlement broker training requirements. An insurance producer shall not operate as a settlement broker unless the producer has been duly licensed as a resident insurance producer with a life insurance line of authority in Illinois or the insurance producer’s home state for at least one year.

General guidance

Each state regulates life settlements differently, so agents need to contact their department of insurance, or equivalent, and frequently brush up on any changes in life settlement licensing and regulation in their state.

Market potential on the rise

The market for life settlements is coming back strong after several down years following the recession. Research firm Conning recently reported that the gross potential market for life settlements for this year is $198 billion, and the firm expects about $3.8 billion in total face value policies to be purchased as life settlements this year.

See also: Boomers Ready for Life Settlement Option

The baby boom generation, the 76 million Americans born between 1946 and 1964, has begun to reach retirement age, but many of them have no savings. However, the dire retirement picture for boomers is counter‐balanced by this generation’s unprecedented investment in insurance. Life insurance, and specifically life insurance settlements, can be the lifeboat.

The market for life settlements is growing and will continue to be bolstered by retiring boomers. Life insurance agents who learn and follow the newest regulations can have a tremendous impact.


Stephen E. Terrell is senior vice president of sales, marketing and public relations at The Lifeline Program, a life settlement provider based in Atlanta. Terrell oversees all aspects of marketing, including the P3 Program (Production – Performance – Profit), which enables agencies and agents to build a new market with life settlements, broadening revenue and increasing commissions. For more information, call (770) 724-7300 or visit Or follow Terrell on Twitter @LifelineProgram.

For more on life settlements, see:

Don’t Allow Term to Lapse Without Taking a Second Look

Life Settlement’s PR Savior

Business Changes Can Mean Life Settlement Opportunities

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