Life Settlement Policies
Is the sale of a life settlement policy considered a sale of a “security”?
Is there any difference in the sale of an entire life settlement policy and the sale of a “fraction” of a life settlement policy?
If the sale of a life settlement policy (or a fraction of a life settlement policy) is considered a security, What, if any, license would be required?
Where would one find the applicable law and would it vary by state?
Permalink Submitted by Al Fry on Sun, 2009-01-04 18:40
What is your definition of a life settlement policy? If I sell a regular life insurance policy on my life to a life settlement company, they own the policy and I have cash. They mey re-sell the policy to an investor, or to a group of investors. In that latter case, the SEC may consider it a security. Contact any of the large life settlement conpanies, they’ll give you all the details on licensing in your State
Permalink Submitted by Bradley Miller on Sun, 2009-01-04 20:05
I want to sell fractional shares in a life insurance poicy that was sold by the insured to a group that is packaging fractional shares of these policies and further, are creating a basket of several policies … this minimizes the risk of an insured living longer than life expectancy.
I have contacted the State Insurance Department, the SEC and the Attorney General’s office. The people I spoke to could not give me a clear answer. Once I have a satisfactory answer, I will post it on the forum.
I also understand that this varies by state and that, ignorance of the law is no excuse.
The only relevant answer I received from the person I spoke to at the Attorney General’s office was that if it qualified as a security you would probably need a series 63 license … all of the information I had prior to that is that a series 62 would be the license required.
Is it any wonder I’m confused!