November 8, 2018
A life settlement provider is a regulated “matchmaker” in the sale of a life insurance policy in a life settlement transaction. What does this mean? Insurance is regulated at the state level, not by the federal government. As a result, each state decides on its own insurance rules and regulations.
Currently, 43 states in the U.S. regulate the sale of a life insurance policy from the initial owner of the policy to an investor (the life settlement transaction). In these states, the party that makes the “match” between the buyer and the seller is known as a life settlement provider (or, in some states, a viatical settlement provider).
The life settlement provider works with policy sellers, whether directly or through a representative of the policy seller, to identify investors interested in purchasing the policy. The life settlement provider then facilitates the sale from the original policy owner to the investor through the proper documentation, which is carefully approved by the state insurance department, and regulated closing process. By law, the life settlement provider must be the one that sits in the middle of the process.
For more information, see our page on life settlement providers and how they fit into the big picture of the life settlements process,