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Regulation and Compliance > State Regulation

Ask the expert: which state governs the settlement?

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The question was: My customer bought his life policy at least 20 years ago in another state than the one in which he now lives and where I practice. Can he settle the policy here or does he have to go back to the original state to do that?

The answer is: It is generally the laws of a policyowner’s current state of residence that would regulate the sale of a life insurance policy in the secondary market. I am not aware of any state law or regulation which would require a policyowner to return to the state where the policy was issued in order to consummate a life settlement.

Many states do prohibit the facilitation of change of state of ownership of a policy or the state of residency of a seller to a state or jurisdiction that does not have a law similar to the initial state, for the express purposes of evading or avoiding the provisions of the initial state’s laws.

As is always the case, a policyowner should consult with his or her legal advisors in order to confirm compliance with all legal requirements to selling a life insurance policy.

Michael Freedman
Senior Vice President, Government Affairs
Fort Washington, Pa.
[email protected]


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