The inevitable impact of increased state regulation of life insurance settlements will be a shakeout in the industry, says Alan Buerger, CEO of Coventry First L.L.C., Fort Washington, Pa.
Compliance is expensive, Buerger points out. “We have eight people in compliance,” he says. “A lot of companies cannot afford that.”
With most states regulating the life insurance settlement market, 85% of the U.S. population now lives in regulated states, Buerger points out.
He sees increased regulation as part of the normal evolution of the industry. He believes it will lead to more settlement firms specializing in doing business in limited regions of the country rather than nationally because the cost of doing business on a national scale will be prohibitive for most settlement providers. One result will be fewer national settlement providers and more regional firms.