Sale of life insurance policies (new law)

Sometimes people who purchase a life insurance policy sell it to a third party before the policy matures. Called a viatical settlement, a new law sponsored by Rep. Joe Atkins (DFL-Inver Grove Heights) and Sen. Chris Gerlach (R-Apple Valley), modifies statutes regulating the practice.

Signed by Gov. Tim Pawlenty May 12, the law lays out definitions and licensing guidelines for brokers and life insurance providers.

Under the law, a broker or provider will need to be licensed by the state where the person selling the policy resides. Also, a licensed insurance producer in good standing will be allowed to operate as a viatical settlement broker. The law also lays out grounds for a license to be suspended, revoked or refusal to issue or renew the license of the provider, broker or agent.

The law is effective Aug. 1, 2009; but a viatical settlement provider, broker or investment agent doing business in Minnesota could continue pending application approval by the commerce commissioner as long as the application is filed by Dec 31, 2009.

HF1719/SF1539*/CH62