Life settlement broker: a genuinely different producer license

A life settlement is the sale of an existing life insurance policy to a third party for a lump sum — more than the policy's cash surrender value, less than its death benefit. The person who arranges that sale on the policy owner's behalf is a life settlement broker (sometimes still called a viatical settlement broker), and in most states that regulate the transaction at all, it's treated as its own licensed activity — not something an ordinary life insurance producer license or property & casualty license automatically covers.

Correction (16 September 2026): an earlier version of this page cited this framework as "the NAIC Life Settlements Model Act." Its actual title, on the NAIC's own model law list, is the Viatical Settlements Model Act (#697) — a separate industry group, NCOIL, publishes its own, differently-drafted model act that uses the "Life Settlements" name. The model number and everything else on this page were accurate; only the name has been corrected.

Whose side the broker is legally on

Under the framework set out in the NAIC's Viatical Settlements Model Act (#697) — expanded in a 2007 revision to reach ordinary life settlements, not just sales by the terminally ill, which is why "life settlement" and "viatical settlement" get used almost interchangeably in practice despite the model act's own title — a life settlement broker represents the policy owner — the person selling the policy — not the settlement provider or investor buying it, and not the insurance company that issued the original policy. That's a specific, checkable representational role, distinct from a captive or independent agent's relationship to a carrier (see our captive vs. independent explainer for that separate distinction), and it's worth confirming who a broker actually represents in any specific transaction before assuming.

How an already-licensed producer typically qualifies

In a state that has adopted some version of Model #697's licensing framework, a resident producer already licensed with a life line of authority for a set minimum period — commonly at least one year — can generally begin operating as a life settlement broker by notifying the state's insurance commissioner, on a prescribed form and within a set window after starting (commonly 30 days), rather than sitting for a separate licensing exam. A person without an existing life producer license generally needs to go through the full, separate life settlement (or viatical settlement) broker licensing process instead — its own application, exam, and, in a number of states, its own ongoing continuing-education requirement distinct from the CE a life producer already completes. Which path applies, and the exact numbers involved, are state-specific and worth confirming directly against the specific state's own adopted version rather than assumed from another state.

The rescission window: real, but not one fixed national number

Separately from any state's ordinary free-look period on a new policy, life settlement law generally gives the policy owner a distinct right to rescind the settlement contract itself, on a two-part clock: a window measured from the date the contract is executed by all parties, or a shorter window measured from the date the owner actually receives the settlement proceeds, whichever comes first. The specific day counts vary meaningfully by state rather than following one uniform figure — as documented examples, Oregon's statute sets this at 60 days from execution or 30 days from receipt of proceeds, while California and Wisconsin each set it at a shorter 30 days from execution or 15 days from receipt of proceeds. Because of this real variation, and because it changes if a state amends its own statute, verify the specific window in the state whose law actually governs the contract rather than assuming any one of these figures applies elsewhere.

Compensation disclosure is part of the deal, not an extra

The Model Act framework requires a life settlement broker's compensation for the specific transaction to be disclosed to the policy owner before the contract is signed — a different, more specific disclosure than the ordinary commission-disclosure question our companion explainer covers for a standard policy sale, since here the "sale" is the existing policy itself, not a new one being purchased.

How to actually check who you're dealing with

The same core method from our main licensing guide applies, with one adjustment: search your state's Department of Insurance license lookup specifically for a "life settlement broker" or "viatical settlement broker" license category (or, for an already-licensed producer using the notification path above, confirm the notification is actually on file), rather than assuming an active life producer license alone covers this specific, separately-regulated activity.