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Life settlements
ND Century Code (N.D.C.C.) Chapter 26.1-33.3 governs the business of life settlements in North Dakota. An individual or business entity must be licensed as a life settlement Bbroker or a life settlement provider before engaging in the business of life settlements with any North Dakota resident. The Century Code can be accessed through the Information Resources section of this website.
Requirements for licensure as a life settlement broker - individual
An individual seeking to be licensed in North Dakota as a life settlement broker must first obtain an insurance producer license.
After becoming a licensed insurance producer, an application consisting of a request letter and the following items should be submitted:
- A completed and signed Life Settlement Broker Individual Statement (SFN 50502);
- A completed and signed Certification of Advertising Compliance (SFN 58799);
- Evidence of financial responsibility through either a surety bond executed and issued by an insurer authorized to issue surety bonds in this state or a deposit of cash, certificates of deposit or securities in the amount of $150,000. Proof that financial instruments have been filed with one or more states where the applicant is licensed as a life settlement provider or broker in accordance with the requirements in N.D.C.C. §26.1-33.3-02(6)(d) is acceptable;
- Nonrefundable application fee of $100.
Requirements for licensure as a life settlement broker - business entity
A business entity seeking to be licensed in North Dakota as a life settlement broker must first obtain an insurance producer license.
After becoming a licensed insurance producer, an application consisting of a request letter and the following items should be submitted:
- A completed and signed Life Settlement Broker Business Entity Statement (SFN 54042);
- A completed and signed Certification of Advertising Compliance (SFN 58799);
- Evidence of financial responsibility through either a surety bond executed and issued by an insurer authorized to issue surety bonds in this state or a deposit of cash, certificates of deposit or securities in the amount of $150,000. Proof that financial instruments have been filed with one or more states where the applicant is licensed as a life settlement provider or broker in accordance with the requirements in N.D.C.C. §26.1-33.3-02(6)(d) are acceptable;
- Nonrefundable application fee of $100.
Requirements for licensure as a life settlement provider
Before applying for licensure as a life settlement provider, a business entity must first be registered with the North Dakota Secretary of State (701.328.4284).
An individual or business entity seeking to be licensed in North Dakota as a life settlement provider must submit a complete application consisting of the following information:
- Completed and signed Life Settlement Provider Statement (SFN 54043) application form; N.D.C.C. § 26.1-33.3-02(2).
- Articles of Incorporation, Partnership Agreement or Articles of Organization; N.D.C.C. § 26.1-33.3-02.
- Bylaws or operating agreement; N.D.C.C. § 26.1-33.3-02.
- Certificate of Compliance or Letter of Certification from the Insurance Department of domiciliary state if required to be licensed by that state; N.D.C.C. § 26.1-33.3-02.
- Certificate of Authority from North Dakota Secretary of State; N.D.C.C. § 26.1-33.3-02.
- Agent for Service of Process (SFN 8330); N.D.C.C. § 26.1-33.3-02.
- Copy of financial and market conduct examination reports prepared by any regulatory agency; N.D.C.C. § 26.1-33.3-02.
- List of all licenses held by the applicant issued by any governmental entity; N.D.C.C. § 26.1-33.3-02.
- List of all controlling entities (holding companies, general partners) and the percent ownership; N.D.C.C. § 26.1-33.3-02.
- List of all subsidiaries, their business types, and all owners holding 10 percent or more ownership interest in each subsidiary. If wholly owned, so state. Show the percent of overall income and expenses derived from each subsidiary; N.D.C.C. § 26.1-33.3-02.
- Balance sheets for each of the last five fiscal years. Fully describe sources and terms of each asset and liability; N.D.C.C. § 26.1-33.3-02.
- Income and expense statements for each of the last five fiscal years; N.D.C.C. § 26.1-33.3-02.
- The three most recent independent audit reports. If the applicant is a new company, projected financial information, including the number of policies viaticated or expected to be viaticated, will substitute for the audit reports; N.D.C.C. § 26.1-33.3-02.
- A full explanation of any previous or current litigation involving the applicant, any parent organization, or subsidiary; N.D.C.C. § 26.1-33.3-02.
- Copy of each life settlement contract to be used in North Dakota; N.D.C.C. § 26.1-33.3-04.
- Plan of operation to include the following:
- Complete description of marketing plans and techniques. N.D.C.C. § 26.1-33.3-12 and N.D. Admin. Code chapter 45-04-13.
- Detailed description of procedures used to determine the settlement to the viator. Include a description of each criteria used to determine the settlement. N.D.C.C. §§ 26.1-33.3-02 and 26.1-33.3-07.
- Completed and signed Life Settlement Provider Individual Statement (SFN 58686) from all owners, employees, agents or independent contractors who will be conducting the business of life settlements. N.D.C.C. § 26.1-33.3-02.
- List of all trustees or escrow agents, addresses, and telephone numbers. N.D.C.C. § 26.1-33.3-02.
- An antifraud plan that meets the requirements of N.D.C.C. §26.1-33.3-13, (7)(b)(2).
- Completed and signed Certification of Advertising Compliance (SFN 58799). N.D.C.C. § 26.1-33.3-12 and N.D. Admin. Code chapter 45-04-13.
- Evidence of financial responsibility through either a surety bond executed and issued by an insurer authorized to issue surety bonds in this state or a deposit of cash, certificates of deposit or securities in the amount of $150,000. North Dakota state law requires that all bonds posted for purposes of a life settlement provider or life settlement broker license specifically authorize recovery by the North Dakota Insurance Commissioner on behalf of any person in North Dakota who sustained damages as the result of erroneous acts, failure to act, conviction of fraud, or conviction of unfair practices by the life settlement provider or life settlement broker. Proof that financial instruments have been filed with one or more states where the applicant is licensed as a life settlement provider or broker in accordance with the requirements in N.D.C.C. §26.1-33.3-02(6)(d) is acceptable;
- Nonrefundable application fee of $250. N.D.C.C. § 26.1-33.3-02(2).
The Insurance Department will issue a license if the application is approved. An application may be filed at any time throughout the year. All applications and fees should be sent to:
ND Insurance Department
Agent Licensing Division
ndlicensing@nd.gov
State Capitol, fifth floor
Dept. 401
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
701.328.2440
701.328.4880 fax
Annual renewal requirement
The license of every life settlement provider and life settlement broker must be renewed annually on or before the license anniversary date. Life settlement provider renewal fee is $100. Life settlement broker renewal fee is $12. Make checks payable to the North Dakota Insurance Department and mail to 600 E Boulevard Ave Dept 401, Bismarck ND 58505. A license not renewed by the license anniversary date will automatically expire.
Every life settlement provider must also file an annual statement with the Insurance Department on or before March 1 of each year (postmark acceptable), accompanied by a $25 filing fee. The annual statement must reflect only North Dakota business for the previous calendar year and must contain the following information:
- For each policy viaticated:
- The date the life settlement was entered into;
- The life expectancy of viator at time of contract;
- The face amount of policy;
- The amount paid by the life settlement provider to viaticate the policy and the percentage that amount represents of the face amount;
If the Viator has died:
(a) The date of death
(b) The total insurance premiums paid by life settlement provider to maintain the policy in force.
- A breakdown of policies viaticated by insurer and policy type;
- The number of secondary market versus primary transactions;
- The total number of policies viaticated;
- The amount of outside borrowings.
A written notification of any changes to the initial licensure application, such as a name change, address change, change of individuals conducting the business of life settlements, etc. must be sent to the Insurance Department in a timely manner. The notification should include updated documents (list of individuals, Life Settlement Provider Individual Statement, Agent for Service of Process, Plan of Operation, Antifraud Plan) to reflect the change, as applicable.
N.D.C.C. §26.1-33.3-04 requires that all life settlement contracts and disclosure statement forms must be filed and approved by the Insurance Commissioner.
Please direct any questions to:
Agent Licensing Division
ndlicensing@nd.gov
North Dakota Insurance Department
State Capitol, fifth floor
Dept. 401
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
701.328.2440
701.328.4880 fax
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