The requirements for licensure as a life settlement broker are:
- A completed and signed Notification by Life Insurance Producer of Action as Life Settlement Broker (SFN 59438) form or Life Settlement Broker Business Entity Statement (SFN 54042) form;
- A completed and signed Certification of Advertising Compliance (SFN 58799) form;
- 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. § 26.1-33.4-02(11)(f) is acceptable if injured North Dakotans have actual access to the full amount at all times. Applicants intending to satisfy the requirement by a deposit of cash, certificates of deposit or securities are encouraged to contact the North Dakota Insurance Department for further information;
- An anti-fraud plan as required by N.D.C.C. § 26.1-33.4-13(7)(a)(2); and
- A nonrefundable application fee of $100.
Individual and business entity life insurance producers who have held a resident insurance producer license with a life line of authority in the producer's home state for at least one year and who hold a North Dakota non-resident producer license are eligible to notify the Insurance Commissioner of their intent to act as a life settlement broker. The North Dakota Insurance Department processes the notification as a license application and issues a license upon successful completion.
The Department refers to this as a Producer Deemed Broker Track for Licensure. To apply for a life settlement broker license under this track, complete the Notification by Life Insurance Producer of Action as Life Settlement Broker (SFN 59438) form and return it to the Department along with all required attachments and a fee of $100.
Before applying for licensure as a life settlement provider, a business entity must first be registered with the North Dakota Secretary of State.
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) form;
- Articles of Incorporation, Partnership Agreement or Articles of Organization;
- Bylaws or operating agreement;
- Certificate of Compliance or Letter of Certification from the Insurance Department of domiciliary state if required to be licensed by that state;
- Certificate of Authority from North Dakota Secretary of State;
- Agent for Service of Process (SFN 8330) form;
- Copy of financial and market conduct examination reports prepared by any regulatory agency;
- List of all licenses held by the applicant issued by any governmental entity;
- List of all controlling entities (holding companies, general partners, etc.) and the percent ownership;
- 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 percentage of overall income and expenses derived from each subsidiary;
- Balance sheets for each of the last five fiscal years. Fully describe sources and terms of each asset and liability;
- Income and expense statements for each of the last five fiscal years;
- 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;
- A full explanation of any previous or current litigation involving the applicant, any parent organization, or subsidiary;
- Copy of each life settlement contract to be used in North Dakota;
- Plan of operation to include the following:
- A complete description of marketing plans and techniques.
- A detailed description of procedures used to determine the settlement to the viator. Include a description of each criterion used to determine the settlement.
- Completed and signed Viatical Settlement Provider Individual Statement (SFN 58686) form from all owners, employees, agents or independent contractors who will be conducting the business of life settlements.
- List of all trustees or escrow agents, addresses and telephone numbers.
- An anti-fraud plan that meets the requirements of N.D.C.C. § 26.1-33.4-13, (7)(a)(2).
- Completed and signed Certification of Advertising Compliance (SFN 58799) form.
- 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 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. § 26.1-33.4-02(11)(f) is acceptable if the instruments provide access to the full amount at all times by injured North Dakotans; and
- A nonrefundable application fee of $250.
The North Dakota 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 the Department.
The license of every life settlement provider and life settlement broker must be renewed annually on or before the license anniversary date. The life settlement provider renewal fee is $100. The life settlement broker renewal fee is $12. Checks may be made payable to the North Dakota Insurance Department and sent to the Department. A license not renewed by the license anniversary date will automatically expire.
Pursuant to N.D.C.C. § 26.1-33.4-02(13) and 26.1-33.4-05, every life settlement provider must file an annual statement with the Department on or before March 1 of each year (postmark acceptable), accompanied by a $25 filing fee. Each life settlement provider shall file with the Department before March 1 of each year an annual statement containing the following information:
- The total number, aggregate face amount, and life settlement proceeds of policies settled during the immediately preceding calendar year;
- Breakdown of the information in paragraph (a) by policy issue year;
- Names of all insurance companies whose policies have been settled; and
- Names of all brokers that have settled the policies.
Information in the annual statement must be limited to those transactions where the insured is a resident of North Dakota. The annual statement may not include individual transaction data regarding the business of life settlements or information that there is a reasonable basis to believe could be used to identify the owner or the insured. 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 Department in a timely manner. The notification should include updated documents (list of individuals, SFN 58686, SFN 8330, plan of operation and anti-fraud plan) to reflect the change, as applicable.
N.D.C.C. § 26.1-33.4-04 requires that all life settlement contracts and disclosure statement forms must be filed and approved by the Commissioner.
Please refer to N.D.C.C. § 26.1-33.4 and N.D. Admin. Code § 45-16 for more information regarding North Dakota law and consultants.