Life Settlements Act
The Idaho Life Settlements Act,found in Idaho Code Sections , took effect July 1, 2009 and will affect any person involved in selling the rights to benefits and/or ownership interests in life insurance policies where the policy owner is a resident of Idaho. Persons involved in the business of life insurance and life settlements should carefully review these code sections. Also read , Idaho Rules for the Life Settlements Act.
It is illegal for any person to act as a life settlement broker or provider for a life insurance policy owned by an Idaho resident unless the broker or provider has complied with the licensing requirements of the law.
A key part of the Idaho Life Settlement Act makes it illegal to engage in stranger originated life insurance (STOLI) transactions. A STOLI transaction is defined as an act, plan, practice or arrangement to initiate a life insurance policy for the benefit of a third party investor who, at the time the policy is written, has no insurable interest in the insured. For example, it is illegal for an investor with no insurable interest in a person to solicit the person to purchase a life insurance policy for the purpose of selling the policy to the investor. In addition, it is a violation of the Life Settlements Act to enter into a life settlement contract within two years of the date a policy was issued unless special circumstances as defined by the act exist.