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A life settlement, also referred to as a viatical settlement, is a transaction involving the sale of an interest in a life insurance policy by the owner of the policy. The Life Settlements Act contains a detailed explanation of what types of contracts will be considered life settlement contracts for regulatory purposes. 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 Settlements 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 a 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 exist (as defined by the act.) Idaho offers both a Life Settlement Broker license and a Life Settlement Provider license.


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