Texas life settlement regulation is lacking. Unlike many States across the country who have partaken in regulation reform, Texas has yet to fully regulate the settlement industry. Although Federal law does address life settlements, it is the duty of each individual State to regulate and monitor the settlement industry.
Most States including two US territories have new or updated regulation. This regulation addresses issues such as proper licensing, guidance on best business practices and fraud prevention, taxation law, contestability, and STOLI prevention. Unfortunately Texas life settlement regulation does not fully address any of these issues if at all. The term “life settlement” is not even mentioned in law.
The Texas Department of Insurance simply allows for consumers to sell life insurance policies as a Texas life settlement and mandates agents/brokers hold a certificate of registration with the State to do settlement business. The Texas DOI warns consumers and investors to be vigilant on their own.
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