The US life settlement industry’s secondary market operates within a regulatory framework that exists primarily at the state level. It consists of specific guidelines and requirements set forth by each states insurance regulator. These regulations provide oversight to standardise life settlement transactions, ensure transparency, prevent fraud, and protect policyholders’ interests. Laws stipulate eligibility for a life settlement, require life settlement providers and brokers to be licensed, define transaction procedures, and mandate disclosures to policy owners, among other things. Currently, 43 US States and the US territory of Puerto Rico have a regulated secondary market for life settlements.

Only five US states – Alabama, Missouri, South Carolina, South Dakota, and Wyoming, plus the District of Columbia – do not have specific regulatory measures for the life settlement market. This does not necessarily mean that life settlements are unregulated in these states, but rather that there are no explicit state laws governing these transactions. Even in these states, life settlements may still be subject to other insurance or securities regulations in place and transactions occur regularly.