The NASD recently issued guidance to members concerning life settlements, a growing sector of the financial services industry. Life settlements involve the sale of existing life insurance by the insured policy owners to third parties. In the executive summary of the notice the NASD indicates that the purpose of the notice "is to remind firms and associated persons that life settlements involving variable insurance policies are securities transactions, and firms and associated persons involved in such transactions are subject to applicable NASD rules."
MetLife began offering its variable structured settlement product at the turn of the millenium. While I am not aware of any structured settlement factoring transactions involving variable structured settlement payment rights, anything is possible. I mean some companies are actually buying rights to life contingent payments! Keeping the former in mind, structured settlement brokers and settlement planners, weighing in with advice to annuitants, should be mindful of the fact that NASD rules may come into play where a variable structured settlement contract is being factored.
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