Generally speaking, high quality viatical settlement companies will obtain appropriate licensing as required by the states where they conduct business. The federal government does not currently regulate the viatical settlement industry. However, be aware that the federal tax treatment for a viatical settlement may be impacted by the licensing status of a viatical settlement provider. You can contact your state department of commerce to determine if licensing is required in your state. If licensing is required, they can also tell you which viatical settlement companies are currently licensed.
Providers buy policies for their own account.
A captive broker or a referral agent typically works exclusively for a single provider. Independent brokers work with a number of providers. Independence allows them to approach more than one funder to purchase a specific policy. This process increases the likelihood that a policy will be purchased and the resulting competition for a policy often produces higher offers for the policy. If you choose not to work with an independent broker, try to get more than one offer for your policy to make sure you receive a fair deal.