Pursuant to Senate Bill 1010, the required surety bond for Oklahoma viatical settlement brokers is now fixed at $50,000, as opposed to the previous requirement stating the bond amount was variable as long as it did not exceed $50,000. This new requirement is effective as of November 1, 2019.
Why is a surety bond required of Oklahoma viatical settlement brokers?
A surety bond is required of Oklahoma viatical settlement brokers to demonstrate to the Insurance Department that the broker is financially responsible. Like other license and permit bonds, the surety bond guarantees to the state and consumers that money is available to cover damages in the event the broker does not abide by all applicable rules and regulations.
How much does a viatical settlement broker bond cost?
A $50,000 viatical settlement broker bond can cost as little as 1% of the total bond amount, meaning the broker would pay $500 for his or her surety bond. However, this 1% rate is typically only given to those determined to be highly qualified following and underwriter’s review of the applicant’s credit. Applicants who are less qualified are typically approved for between 3-5% of the total bond amount, although in some cases, the cost can be as high as 10% of the bond amount.
One thing brokers should keep in mind is that their bond must be renewed annually, meaning an underwriter will review the application each year and determine the premium to be paid by the broker. This means an applicant may pay less if their financial situation as improved over the course of the previous year.
How to become a viatical settlement broker
To become a viatical settlement broker, applicants must first get licensed as an Oklahoma life insurance producer. A designated responsible licensed producer (DRLP) is required if the broker is a business entity such as a limited liability company or corporation.
Once a producer license is obtained, applicants can complete the viatical settlement broker application.
- Include the Oklahoma producer life license number along with the name of the business
- Provide evidence of a $50,000 surety bond
- Include a certificate of good standing from a legal entity in the applicant’s state
- If applicable, disclose the identities of all stockholders, employees, partners, officers, and affiliated members of the business
- Required information can be found on the application form
- For each identity disclosed, the corresponding signature must be included on the Declaration page of the application
- Proof of the surety bond, certificate of good standing, all disclosed identities, and the anti-fraud plan must accompany the application
A $500 license fee is required to be paid by resident and non-resident applicants, and an additional $10 must be paid by non-residents to cover the service of process fee.
The Commissioner also requires a detailed plan of operation before a broker can receive their license.
How to renew a viatical settlement broker license
The renewal period for an existing viatical settlement broker license starts 90 days prior to the license’s expiration date for both residents and non-residents, and all licensing requirements must be completed 30 days prior to the license’s expiration date.
There is no grace period for licenses that are allowed to lapse. However, licenses can be reactivated if they have been expired for less than a year. All licensing requirements must be completed 48 hours prior to submitting a reactivation application. Brokers will also have to pay double their original licensing fee.
Upon reactivating the license, the original expiration date will remain the same. To learn more about reactivating an expired license, brokers should visit the Oklahoma Reactivation Application Process Page.
Need to get an Oklahoma viatical settlement provider surety bond?
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