(1)(a) A viatical settlement provider
entering into a viatical settlement contract shall first obtain:
(I)If the viator is the insured, a written statement from a licensed attending
physician that the viator is of sound mind and under no constraint or undue
influence to enter into a viatical settlement contract; and
(II)A document in which the insured consents to the release of his or her
medical records to a viatical settlement provider or insurance producer and, if the
policy was issued less than two years after the date of application for a viatical
settlement contract, to the insurance company that issued the policy.
(b)The insurer shall respond to a request for verification of coverage
submitted by a viatical settlement provider or life insurance producer not later than
Free access — add to your briefcase to read the full text and ask questions with AI
(1) (a) A viatical settlement provider
entering into a viatical settlement contract shall first obtain:
(I) If the viator is the insured, a written statement from a licensed attending
physician that the viator is of sound mind and under no constraint or undue
influence to enter into a viatical settlement contract; and
(II) A document in which the insured consents to the release of his or her
medical records to a viatical settlement provider or insurance producer and, if the
policy was issued less than two years after the date of application for a viatical
settlement contract, to the insurance company that issued the policy.
(b) The insurer shall respond to a request for verification of coverage
submitted by a viatical settlement provider or life insurance producer not later than
thirty calendar days after the date the request is postmarked. The request for
verification of coverage shall be made on a form approved by the commissioner.
The insurer shall complete and issue the verification of coverage or indicate in
which respects it is unable to respond.
(c) Before or at the time of execution of the viatical settlement contract, the
viatical settlement provider shall obtain a witnessed document in which the viator
consents to the viatical settlement contract, represents that the viator has a full
and complete understanding of the viatical settlement contract, acknowledges that
the viator has a full and complete understanding of the benefits of the policy,
acknowledges that the viator is entering into the viatical settlement contract freely
and voluntarily, and, for persons with a terminal or chronic illness or condition,
acknowledges that the insured has a terminal or chronic illness and that the
terminal or chronic illness or condition was diagnosed after the policy was issued.
(d) If a life insurance producer performs any of the activities required of the
viatical settlement provider by this subsection (1), the viatical settlement provider is
deemed to have fulfilled the requirements of this section.
(2) Medical information solicited or obtained by a licensee is subject to the
applicable provisions of state law relating to confidentiality of medical or protected
health information.
(3) A viatical settlement contract entered into in this state shall provide the
viator with an unconditional right to rescind the contract before the earlier of thirty
calendar days after the date when the viatical settlement contract is executed by
all parties or fifteen calendar days after the receipt of the viatical settlement
proceeds by the viator. Rescission, if exercised by the viator, is effective only if both
notice of the rescission is given and repayment of all proceeds and any premiums,
loans, and loan interest to the viatical settlement provider is made within the
rescission period. If the insured dies during the rescission period, the viatical
settlement contract shall be deemed to have been rescinded if repayment of all
viatical settlement proceeds and any premiums, loans, and loan interest to the
viatical settlement provider is made within forty-five days after the end of the
rescission period.
(4) The viatical settlement provider shall instruct the viator to send the
executed documents required to effect the change in ownership, assignment, or
beneficiary directly to an independent escrow agent. If the viator erroneously
provides the documents directly to the viatical settlement provider, the viatical
settlement provider shall immediately notify the escrow agent and shall pay or
transfer the proceeds of the viatical settlement contract into an escrow or trust
account maintained in a state or federally chartered financial institution whose
deposits are insured by the federal deposit insurance corporation within three
business days after the date the escrow agent receives the documents, or after the
date the viatical settlement provider receives the documents. Upon payment of the
viatical settlement proceeds into the escrow account, the escrow agent shall
deliver the original change in ownership, assignment, or beneficiary forms to the
viatical settlement provider or related provider trust. Upon the escrow agent's
receipt of the acknowledgment of the properly completed transfer of ownership,
assignment, or designation of beneficiary from the insurance company, the escrow
agent shall pay the viatical settlement proceeds to the viator.
(5) Failure to tender consideration to the viator for the viatical settlement
contract within the time required renders the viatical settlement contract voidable
by the viator for lack of consideration until consideration is tendered to and
accepted by the viator.
(6) A contact with the insured, for the purpose of determining the health
status of the insured by the viatical settlement provider after the viatical
settlement contract has been executed, may be made only by the licensed viatical
settlement provider or its authorized representatives and is limited to once every
three months for insureds with a life expectancy of more than one year, and not
more than once each month for insureds with a life expectancy of one year or less.
The viatical settlement provider shall explain the procedure for these contacts at
the time of entry into the viatical settlement contract. The limitations provided for
in this subsection (6) do not apply to a contact with an insured for reasons other
than determining the insured's health status. A viatical settlement provider is
responsible for the actions of his or her authorized representatives.