1. a. A viatical settlement provider entering into a viatical settlement contract shall first
obtain all of the following:
(1)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.
(2)A document in which the insured consents to the release of the insured’s medical
§508E.10, VIATICAL SETTLEMENT CONTRACTS 16
records to a licensed viatical settlement provider, viatical settlement broker, and, if the policy
was issued less than two years from the date of application for a viatical settlement contract,
the insurance company that issued the life insurance policy covering the life of the insured.
b. Within twenty days after a viator executes do
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1. a. A viatical settlement provider entering into a viatical settlement contract shall first
obtain all of the following:
(1) 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.
(2) A document in which the insured consents to the release of the insured’s medical
§508E.10, VIATICAL SETTLEMENT CONTRACTS 16
records to a licensed viatical settlement provider, viatical settlement broker, and, if the policy
was issued less than two years from the date of application for a viatical settlement contract,
the insurance company that issued the life insurance policy covering the life of the insured.
b. Within twenty days after a viator executes documents necessary to transfer any rights
under an insurance policy or within twenty days of entering any agreement, option, promise,
or any other form of understanding, expressed or implied, to viaticate the policy, the viatical
settlement provider shall give written notice to the insurer that issued that insurance policy
that the policy has or will become a viaticated policy. The notice shall be accompanied by the
documents required by paragraph “c”.
c. The viatical provider shall deliver a copy of the medical release required under
paragraph “a”, subparagraph (2), a copy of the viator’s application for the viatical settlement
contract, the notice required under paragraph “b”, and a request for verification of coverage
to the insurer that issued the life policy that is the subject of the viatical transaction. The
national association of insurance commissioners form for verification of coverage shall be
used unless another form is developed and approved by the commissioner.
d. The insurer shall respond to a request for verification of coverage submitted on an
approved form by a viatical settlement provider or viatical settlement broker within thirty
days of the date the request is received and shall indicate whether, based on the medical
evidence and documents provided, the insurer intends to pursue an investigation at this
time regarding the validity of the insurance contract or possible fraud. The insurer shall
accept a request for verification of coverage made on a national association of insurance
commissioners form or any other form developed and approved by the commissioner.
The insurer shall accept an original, facsimile, or electronic copy of such request and
any accompanying authorization signed by the viator. A failure by the insurer to meet its
obligations under this subsection shall be a violation of sections 508E.11 and 508E.17.
e. Prior to 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, that the viator has a full and complete understanding
of the benefits of the life insurance 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
or condition and that the terminal or chronic illness or condition was diagnosed after the life
insurance policy was issued.
f. If a viatical settlement broker performs any of these activities required of the
viatical settlement provider, the viatical settlement provider is deemed to have fulfilled the
requirements of this section.
2. All medical information solicited or obtained by any licensee shall be subject to the
applicable provisions of state law relating to confidentiality of medical information, including
section 505.8.
3. All viatical settlement contracts entered into in this state shall provide the viator with
an absolute right to rescind the contract before the earlier of thirty days after the date
upon which the viatical settlement contract is executed by all parties or fifteen days after
the viatical settlement proceeds have been sent to the viator as provided in subsection 4.
Rescission by the viator may be conditioned upon the viator both giving notice and repaying
to the viatical settlement provider within the rescission period all viatical settlement
proceeds, and any premiums, loans, and loan interest paid by or on behalf of the viatical
settlement provider in connection with or as a consequence of the viatical settlement. If the
insured dies during the rescission period, the viatical settlement contract shall be deemed to
have been rescinded, subject to repayment to the viatical settlement provider or purchaser of
all viatical settlement proceeds, and any premiums, loans, and loan interest that have been
paid by the viatical settlement provider or purchaser, which shall be paid within sixty days of
the death of the insured. In the event of any rescission, if the viatical settlement provider has
paid commissions or other compensation to a viatical settlement broker in connection with
the rescinded transaction, the viatical settlement broker shall refund all such commissions
and compensation to the viatical settlement provider within five business days following
17 VIATICAL SETTLEMENT CONTRACTS, §508E.11
receipt of written demand from the viatical settlement provider, which demand shall be
accompanied by either the viator’s notice of rescission if rescinded at the election of the
viator, or a notice of the death of the insured if rescinded by reason of the death of the
insured within the applicable 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 change in beneficiary
directly to the independent escrow agent. Within three business days after the date the
escrow agent receives the document, or from the date the viatical settlement provider
receives the documents, if the viator erroneously provides the documents directly to the
viatical settlement provider, the viatical settlement provider shall pay or transfer the viatical
settlement proceeds 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. Upon payment of the viatical settlement proceeds into the escrow account,
the escrow agent shall deliver the original change in ownership, assignment, or change
in beneficiary forms to the viatical settlement provider or related provider trust, or other
designated representative of the viatical settlement provider. 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. A failure to tender consideration to the viator for the viatical settlement contract within
the time set forth in the disclosure pursuant to section 508E.8, subsection 1, paragraph “g”,
renders the viatical settlement contract voidable by the viator for lack of consideration until
the time consideration is tendered to and accepted by the viator. Funds shall be deemed sent
by a viatical settlement provider to a viator as of the date that the escrow agent either releases
funds for wire transfer to the viator or places a check for delivery to the viator via the United
States postal service or other nationally recognized delivery service.
6. A contact with the insured for the purpose of determining the health status of the
insured by the viatical settlement provider or viatical settlement broker after the viatical
settlement has occurred shall only be made by the viatical settlement provider or viatical
settlement broker licensed pursuant to section 508E.3 or its authorized representatives and
shall be limited to once every three months for insureds with a life expectancy of more than
one year, and to no more than once per month for insureds with a life expectancy of one
year or less. The viatical settlement provider or viatical settlement broker shall explain the
procedure for these contacts at the time the viatical settlement contract is entered into. The
limitations set forth in this subsection shall not apply to any contact with an insured for
reasons other than determining the insured’s health status. A viatical settlement provider
and a viatical settlement broker shall be responsible for the actions of their authorized
representatives.