1.The provider shall provide in writing, in a separate document that is signed by the
owner and provider, the following information to the owner no later than the date the
life settlement contract is signed by all parties:
a.The fact that possible alternatives to life settlement contracts exist, including
accelerated benefits offered by the issuer of the life insurance policy.
b.The fact that some or all of the proceeds of a life settlement contract may be
taxable and that assistance should be sought from a professional tax adviser.
c.The fact that the proceeds from a life settlement contract could be subject to the
claims of creditors.
d.The fact that receipt of proceeds from a life settlement contract may adversely
affect the recipient's eligibility for public assistance or other go
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1. The provider shall provide in writing, in a separate document that is signed by the
owner and provider, the following information to the owner no later than the date the
life settlement contract is signed by all parties:
a. The fact that possible alternatives to life settlement contracts exist, including
accelerated benefits offered by the issuer of the life insurance policy.
b. The fact that some or all of the proceeds of a life settlement contract may be
taxable and that assistance should be sought from a professional tax adviser.
c. The fact that the proceeds from a life settlement contract could be subject to the
claims of creditors.
d. The fact that receipt of proceeds from a life settlement contract may adversely
affect the recipient's eligibility for public assistance or other government benefits
or entitlements and that advice should be obtained from the appropriate
agencies.
e. The fact the owner has the right to rescind a life settlement contract before the
earlier of sixty calendar days after the date upon which the life settlement contract
is executed by all parties or thirty calendar days after the life settlement proceeds
have been delivered to the escrow agent by or on behalf of the provider as
provided in subsection 11 of section 26.1-33.4-10. Rescission, if exercised by the
owner, is effective only if both notice of the rescission is given and the owner
repays all proceeds and any premiums, loans, and loan interest paid on account
of the provider within the rescission period. If the insured dies during the
rescission period, the contract is deemed to have been rescinded subject to
repayment by the owner or the owner's estate of all proceeds and any premiums,
loans, and loan interest to the provider.
f. The fact that proceeds will be sent to the owner within three business days after
the provider has received the insurer's or group administrator's acknowledgement
that ownership of the policy or interest in the certificate has been transferred and
the beneficiary has been designated in accordance with the terms of the life
settlement contract.
g. The fact that entering into a life settlement contract may cause other rights or
benefits, including conversion rights and waiver of premium benefits, that may
exist under the policy or certificate of a group policy to be forfeited by the owner
and that assistance should be sought from a professional financial adviser.
h. The amount and method of calculating the compensation paid or to be paid to the
broker, or any other person acting for the owner in connection with the
transaction, wherein the term compensation includes anything of value paid or
given.
i. The date by which the funds will be available to the owner and the transmitter of
the funds.
j. The fact that the commissioner shall require delivery of a buyer's guide or a
similar consumer advisory package in the form prescribed by the commissioner to
owners during the solicitation process.
k. The disclosure document must contain the following language:
All medical, financial, or personal information solicited or obtained by a
provider or broker about an insured, including the insured's identity or the
identity of family members, a spouse, or a significant other may be disclosed
as necessary to effect the life settlement contract between the owner and
provider. If you are asked to provide this information, you will be asked to
consent to the disclosure. The information may be provided to someone who
buys the policy or provides funds for the purchase. You may be asked to
renew your permission to share information every two years.
l. The fact that the commissioner shall require providers and brokers to print
separate signed fraud warnings on their applications and on their life settlement
contracts the following statement:
Any person that knowingly presents false information in an application for
insurance or life settlement contract is guilty of a crime and may be subject
to fines and confinement in prison.
m. The fact that the insured may be contacted by either the provider or broker or its
authorized representative for the purpose of determining the insured's health
status or to verify the insured's address. This contact is limited to once every
three months if the insured has a life expectancy of more than one year, and no
more than once per month if the insured has a life expectancy of one year or less.
This contact may be made only by a provider or broker licensed in the state in
which the owner resided at the time of the settlement or by the authorized
representative of such a provider or broker.
n. The affiliation, if any, between the provider and the issuer of the insurance policy
to be settled.
o. That a broker represents exclusively the owner, and not the insurer or the
provider or any other person, and owes a fiduciary duty to the owner, including a
duty to act according to the owner's instructions and in the best interest of the
owner.
p. The document must include the name, address, and telephone number of the
provider.
q. The name, business address, and telephone number of the independent
third-party escrow agent, and the fact that the owner may inspect or receive
copies of the relevant escrow or trust agreements or documents.
r. The fact that a change of ownership could in the future limit the insured's ability to
purchase future insurance on the insured's life because there is a limit to how
much coverage insurers will issue on one life.
s. If an insurance policy to be settled has been issued as a joint policy or involves
family riders or any coverage of a life other than the insured under the policy to
be settled, that the owner must be informed of the possible loss of coverage on
the other lives under the policy and must be advised to consult with the owner's
insurance producer or the insurer issuing the policy for advice on the proposed
settlement.
t. The dollar amount of the current death benefit payable to the provider under the
policy or certificate. If known, the provider also shall disclose the availability of
any additional guaranteed insurance benefits, the dollar amount of any accidental
death and dismemberment benefits under the policy or certificate, and the extent
to which the owner's interest in those benefits will be transferred as a result of the
viatical settlement contract.
u. Any affiliations or contractual arrangements between the provider and the
purchaser.
2. The written disclosures must be conspicuously displayed in any life settlement contract
furnished to the owner by a provider, including any affiliations or contractual
arrangements between the provider and the broker.
3. A broker shall provide the owner and the provider with at least the following
disclosures no later than the date the life settlement contract is signed by all parties.
The disclosures must be conspicuously displayed in the life settlement contract or in a
separate document signed by the owner and provide the following information:
a. The name, business address, and telephone number of the broker.
b. A full, complete, and accurate description of all the offers, counteroffers,
acceptances, and rejections relating to the proposed life settlement contract.
c. A written disclosure of any affiliations or contractual arrangements between the
broker and any person making an offer in connection with the proposed life
settlement contracts.
d. The name of each broker who receives compensation and the amount of
compensation received by that broker, which compensation includes anything of
value paid or given to the broker in connection with the life settlement contract.
e. A complete reconciliation of the gross offer or bid by the provider to the net
amount of proceeds or value to be received by the owner. For the purpose of this
section, gross offer or bid means the total amount or value offered by the provider
for the purchase of one or more life insurance policies, inclusive of commissions
and fees.
f. The failure to provide the disclosures or rights described in this section is deemed
an unfair trade practice pursuant to section 26.1-33.4-16.