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2003 SESSION

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HB 2268 Viatical Settlement Act.

Introduced by: Frank D. Hargrove, Sr. | all patrons    ...    notes | add to my profiles

SUMMARY AS INTRODUCED:

Viatical Settlement Act. Replaces the existing Viatical Settlement Act with a more comprehensive version based on model legislation adopted by the National Association of Insurance Commissioners (NAIC) in 2000. A viatical settlement contract is an agreement by which the owner of an insurance policy may accept an immediate cash payment in exchange for the assignment, transfer, sale, or other conveyance of the death benefit or ownership of the insurance policy. The proposal permits the viatication of life insurance policies within 2 years following their issuance upon the occurrence of several events, such as divorce or attaining age 65, that are not currently authorized. Currently, such policies may be viaticated within the 2-year period only if the viator is terminally ill or chronically ill. Variations from the NAIC model will (i) allow any person with a life insurance producer's license to be deemed to hold a viatical settlement broker's license upon notifying the State Corporation Commission and paying applicable fees; (ii) permit viatical settlement providers to appoint a viatical settlement provider representative, who negotiate viatical settlement contracts with viators on behalf of providers; (iii) require insurers to inform policy owners who may be considering canceling their policies or letting them lapse of the opportunity of a viatical settlement. Administrative matters, including procedures for obtaining cease and desist orders, the conduct of examinations, issuing subpoenas, retaining experts to assist in examinations, confidentiality of materials, conflicts of interest, and liability of the Commission and its examiners, are addressed in detail. The measure will become effective September 1, 2003. This bill is incorporated into HB2613.


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