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2003 SESSION

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HB 2613 Viatical Settlement Act.

Introduced by: L. Preston Bryant, Jr. | all patrons    ...    notes | add to my profiles | history

SUMMARY AS PASSED:

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. The measure authorizes persons who are licensed by the State Corporation Commission as viatical settlement providers and viatical settlement brokers to negotiate, effectuate, and assume responsibility for viatical settlement contracts. 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. This measure regulates viatical settlements regardless of whether the transaction involves a chronically or terminally ill person. Other provisions (i) adopt new definitions that recognize the securitization activities of viatical settlement brokers and providers, (ii) expand notice and disclosure requirements, and (iii) require brokers and providers to develop anti-fraud plans. Provisions of the act that differ from the NAIC model include (i) specifying that this act does not preempt the Virginia Securities Act and (ii) prohibiting the viatication of life insurance policies that are less than two years old except in limited circumstances, including the chronic or terminal illness of the insured. Life and annuities insurance agents are permitted to be licensed as viatical settlement brokers. This bill incorporates HB 2268.

SUMMARY AS PASSED HOUSE:

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. The measure authorizes persons who are licensed by the State Corporation Commission as viatical settlement providers and viatical settlement brokers to negotiate, effectuate, and assume responsibility for viatical settlement contracts. 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. This measure regulates viatical settlements regardless of whether the transaction involves a chronically or terminally ill person. Other provisions (i) adopt new definitions that recognize the securitization activities of viatical settlement brokers and providers, (ii) expand notice and disclosure requirements, and (iii) require brokers and providers to develop anti-fraud plans. Provisions of the act that differ from the NAIC model include (i) specifying that this act does not preempt the Virginia Securities Act and (ii) prohibiting the viatication of life insurance policies that are less than two years old except in limited circumstances, including the chronic or terminal illness of the insured. Life and annuities insurance agents are permitted to be licensed as viatical settlement brokers. This bill incorporates HB 2268.

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. The measure authorizes persons who are licensed by the State Corporation Commission as viatical settlement providers and viatical settlement brokers to negotiate, effectuate, and assume responsibility for viatical settlement contracts. 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. Unlike the existing act, this measure regulates viatical settlements regardless of whether the transaction involves a chronically or terminally ill person. Both the existing act and this measure (i) require licensure of viatical settlement brokers and providers, (ii) require the disclosure of certain information, (iii) provide a right of rescission, and (iv) authorize examination and oversight by the Commission. New provisions in this act adopt new definitions that recognize the securitization activities of viatical settlement brokers and providers, expand notice and disclosure requirements, and require brokers and providers to develop anti-fraud plans. Provisions of the act that differ from the NAIC model include (i) specifying that this act does not preempt the Virginia Securities Act and (ii) prohibiting the viatication of life insurance policies that are less than 2 years old except in limited circumstances, including the chronic or terminal illness of the insured.