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2009 SESSION

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HB 1864 Viatical Settlements Act; incorporates regulating issuance of stranger-originated life insurance.

Introduced by: William R. Janis | all patrons    ...    notes | add to my profiles

SUMMARY AS INTRODUCED:

Viatical settlements; stranger-originated life insurance.  Revises Virginia's Viatical Settlements Act to incorporate provisions regulating the issuance of stranger-originated life insurance (STOLI) policies, which arise when an individual is provided a financial incentive to purchase a life insurance policy on himself with the intention of selling the policy at a later date to a third party investor who has no insurable interest in the insured.  The measure provides for regulation by the Bureau of Insurance of activities of viatical settlement investment agents who sell such policies to investors.  Entering in to any practice or plan that involves a STOLI policy is declared to be a fraudulent viatical settlement act that is prohibited under the Act.  Other provisions restrict settlement for five years on policies financed with the intent to settle or having other elements indicating it is a STOLI transaction; however, an insured may enter into such a contract within the five-year period if he certifies that he entered into the viatical settlement contract more than two years after the policy was issued and the purchase of the policy was not financed by a third party.


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