Text: HSB00580 Text: HSB00582 Text: HSB00500 - HSB00599 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. NEW SECTION. 508E.1 AUTHORITY OF THE
1 2 COMMISSIONER.
1 3 The commissioner shall regulate the sale of viatical
1 4 settlements as provided in this chapter.
1 5 Sec. 2. NEW SECTION. 508E.2 DEFINITIONS.
1 6 As used in this chapter, unless the context otherwise
1 7 requires:
1 8 1. "Chronically ill" means any of the following:
1 9 a. Being unable to perform or maintain at least two
1 10 activities of daily living, including but not limited to
1 11 eating, toileting, transferring, bathing, dressing, or
1 12 continence.
1 13 b. Requiring substantial supervision to protect the
1 14 individual from threats to health and safety due to severe
1 15 cognitive impairment.
1 16 c. Having a level of disability similar to that described
1 17 in paragraph "a" as determined by the United States secretary
1 18 of health and human services.
1 19 2. "Commissioner" means the commissioner of insurance.
1 20 3. "Terminally ill" means having an illness or sickness
1 21 that can reasonably be expected to result in death in twenty-
1 22 four months or less.
1 23 4. "Viatical settlement contract" means a written
1 24 agreement entered into between a viatical settlement provider
1 25 and a person who owns or is insured under a life insurance
1 26 policy or certificate, or who owns or is covered under a group
1 27 life insurance policy. "Viatical settlement contract" does
1 28 not mean a written agreement entered into between a viator and
1 29 a person having an insurable interest in the viator's life.
1 30 5. "Viator" means a person selling a life insurance policy
1 31 or certificate.
1 32 Sec. 3. NEW SECTION. 508E.3 VIATICAL SETTLEMENT CONTRACT
1 33 LIMITATIONS.
1 34 1. a. Subject to paragraph "b", a viatical settlement
1 35 contract shall not be entered into until after the contestable
2 1 period of the life insurance policy or certificate has
2 2 expired.
2 3 b. If a viatical settlement contract is entered into
2 4 during the contestable period of the life insurance policy or
2 5 certificate, a rebuttable presumption arises that it was the
2 6 intent of the person entering into such contract with a
2 7 viatical settlement provider to enter into such contract at
2 8 the time the life insurance policy or certificate was
2 9 originally purchased. If such person fails to rebut the
2 10 presumption, the viatical settlement contract is void.
2 11 2. A viatical settlement contract shall only be entered
2 12 into with an individual who is either terminally ill or
2 13 chronically ill.
2 14 Sec. 4. NEW SECTION. 508E.4 RULEMAKING AUTHORITY.
2 15 The commissioner shall adopt rules as necessary to
2 16 administer this chapter. Rules shall be adopted relating to
2 17 all of the following:
2 18 1. Advertising standards.
2 19 2. Disclosure.
2 20 3. Examinations.
2 21 4. Insurance company practices.
2 22 5. License requirements.
2 23 6. Prohibited practices.
2 24 7. Refund provisions.
2 25 8. Reporting.
2 26 9. Standards for reasonableness of payment.
2 27 10. Unfair trade practices.
2 28 11. Viatical settlement contracts.
2 29 EXPLANATION
2 30 This bill creates new Code chapter 508E and directs the
2 31 insurance commissioner to regulate the sale of viatical
2 32 settlement contracts. A viatical settlement involves the sale
2 33 to a viatical settlement provider of the death benefit under a
2 34 life insurance policy or certificate by a person who owns or
2 35 is insured under such a policy or certificate, or by a person
3 1 who owns or is covered under a group life insurance policy.
3 2 The bill provides generally that a viatical settlement
3 3 contract shall not be entered into until after the contestable
3 4 period of the policy has expired. However, if a viatical
3 5 settlement contract is entered into during the contestable
3 6 period of the life insurance policy or certificate, the bill
3 7 provides that a rebuttable presumption arises that it was the
3 8 intent of the person entering into such contract with a
3 9 viatical settlement provider to enter into such contract at
3 10 the time the life insurance policy or certificate was
3 11 originally purchased and if the person fails to rebut the
3 12 presumption, the viatical settlement contract is void. The
3 13 bill provides that a viatical settlement contract shall only
3 14 be entered into with an individual who is either terminally
3 15 ill or chronically ill.
3 16 The insurance commissioner is directed to adopt rules
3 17 necessary to administer the chapter, including rules relating
3 18 to advertising standards, disclosure, examinations, insurance
3 19 company practices, license requirements, prohibited practices,
3 20 refund provisions, reporting, standards for reasonableness of
3 21 payment, unfair trade practices, and viatical settlement
3 22 contracts.
3 23 LSB 5251DP 78
3 24 mj/gg/8.1
Text: HSB00580 Text: HSB00582 Text: HSB00500 - HSB00599 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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