191—50.111 (502) Risk disclosure. Viatical settlement investment contract issuers and registered agents of issuers must provide specific, written disclosures of risk to Iowa investors at the time of the initial offer to sell a viatical settlement investment contract. These disclosures must be preceded by the following caption, which must be in bold, 16-point typeface:
IMPORTANT RISK DISCLOSURE INFORMATION—READ BEFORE SIGNING ANY
VIATICAL SETTLEMENT INVESTMENT CONTRACT.
The disclosure must include, at a minimum, the following information:
	  1. 	 That the actual annual rate of return on any viatical settlement investment contract is dependent upon an accurate projection of the viator’s life expectancy and the actual date of the viator’s death and that an annual “guaranteed” rate of return is not possible;
	  2. 	 Whether, after purchasing the viatical settlement investment contract, the investor will be responsible for payment of premiums on the contract if the viator lives longer than projected and if the investor will be responsible for such premiums, the amount of the premium payment and any resulting negative effect on the investor’s return;
	  3. 	 Whether any premium payments on the contract have been escrowed and, if so, the date upon which the escrowed funds will be depleted, who is responsible for payment of premiums after depletion of the funds, and, if applicable, the amount of the premiums;
	  4. 	 Whether any premium payments on the contract have been waived, whether the investor will be responsible for payment of the premiums if the insurer who wrote the policy terminates the waiver after purchase, and, if applicable, the amount of the premiums;
	  5. 	 Whether the investor is responsible for payment of premiums on the contract if the viator returns to health and, if applicable, the amount of the premiums;
	  6. 	 Whether the investor is entitled to all or part of the investor’s investment under the contract if the viator’s underlying policy is later determined to be null and void;
	  7. 	 Whether the insurance policy is a group policy and, if so, the special risks associated with group policies including, but not limited to, whether the investor is responsible for payment of additional premiums if the policies are sold or converted;
	  8. 	 Whether the insurance policy is term insurance and, if so, the special risks associated with term insurance including, but not limited to, whether the investor is responsible for additional premium costs if the viator continues the term policy at the end of the current term;
	  9. 	 Whether the investor will be the beneficiary or owner of the insurance policy and, if the investor is the beneficiary, the special risks associated with beneficiary status;
	  10. 	 Whether the insurance policy is contestable and, if so, the special risks associated with contestability including, but not limited to, the risk that the investor will have no claim or only a partial claim to death benefits should the insurer cancel the policy within the contestability period;
	  11. 	 Who is making the projection of the viator’s life expectancy, the information upon which the projection is based, and the relationship of the projection maker to the issuer;
	  12. 	 Who is monitoring the viator’s condition, how often the monitoring is done, how the date of death is determined, and how and when this information will be transmitted to the investor;
	  13. 	 Whether the insurer who wrote the viator’s underlying policy has any additional rights which could negatively affect or extinguish the investor’s rights under the viatical settlement investment contract, what these rights are, and under what conditions these rights are activated;
	  14. 	 That a viatical settlement investment contract is not a liquid investment and that there is no established secondary market for resale of these products by the investor;
	  15. 	 That the investor will receive no returns (i.e., dividends and interest) until the viator dies; and
	  16. 	 That the investor may lose all benefits or receive substantially reduced benefits if the insurer goes out of business during the term of the viatical investment.
This rule is intended to implement Iowa Code sections 502.102, 502.201(9E) and 502.301.