191—48.4 (508E) Approval of viatical settlement contracts and disclosure statements.
	 48.4(1) A viatical settlement provider or viatical settlement broker shall not use a viatical settlement application, a viatical settlement contract or a viatical settlement disclosure statement form in this state unless it has been filed with and approved by the commissioner. The commissioner shall disapprove a viatical settlement form or disclosure statement if, in the commissioner’s opinion, the provisions contained therein are unreasonable, contrary to the interests of the public, or otherwise misleading or unfair to the viator. At the commissioner’s discretion, the commissioner may require the submission of advertising material.
	 48.4(2) The initial viatical settlement contracts and disclosure statements shall be filed for approval with the viatical settlement provider’s application for licensure, as required under subparagraph 48.3(1)“a”(9). A distinct form number shall be assigned to each viatical settlement form the provider will be using.
	 48.4(3) If a viatical settlement provider enters into a viatical settlement contract that allows the viator to retain an interest in the policy, the viatical settlement contract shall contain the following:
	  a.   	 A provision that the viatical settlement provider will effect the transfer of the amount of the death benefit only to the extent or portion of the amount viaticated and that benefits in excess of the amount viaticated shall be paid directly to the viator’s beneficiary by the insurance company;
	  b.   	 A provision that the viatical settlement provider will, upon acknowledgment of the perfection of the transfer, either:
	 (1) 	 Advise the insured, in writing, that the insurance company has confirmed the viator’s interest in the policy; or
	 (2) 	 Send to the insured a copy of the document(s) sent from the insurance company to the viatical settlement provider that acknowledges the viator’s interest in the policy; and
	  c.   	 A provision that apportions the premiums to be paid by the viatical settlement provider and the viator. It is permissible for the viatical settlement contract to specify that all premiums shall be paid by the viatical settlement provider. The viatical settlement contract also may require that the viator reimburse the viatical settlement provider only for the premiums attributable to the retained interest.
	 48.4(4) In order to ensure that viators receive a reasonable return for viaticating an insurance policy when life expectancy is less than 25 months, a viatical settlement provider shall pay to a viator a discounted amount of the face value of the policy which amount shall be calculated at least at the following rates:

Insured’s Life Expectancy	Minimum Percentage of
Face Value Less
Outstanding Loans
Received by Viator	
Less than 6 months	80%	
At least 6 but less than 12 months	70%	
At least 12 but less than 18 months	65%	
At least 18 but less than 25 months	60%	
25 months or more	Cash surrender value of policy	
The percentage may be reduced by 5% for viaticating a policy written by an insurer rated less than the highest four categories by A.M. Best, or a comparable rating by another rating agency.
For a viatical settlement in which the viator has a life expectancy of 25 months or more, a viatical settlement provider or broker shall not enter into a viatical settlement contract that provides a payment to the viator that is unreasonable or unjust. As listed above, such payment must at least be equal to the cash surrender value of the policy. In determining whether a payment is unreasonable or unjust, the commissioner may consider, among other factors, the life expectancy of the insured; the applicable rating of the insurance company that issued the subject policy by a rating service generally recognized by the insurance industry, regulators and consumer groups; and prevailing discount rates in the viatical and life settlement market in Iowa or, if insufficient data is available for Iowa, the prevailing rates nationally or in other states that maintain this data.
	 48.4(5) If a viatical settlement provider subsequently desires to change the viatical settlement contract documents or disclosure statements approved at the time of licensure, the provider shall submit the modified contract documents or disclosure statements to the commissioner for approval in triplicate, along with a postage-paid return envelope. The viatical settlement provider shall identify its name and address in the cover letter and also reference the form number of the modified viatical settlement contract document or disclosure statement. Black-lining the modifications made within the document(s) should expedite the form review and approval process.