House Amendment 8350
PAG LIN
1 1 Amend Senate File 2392, as amended, passed, and
1 2 reprinted by the Senate, as follows:
1 3 #1. Page 5, line 35, by striking the words <a
1 4 plan> and inserting the following: <an act>.
1 5 #2. Page 9, by striking lines 30 through 34.
1 6 #3. Page 15, line 2, by striking the figure
1 7 <508E.14> and inserting the following: <508E.15>.
1 8 #4. Page 16, line 14, by inserting after the word
1 9 <contract> the following: <form>.
1 10 #5. Page 17, line 22, by striking the figures and
1 11 words: <508E.13, and 508.14> and inserting the
1 12 following: <508E.14, and 508E.15>.
1 13 #6. Page 18, line 28, by striking the figure
1 14 <508E.14> and inserting the following: <508E.15>.
1 15 #7. Page 28, line 29, by striking the word <sixty>
1 16 and inserting the following: <thirty>.
1 17 #8. Page 28, line 31, by striking the word
1 18 <thirty> and inserting the following: <fifteen>.
1 19 #9. Page 30, by striking lines 10 through 12, and
1 20 inserting the following: <contracts shall be made
1 21 only by a duly licensed viatical settlement provider
1 22 or by the authorized>.
1 23 #10. Page 30, by striking lines 26 through 28.
1 24 #11. Page 35, by striking lines 26 and 27, and
1 25 inserting the following:
1 26 <A viatical settlement broker, or viatical>.
1 27 #12. Page 35, line 29, by striking the words
1 28 <plan, transaction,> and inserting the following:
1 29 <transaction>.
1 30 #13. Page 36, line 10, by striking the words
1 31 <broker, and> and inserting the following: <broker,
1 32 and, if the policy was issued less than two years from
1 33 the date of application for a viatical settlement
1 34 contract,>.
1 35 #14. Page 37, line 12, by striking the figure
1 36 <508E.16> and inserting the following: <508E.17>.
1 37 #15. Page 38, line 2, by striking the word <sixty>
1 38 and inserting the following: <thirty>.
1 39 #16. Page 38, line 4, by striking the word
1 40 <thirty> and inserting the following: <fifteen>.
1 41 #17. By striking page 40, line 12, through page
1 42 42, line 30, and inserting the following:
1 43 <Sec. . NEW SECTION. 508E.11 PROHIBITED
1 44 PRACTICES.
1 45 1. Except as provided in section 508E.12, it is a
1 46 violation of this chapter for any person to enter into
1 47 a viatical settlement contract at any time prior to
1 48 the application or issuance of a policy which is the
1 49 subject of a viatical settlement contract or within a
1 50 five=year period commencing with the date of issuance
2 1 of the insurance policy or certificate.
2 2 2. An insurer shall not, as a condition of
2 3 responding to a request for verification of coverage
2 4 or effecting the transfer of a policy pursuant to a
2 5 viatical settlement contract, require that the viator,
2 6 insured, viatical settlement provider, or viatical
2 7 settlement broker sign any form, disclosure, consent,
2 8 or waiver form that has not been expressly approved by
2 9 the commissioner for use in connection with viatical
2 10 settlement contracts in this state.
2 11 3. Upon receipt of a properly completed request
2 12 for change of ownership or beneficiary of a policy,
2 13 the insurer shall respond in writing within twenty
2 14 days, with written acknowledgment confirming that the
2 15 change has been effected or specifying the reasons why
2 16 the requested change cannot be processed. The insurer
2 17 shall not unreasonably delay effecting a change of
2 18 ownership or beneficiary and shall not otherwise seek
2 19 to interfere with any viatical settlement contract
2 20 lawfully entered into in this state.
2 21 Sec. . NEW SECTION. 508E.12 PERMITTED
2 22 PRACTICES.
2 23 1. Notwithstanding section 508E.11, at any time
2 24 subsequent to the issuance of the policy, a person may
2 25 enter into a viatical settlement contract if the
2 26 viator certifies to the viatical settlement provider
2 27 that one or more of the following conditions have been
2 28 met within the five=year period:
2 29 a. The policy was issued upon the viator's
2 30 exercise of conversion rights arising out of a group
2 31 or individual policy, provided the total of the time
2 32 covered under the conversion policy plus the time
2 33 covered under the prior policy is at least sixty
2 34 months. The time covered under a group policy shall
2 35 be calculated without regard to any change in
2 36 insurance carriers, provided the coverage has been
2 37 continuous and under the same group sponsorship.
2 38 b. The viator submits an affidavit to the viatical
2 39 settlement provider that one or more of the following
2 40 conditions exists:
2 41 (1) The viator or insured is terminally or
2 42 chronically ill.
2 43 (2) The viator's spouse or child dies.
2 44 (3) The viator divorces the viator's spouse.
2 45 (4) The viator retires from full=time employment.
2 46 (5) The viator becomes physically or mentally
2 47 disabled and a physician determines that the
2 48 disability prevents the viator from maintaining
2 49 full=time employment.
2 50 (6) A final order, judgment, or decree is entered
3 1 by a court of competent jurisdiction, on the
3 2 application of a creditor of the viator, adjudicating
3 3 the viator bankrupt or insolvent, or approving a
3 4 petition seeking reorganization of the viator or
3 5 appointing a receiver, trustee, or liquidator to all
3 6 or a substantial part of the viator's assets.
3 7 (7) Other circumstances as established as eligible
3 8 exemptions by the commissioner by rule, including but
3 9 not limited to substantial adverse financial
3 10 circumstances or other factors substantially affecting
3 11 the viator.
3 12 2. Notwithstanding section 508E.11, a person may
3 13 enter into a viatical settlement contract if at all
3 14 times prior to the date that is two years after policy
3 15 issuance, all of the following conditions are met with
3 16 respect to the policy:
3 17 a. Policy premiums have been funded exclusively
3 18 with any of the following:
3 19 (1) Unencumbered assets, including an interest in
3 20 the life insurance policy being financed only to the
3 21 extent of its net cash surrender value, provided by a
3 22 person described in section 508E.2, subsection 15,
3 23 paragraph "d".
3 24 (2) Fully recourse liability incurred by the
3 25 insured or a person described in section 508E.2,
3 26 subsection 15, paragraph "d".
3 27 b. There is no agreement or understanding with any
3 28 other person to guarantee any such liability or to
3 29 purchase, or stand ready to purchase, the policy,
3 30 including through an assumption or forgiveness of the
3 31 loan.
3 32 c. Neither the insured nor the policy has been
3 33 evaluated for settlement.
3 34 3. Copies of the affidavits described in this
3 35 section and documents required by section 508E.10,
3 36 subsection 1, shall be requested from and provided by
3 37 the insurer when the viatical settlement provider or
3 38 viatical settlement broker submits a request to the
3 39 insurer for verification of coverage. The copies
3 40 shall be accompanied by a letter of attestation from
3 41 the viatical settlement provider that the copies are
3 42 true and correct copies of the documents received by
3 43 the viatical settlement provider.
3 44 4. If the viatical settlement provider submits to
3 45 the insurer a copy of the owner's or insured's or
3 46 insurer's affidavit described in this section when the
3 47 provider submits a request to the insurer to effect
3 48 the transfer of the policy or certificate to the
3 49 viatical settlement provider, the copy shall be deemed
3 50 to conclusively establish that the viatical settlement
4 1 contract satisfies the requirement of this section and
4 2 the insurer shall timely respond to the request.>
4 3 #18. Page 42, line 31, by striking the figure
4 4 <508E.12> and inserting the following: <508E.13>.
4 5 #19. Page 43, line 4, by inserting after the word
4 6 <broker> the following: <unless such relationship is
4 7 disclosed to the viator>.
4 8 #20. Page 43, line 14, by inserting after the word
4 9 <contract> the following: <unless such relationship
4 10 is disclosed to the viator>.
4 11 #21. Page 44, line 2, by inserting before the word
4 12 <purpose> the following: <sole>.
4 13 #22. Page 44, line 3, by striking the word <an>
4 14 and inserting the following: <a primary>.
4 15 #23. Page 44, by striking lines 4 through 18 and
4 16 inserting the following:
4 17 < . A person providing premium financing shall
4 18 not receive any proceeds, fees, or other consideration
4 19 from the policy or owner of the policy that are in
4 20 addition to the amounts required to pay principal,
4 21 interest, and any costs or expenses incurred by the
4 22 lender or borrower in connection with the premium
4 23 finance agreement, except for the event of a default,
4 24 unless either the default on such loan or transfer of
4 25 the policy occurs pursuant to an agreement or
4 26 understanding with any other person for the purpose of
4 27 evading regulation under this chapter. Any payments,
4 28 charges, fees, or other amounts received by a person
4 29 providing premium financing in violation of this
4 30 subsection shall be>.
4 31 #24. Page 45, line 9, by striking the figure
4 32 <508E.13> and inserting the following: <508E.14>.
4 33 #25. Page 50, line 26, by striking the figure
4 34 <508E.14> and inserting the following: <508E.15>.
4 35 #26. Page 55, line 13, by striking the figure
4 36 <508E.15> and inserting the following: <508E.16>.
4 37 #27. Page 56, line 12, by striking the figure
4 38 <508E.16> and inserting the following: <508E.17>.
4 39 #28. Page 56, line 18, by striking the figure
4 40 <508E.17> and inserting the following: <508E.18>.
4 41 #29. Page 57, line 3, by striking the figure
4 42 <508E.18> and inserting the following: <508E.19>.
4 43 #30. By renumbering as necessary.
4 44
4 45
4 46
4 47 COMMITTEE ON COMMERCE
4 48 PETERSEN of Polk, CHAIRPERSON
4 49 SF 2392.505 82
4 50 da/rj/10677
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