83-7-215 - Disclosure requirements.
§ 83-7-215. Disclosure requirements.
(1) A viatical settlement provider, viatical settlement representative or viatical settlement broker shall disclose the following information to the viator no later than the time of application:
(a) That possible alternatives exist to viatical settlement contracts for individuals with catastrophic, life threatening or chronic illnesses including any accelerated death benefits offered under the viator's life insurance policy;
(b) That some or all of the proceeds of the viatical settlement may be free from federal income tax and from state franchise and income taxes, and that assistance should be sought from a professional tax advisor;
(c) That proceeds of the viatical settlement could be subject to the claims of creditors;
(d) That receipt of the proceeds of a viatical settlement may adversely effect the viator's eligibility for Medicaid or other government benefits or entitlements, and that advice should be obtained from the appropriate government agencies;
(e) That the viator has the right to rescind a viatical settlement contract fifteen (15) calendar days after the receipt of the viatical settlement proceeds by the viator, as provided in Section 83-7-217(3);
(f) That funds shall be sent to the viator within two (2) business days after the viatical settlement provider has received the insurer or group administrator's acknowledgment that ownership of the policy or interest in the certificate has been transferred and that the beneficiary has been designated pursuant to the viatical settlement contract; and
(g) That entering into a viatical settlement contract may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the policy or certificate, to be forfeited by the viator and that assistance should be sought from a financial adviser.
(2) A viatical settlement provider shall disclose the following information to the viator before the date the viatical settlement contract is signed by all parties:
(a) The affiliation, if any, that exist between the viatical settlement provider and the issuer of an insurance policy to be viaticated;
(b) If an insurance policy to be viaticated has been issued as a joint policy or involves family riders or any coverage of a life other than the insured under the policy to be viaticated, the viator shall be informed of the possible loss of coverage on the other lives and shall be advised to consult with his or her insurance producer or the company issuing the policy for advice on the proposed viatication; and
(c) The dollar amount of the current death benefit that is payable to the viatical settlement provider under the policy or certificate. The viatical settlement provider shall also disclose the availability of any additional guaranteed insurance benefits, the dollar amount of any accidental death and dismemberment benefits under the policy or certificate and the viatical settlement provider's interest in those benefits.
(3) A viatical settlement provider shall maintain at its home or principal office a copy of every printed, published or prepared advertisement or "invitation to inquire" including any electronic advertising it has used in this state for at least three (3) years. Providers shall also maintain all advertising for any affiliate, associated person, controlling person, broker or agent including independent contracts and escrow agents. Each advertisement or "invitation to inquire" shall contain a notation clearly stating the name of the individual authorizing the advertisement, the dates the advertisements were printed or published and the manner and extent of distribution of each advertisement. A file containing the information set forth in this section shall be available for inspection by the commissioner.
Sources: Laws, 2000, ch. 323, § 8, eff from and after July 1, 2000.