Substitute House Bill No. 6802
Substitute House Bill No. 6802
PUBLIC ACT NO. 97-202
AN ACT CONCERNING VIATICAL SETTLEMENT MONITORING.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. (NEW) As used in sections 1 to 16,
inclusive, of this act:
(1) "Certificate" means any certificate of
group life insurance.
(2) "Commissioner" means the Insurance
Commissioner.
(3) "Financing entity" means any participant,
or any transferee of or successor to the interest
of a participant, in any financing transaction.
(4) "Financing transaction" means any
transaction in which financing is obtained for the
purchase, acquisition, transfer or other
assignment of one or more viatical settlement
contracts, viaticated policies or interests in
such contracts or policies, including, but not
limited to, any secured or unsecured financing,
any securitization transaction or any securities
offering which is registered or exempt from
registration under federal and applicable state
securities law, or in which one or more viatical
settlement contracts, viaticated policies or
interests therein are sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of.
(5) "Participant" means an underwriter,
placement agent, lender, purchaser of securities,
credit enhancer or other participant, other than a
viatical settlement provider, in any financing
transaction.
(6) "Person" means any natural or artificial
entity, including, but not limited to, any
individual, partnership, association, trust or
corporation.
(7) "Viatical settlement agent" means any
person who is an authorized agent of a licensed
viatical settlement provider, and any subagent or
other representative of such agent, who acts or
aids in any manner in the solicitation of a
viatical settlement on behalf of such viatical
settlement provider. Viatical settlement agent
shall not include (A) a viatical settlement
provider, viatical settlement broker or financing
entity, (B) an attorney, accountant, financial
planner or any person exercising a power of
attorney granted by a viator, (C) any person who
is retained to represent a viator and whose
compensation is paid by or at the discretion of
the viator regardless of whether the viatical
settlement is consummated or (D) a credit union,
employer or association which provides information
relating to viatical settlements to its members or
employees. A viatical settlement agent is deemed
to represent only the viatical settlement
provider.
(8) "Viatical settlement broker" means any
person who, for a fee, commission or other
valuable consideration, advertises or advises a
person on the availability of a viatical
settlement, introduces viators to viatical
settlement providers, and offers or attempts to
negotiate viatical settlements between a viator
and one or more viatical settlement providers.
Viatical settlement broker shall not include (A)
an attorney, accountant or financial planner
retained to represent a viator and whose
compensation is paid by or at the discretion of
the viator, (B) a viatical settlement provider,
viatical settlement agent or financing entity, or
(C) a credit union, employer or association which
provides information relating to viatical
settlements to its members or employees. A
viatical settlement broker is deemed to represent
only the viator's interests and shall owe a
fiduciary duty to the viator to act according to
the viator's instructions and in the viator's best
interests.
(9) "Viatical settlement contract" means a
written agreement entered into between a viatical
settlement provider and a viator which establishes
the terms and conditions of a viatical settlement.
(10) "Viatical settlement provider" means a
person who enters into one or more viatical
settlement contracts. Viatical settlement provider
shall not include: (A) Any bank, as defined in
section 36a-2 of the general statutes, credit
union as defined in said section, or other
licensed lending institution which takes an
assignment of a life insurance policy as
collateral for a loan; (B) the issuer of a life
insurance policy providing accelerated benefits
pursuant to section 38a-457 of the general
statutes; (C) a viator's adult family member,
including, but not limited to, a parent, child,
spouse, brother, sister, grandfather, grandmother,
uncle, aunt, cousin, mother-in-law, father-in-law,
brother-in-law, sister-in-law, son-in-law or
daughter-in-law who has not entered into a
viatical settlement contract during the period of
twelve months immediately preceding the date of
the viatical settlement contract in question; or
(D) any financing entity.
(11) "Viaticated policy" means any life
insurance policy or certificate which has been
acquired by a viatical settlement provider
pursuant to a viatical settlement contract.
(12) "Viator" means the owner of a life
insurance policy, or a holder of a certificate,
which policy or certificate insures the life of an
individual with a catastrophic or life-threatening
illness or condition and who enters or seeks to
enter into a viatical settlement contract. Viator
shall not include a viatical settlement provider,
viatical settlement agent, viatical settlement
broker or financing entity.
(13) "Viatical settlement" means a transaction
between a viator and a viatical settlement
provider in which the viatical settlement provider
pays compensation or other value in return for the
viator's assignment, transfer, sale, devise or
bequest to the viatical settlement provider of the
ownership of or the death benefit payable under a
life insurance policy or a certificate.
Sec. 2. (NEW) (a) Except as provided in
sections 1 to 16, inclusive, of this act, no
person may act as a viatical settlement provider
or viatical settlement broker until he is licensed
by the commissioner pursuant to this section,
except that any person who holds a resident or
nonresident insurance producer license pursuant to
chapter 702 of the general statutes, may act as a
viatical settlement broker, and shall be subject
to the provisions of sections 1 to 16, inclusive,
of this act as if such person is a licensed
viatical settlement broker.
(b) Any applicant for a license as a viatical
settlement provider or viatical settlement broker
shall submit written application to the
commissioner. Such applicants shall provide such
information as the commissioner requires. All
initial applications shall be accompanied by a
filing fee specified in section 38a-11 of the
general statutes, as amended by section 3 of this
act.
(c) Any license issued for a viatical
settlement provider or a viatical settlement
broker shall be in force only until the last day
of March in each year, but may be renewed by the
commissioner without formality other than proper
application. The fees for such licenses shall be
assessed annually as provided in section 38a-11 of
the general statutes, as amended by section 3 of
this act. If such broker or provider fails to
timely pay the renewal fee, such license shall be
automatically revoked if the license fee is not
received by the commissioner not later than the
fifth day after the commissioner sends by first
class mail a written notice of nonrenewal to the
principal office of the broker or provider,
provided such notice may only be mailed after said
last day of March.
(d) The commissioner may, at any time, require
the applicant to fully disclose the identity of
all of its stockholders, partners, key management
personnel, directors, officers and employees, and
the commissioner may deny any application for a
license if the commissioner determines that any
partner, key manager, director, officer, employee
or majority stockholder fails to meet any of the
criteria set forth in subsection (f) of this
section.
(e) A viatical settlement provider or viatical
settlement broker license issued to a corporation,
partnership, limited liability company or other
legal entity authorizes all of such legal entity's
stockholders, partners, key managers, directors,
officers and employees named in the application
for such license, and any supplements to the
application, to act on such entity's behalf as if
such individuals are licensed. Such authorization
shall terminate upon the expiration, suspension or
revocation of the viatical settlement provider
license or viatical settlement broker license.
(f) Upon the filing of an application and full
payment of the license fee, the commissioner shall
investigate the applicant and shall issue a
license if the commissioner determines that:
(1) The applicant has provided a detailed plan
of operation;
(2) the applicant is competent and
trustworthy, and intends to act in good faith
pursuant to the license;
(3) the applicant has a good business
reputation and adequate experience, training or
education to conduct viatical settlement business;
(4) if the applicant is a corporation,
partnership, limited liability company or other
legal entity, the applicant has provided a
certificate of good standing from its state of
domicile and, if such applicant is not domiciled
in this state, a certificate of good standing from
this state dated not more than fifteen days before
or after the date of filing of the application;
and
(5) neither the applicant, nor any partner,
key manager, director, officer or majority
stockholder of the applicant has been convicted of
a felony.
(g) The commissioner shall maintain a complete
listing of all viatical settlement providers and
viatical settlement brokers licensed in this state
which shall be available to the general public for
inspection.
Sec. 3. Subsection (a) of section 38a-11 of
the general statutes is repealed and the following
is substituted in lieu thereof:
(a) The commissioner shall demand and receive
the following fees: (1) For annual fee for each
license issued to a domestic insurance company,
one hundred dollars; (2) for receiving and filing
annual reports of domestic insurance companies,
twenty-five dollars; (3) for filing all documents
prerequisite to the issuance of a license to an
insurance company, one hundred seventy-five
dollars, except that the fee for such filings by
any health care center, as defined in section
38a-175, shall be one thousand one hundred
dollars; (4) for filing any additional paper
required by law, fifteen dollars; (5) for each
certificate of valuation, organization,
reciprocity or compliance, twenty dollars; (6) for
each certified copy of a license to a company,
twenty dollars; (7) for each certified copy of a
report or certificate of condition of a company to
be filed in any other state, twenty dollars; (8)
for amending a certificate of authority, one
hundred dollars; (9) for each license issued to a
rating organization, one hundred dollars. In
addition, insurance companies shall pay any fees
imposed under section 12-211; (10) a filing fee of
twenty-five dollars for each initial application
for a license made pursuant to section 38a-769;
(11) with respect to insurance agents
appointments: (A) A filing fee of twenty-five
dollars for each request for any agent
appointment; (B) a fee of forty dollars for each
appointment issued to an agent of a domestic
insurance company or for each appointment
continued; and (C) a fee of twenty dollars for
each appointment issued to an agent of any other
insurance company or for each appointment
continued, except that no fee shall be payable for
an appointment issued to an agent of an insurance
company domiciled in a state or foreign country
which does not require any fee for an appointment
issued to an agent of a Connecticut insurance
company; (12) with respect to insurance producers:
(A) An examination fee of seven dollars for each
examination taken, except when a testing service
is used, the testing service shall pay a fee of
seven dollars to the commissioner for each
examination taken by an applicant; (B) a fee of
forty dollars for each license issued; and (C) a
fee of forty dollars for each license renewed;
(13) with respect to public adjusters: (A) An
examination fee of seven dollars for each
examination taken, except when a testing service
is used, the testing service shall pay a fee of
seven dollars to the commissioner for each
examination taken by an applicant; and (B) a fee
of one hundred twenty-five dollars for each
license issued or renewed; (14) with respect to
casualty adjusters: (A) An examination fee of ten
dollars for each examination taken, except when a
testing service is used, the testing service shall
pay a fee of ten dollars to the commissioner for
each examination taken by an applicant; (B) a fee
of forty dollars for each license issued or
renewed; and (C) the expense of any examination
administered outside the state shall be the
responsibility of the entity making the request
and such entity shall pay to the commissioner one
hundred dollars for such examination and the
actual traveling expenses of the examination
administrator to administer such examination; (15)
with respect to motor vehicle physical damage
appraisers: (A) An examination fee of forty
dollars for each examination taken, except when a
testing service is used, the testing service shall
pay a fee of forty dollars to the commissioner for
each examination taken by an applicant; (B) a fee
of forty dollars for each license issued or
renewed; and (C) the expense of any examination
administered outside the state shall be the
responsibility of the entity making the request
and such entity shall pay to the commissioner one
hundred dollars for such examination and the
actual traveling expenses of the examination
administrator to administer such examination; (16)
with respect to certified insurance consultants:
(A) An examination fee of thirteen dollars for
each examination taken, except when a testing
service is used, the testing service shall pay a
fee of thirteen dollars to the commissioner for
each examination taken by an applicant; (B) a fee
of two hundred dollars for each license issued;
and (C) a fee of one hundred twenty-five dollars
for each license renewed; (17) with respect to
surplus lines brokers: (A) An examination fee of
ten dollars for each examination taken, except
when a testing service is used, the testing
service shall pay a fee of ten dollars to the
commissioner for each examination taken by an
applicant; and (B) a fee of five hundred dollars
for each license issued or renewed; (18) with
respect to fraternal agents, a fee of forty
dollars for each license issued or renewed; (19) a
fee of thirteen dollars for each license
certificate requested, whether or not a license
has been issued; (20) with respect to domestic and
foreign benefit societies shall pay: (A) For
service of process, twenty-five dollars for each
person or insurer to be served; (B) for filing a
certified copy of its charter or articles of
association, five dollars; (C) for filing the
annual report, ten dollars; and (D) for filing any
additional paper required by law, three dollars;
(21) with respect to foreign benefit societies:
(A) For each certificate of organization or
compliance, four dollars; (B) for each certified
copy of permit, two dollars; and (C) for each copy
of a report or certificate of condition of a
society to be filed in any other state, four
dollars; (22) with respect to reinsurance
intermediaries: A fee of five hundred dollars for
each license issued or renewed; (23) WITH RESPECT
TO VIATICAL SETTLEMENT PROVIDERS: (A) A FILING FEE
OF THIRTEEN DOLLARS FOR EACH INITIAL APPLICATION
FOR A LICENSE MADE PURSUANT TO SECTION 2 OF THIS
ACT; AND (B) A FEE OF TWENTY DOLLARS FOR EACH
LICENSE ISSUED OR RENEWED; (24) WITH RESPECT TO
VIATICAL SETTLEMENT BROKERS: (A) A FILING FEE OF
THIRTEEN DOLLARS FOR EACH INITIAL APPLICATION FOR
A LICENSE MADE PURSUANT TO SECTION 2 OF THIS ACT;
AND (B) A FEE OF TWENTY DOLLARS FOR EACH LICENSE
ISSUED OR RENEWED; and [(23)] (25) with respect to
each duplicate license issued a fee of twenty-five
dollars for each license issued.
Sec. 4. (NEW) (a) The commissioner may deny a
license application, or suspend, revoke or refuse
to renew the license of any viatical settlement
provider or viatical settlement broker if the
commissioner determines that:
(1) There was a material misrepresentation in
the license application or in other information
submitted to the commissioner;
(2) The licensee, or any partner, key manager,
director, officer or majority stockholder of the
licensee has been convicted of a felony, is
subject to a final administrative action to
suspend or revoke a license granted by the chief
insurance regulatory official of another state, or
is otherwise shown to be untrustworthy or
incompetent to act as a viatical settlement
provider or viatical settlement broker; or
(3) The licensee has wilfully violated any of
the provisions of sections 1 to 16, inclusive, of
this act.
(b) Before the commissioner denies a license
application, or suspends, revokes or refuses to
renew the license of a viatical settlement
provider or viatical settlement broker, the
commissioner shall hold a hearing in accordance
with the provisions of chapter 54 of the general
statutes. Hearings may be held by the commissioner
or by any person designated by the commissioner.
Whenever a person other than the commissioner acts
as the hearing officer, he shall submit to the
commissioner a memorandum of his findings and
recommendations upon which the commissioner may
base his decision.
(c) In addition to denying a license
application, or suspending, revoking or refusing
to renew a license, the commissioner may assess a
fine of up to one thousand dollars against a
viatical settlement provider for each wilful
violation by the viatical settlement provider of
any provision of sections 1 to 16, inclusive, of
this act, or regulations adopted pursuant to said
sections.
(d) In addition to denying a license
application, or suspending, revoking or refusing
to renew a license, the commissioner may assess a
fine of up to one thousand dollars against a
viatical settlement broker if:
(1) Such viatical settlement broker has
knowingly received a commission or other payment
or benefit from a viatical settlement provider who
is unlicensed in this state in connection with a
viatical settlement contract entered into with a
viator resident in this state;
(2) Such viatical settlement broker has
defrauded, misled or mistreated viators; or
(3) Such viatical settlement broker has
wilfully violated a provision of sections 1 to 16,
inclusive, of this act, or regulations adopted
pursuant to said sections.
Sec. 5. (NEW) No viatical settlement provider,
viatical settlement broker or viatical settlement
agent may use any form of viatical settlement
contract or disclosure statement in this state
when dealing with a viator unless such form has
been filed with and approved by the commissioner.
Any viatical settlement contract or disclosure
statement filed with the commissioner shall be
deemed approved by the commissioner unless, not
later than sixty days after filing, the
commissioner sends, by first class mail, a notice
of disapproval to the party that made the filing.
The commissioner may disapprove a viatical
settlement contract or disclosure statement, if he
finds any provision in said form is unreasonable,
fails to comply with the provisions of sections 1
to 16, inclusive, of this act, or is misleading to
viators or the public.
Sec. 6. (NEW) (a) Except as provided in
subsection (b) of this section, on or before the
last day of March of each year, each viatical
settlement provider shall file with the
commissioner an annual statement containing such
information as the commissioner may prescribe. The
commissioner shall adopt regulations, in
accordance with the provisions of chapter 54 of
the general statutes, to prescribe the contents of
such annual statements.
(b) Notwithstanding the provisions of
subsection (a) of this section, no licensee may
submit to the commissioner information which
identifies any viator except with the express
written permission of such viator or the viator's
estate or representative.
(c) Except as otherwise required or permitted
by law, no person, including, but not limited to,
any viatical settlement provider, viatical
settlement agent, viatical settlement broker,
insurance company, insurance producer, information
bureau, rating agency or company, or any other
person with actual knowledge of a viator's
identity, may disclose such identity to any other
person unless such disclosure: (1) Is necessary to
effect a viatical settlement between the viator
and a viatical settlement provider and the viator
has provided prior written consent to such
disclosure; (2) is provided in response to an
investigation by the commissioner or any other
governmental office or agency; or (3) is a term of
or condition to a financing transaction or to the
transfer by one viatical settlement provider to
another viatical settlement provider in a single
transaction of two or more viaticated policies.
(d) The commissioner shall not disclose the
names of or other data identifying viators unless
such disclosure is required by law.
Sec. 7. (NEW) (a) In response to a complaint
concerning a license or in connection with the
review of an application for a license pursuant to
section 2 of this act, the commissioner may
examine the business and affairs of any licensee
or applicant for a license.
(b) Licensees shall maintain records of each
viatical settlement and, subject to the provisions
of section 6 of this act, such records shall be
available, during reasonable business hours, to
the commissioner for inspection for the three year
period following the insured's death. Subject to
the provisions of said section, the commissioner
shall also have the authority to order any
licensee or applicant to produce any records,
books, files or other information reasonably
necessary to ascertain whether the licensee or
applicant is acting or has acted in violation of
any provision of sections 1 to 16, inclusive, of
this act or of any regulations adopted pursuant to
said sections. The licensee or applicant shall pay
all expenses incurred by the commissioner in
conducting any inspection or examination.
Sec. 8. (NEW) Each viatical settlement
provider and viatical settlement broker shall
disclose in writing the following information to
each viator prior to the date all parties execute
a viatical settlement contract:
(1) The possible alternatives to, or options
that may be exercised in conjunction with, the
viatical settlement contract, including, but not
limited to, accelerated death benefits offered by
the insurer of such viator's life insurance policy
or group life insurance policy to which the
viator's certificate relates;
(2) Some or all of the proceeds of the
viatical settlement may be free from federal
income tax or from state tax, and shall advise
parties to seek assistance from a professional tax
advisor;
(3) Receipt of the viatical settlement
proceeds may adversely affect the viator's
eligibility for Medicaid or other government
benefits, and advice should be obtained from the
appropriate governmental agencies or advisors;
(4) The viatical settlement provider may
assign or otherwise transfer its interests in the
viaticated policy to a third party;
(5) The viator may rescind the viatical
settlement contract within fifteen days after the
viator's receipt of the viatical settlement
proceeds; and
(6) The fact that the viatical settlement
proceeds may be subject to the claims of
creditors.
Sec. 9. (NEW) (a) Before entering into a
viatical settlement contract, a viatical
settlement provider shall obtain:
(1) If the viator is the individual whose life
is insured by the viator's life insurance policy
or certificate, a written statement from a
licensed physician that the viator is of sound
mind and under no undue influence to enter into
the viatical settlement contract;
(2) If the viator is not the individual whose
life is insured by the viator's life insurance
policy or certificate, a witnessed document
executed by the insured person in which the person
consents to the release of his medical records;
and
(3) A witnessed document executed by the
viator in which he (A) consents to the viatical
settlement contract; (B) acknowledges that the
person whose life is insured by the viator's life
insurance policy or certificate has a catastrophic
or life threatening illness; (C) represents that
the viator has a full and complete understanding
of the viatical settlement contract and that the
viator has a full and complete understanding of
the insurance coverage under the life insurance
policy or certificate; (D) consents to the release
of the viator's medical records if the viator is
the person whose life is insured; and (E)
acknowledges that the viator has entered into the
viatical settlement contract freely and
voluntarily.
(b) Each viatical settlement contract entered
into in this state or entered into with residents
of this state shall provide that the viator may
rescind the viatical settlement contract within
fifteen days from the viator's receipt of the
viatical settlement proceeds. Such rescission
shall be effective only if both notice of
rescission is delivered by the viator to the
viatical settlement provider and a full return of
funds to the viatical settlement provider is made
before the expiration of the applicable rescission
period.
(c) Immediately following execution of a
viatical settlement contract, the viator shall
deposit documents effecting the transfer of the
viator's life insurance policy or certificate, and
the viatical settlement provider shall pay the
viatical settlement proceeds into an escrow
account. The proceeds shall be held in an escrow
account in a bank, as defined in section 36a-2 of
the general statutes, pending acknowledgement by
the issuer of the policy of the transfer of
ownership of the insurance policy or certificate
to the viatical settlement provider.
(d) A viatical settlement contract shall be
null and void if the viatical settlement proceeds
payable pursuant to said contract are not received
by the viator or the viator's designee strictly in
accordance with the terms of the viatical
settlement contract and the provisions of sections
1 to 16, inclusive, of this act.
(e) No viatical settlement broker or viatical
settlement agent shall receive from a viatical
settlement provider a fee, commission or other
valuable consideration for services rendered to or
in connection with viators resident in this state
unless such viatical settlement provider is
licensed in this state.
(f) Viatical settlement proceeds received by a
viator from a licensed viatical settlement
provider pursuant to a viatical settlement
contract shall not be subject to state taxation
under title 12 of the general statutes.
(g) Following the consummation of a viatical
settlement, no person may initiate contact with
the insured under the viaticated policy for
purposes of determining the insured's health
status (1) more than one time during each
consecutive three month period following the date
the viatical settlement proceeds are released to
the viator if the insured has an estimated life
expectancy of more than one year from such date,
or (2) more than one time during each month
following such date if the insured has an
estimated life expectancy of one year or less. The
viatical settlement provider shall notify the
viator of said limitations on contacts with the
insured prior to the consummation of the viatical
settlement. The limitations set forth in this
subsection shall not apply to any contacts with an
insured under a viaticated policy for reasons
other than determining the insured's health
status.
(h) Nothing in sections 1 to 16, inclusive, of
this act, shall be construed to authorize the
commissioner to determine or authorize the amount
to be paid by a licensed viatical settlement
provider to a viator, viatical settlement broker
or viatical settlement agent pursuant to or in
connection with a viatical settlement contract.
(i) An insured shall have the right, where
permitted under the life insurance policy or
certificate, to assign, transfer, sell or bequest
the net death benefit payable under or ownership
of a life insurance policy or certificate for any
remaining portion of such coverage. An insured
shall also have the right, where permitted under
the life insurance policy or certificate, to
assign, transfer, sell or bequest the net death
benefit payable under or ownership of a life
insurance policy or certificate at any time such
coverage is on disability waiver of premium.
(j) Unless otherwise agreed to in writing by
the viator and the viatical settlement provider,
the amount payable to a viatical settlement
provider upon the insured's death shall be the
amount (1) which would have been payable to the
viatical settlement provider if the insured had
died on the first day following the date of the
viatical settlement contract, less (2) (A) any
double or additional indemnity amount, if any,
payable under the viaticated policy if the
insured's death is accidental and (B) all other
amounts required to be deducted from the death
benefit. Any other additional amounts shall remain
payable to the beneficiary last named by the
viator prior to entering into the viatical
settlement contract, or to such other beneficiary,
other than the viatical settlement provider, as
the viator may designate after entering into the
viatical settlement contract, or in the absence of
a designation, to the estate of the viator.
Sec. 10. (NEW) (a) No person who invests in a
viaticated policy, including, but not limited to,
a participant in a financing transaction, may
influence the treatment of the insured's illness.
(b) (1) No life insurance policy or
certificate issued or delivered in this state
which permits assignment may in any way restrict
the owner of the policy or holder of the
certificate from making an assignment of rights
under said contract or certificate as a gift
without consideration.
(2) Any provision in any life insurance policy
or certificate which places restrictions on
assignments described in subdivision (1) of this
subsection may be waived with written consent from
the administrator or insurer of such policy or
certificate.
(c) The assignee of an individual life
insurance policy or of rights under a certificate
shall have all rights at law or in equity held by
the assignor under such policy or certificate,
including, but not limited to, the right to: (1)
Convert the coverage evidenced by the certificate
to an individual policy; (2) receive timely notice
of such right to convert; (3) take such other
action as may be necessary under the policy or
certificate in order to preserve the value of the
assigned coverage; (4) receive information
concerning the coverage under the policy or
certificate; (5) receive notice of a lapse or
discontinuation of coverage; (6) exercise any
option relating to the assigned coverage during an
open enrolment period; and (7) all such other
rights and privileges vested in the assignor under
the terms of the policy or certificate.
(d) If a certificate is assigned pursuant to a
viatical settlement contract and the administrator
of the group life insurance policy to which the
certificate relates fails to give notice to the
viatical settlement provider that the insured is
no longer a covered person under the group life
insurance policy or of the right to convert the
certificate to an individual life insurance
policy, the period of time during which the
viatical settlement provider may apply for
conversion under the terms of the group life
insurance policy shall begin from the date such
notice is received by the viatical settlement
provider.
(e) If a certificate acquired pursuant to a
viatical settlement contract is converted to an
individual life insurance policy, where permitted
under the life insurance policy or certificate and
when the face amount does not exceed the original
group coverage, for the purposes of measuring the
period of incontestability or determining
application of the suicide exclusion, the date of
issue of the policy shall be the first day
coverage was provided under the group life
insurance policy to which the certificate related
and not the date of issue of the individual life
insurance policy issued following conversion,
provided the information relevant to the
determination of eligibility of conversion can be
contested.
Sec. 11. (NEW) (a) Each life insurance company
licensed in this state shall promptly respond to
reasonable requests for policy or certificate
information following the receipt of the following
documents by the insurer or its agent:
(1) An instruction executed by the viator
requiring the insurer to release specified
information regarding the policy or certificate to
a named viatical settlement provider, viatical
settlement agent or viatical settlement broker;
and
(2) A written request for such information
from the named viatical settlement provider,
viatical settlement agent or viatical settlement
broker.
(b) Requests for the following items are
deemed to be reasonable: (1) Ownership of and
death benefits payable under the viaticated
policy; (2) premium information on the viaticated
policy; (3) liens on and assignments and
additional benefits of the viaticated policy; (4)
waiver of premium of the viaticated policy; and
(5) ownership of and assignment provisions under
the viaticated policy. The commissioner may adopt
regulations in accordance with the provisions of
chapter 54 of the general statutes to identify
additional requests for information which shall
also be deemed reasonable.
(c) An insurer or third party administrator of
a group life insurance policy shall promptly issue
an individual conversion policy if the conversion
is being requested for the purpose of entering
into a viatical settlement contract.
(d) Nothing in this section shall be construed
to prohibit a policy owner or certificate holder,
pursuant to the provisions of the policy or
certificate, from assigning his rights or benefits
under the policy or certificate to a viatical
settlement provider or from converting such
coverage to an individual life insurance policy.
Sec. 12. (NEW) (a) Nothing in sections 1 to
16, inclusive, of this act, shall be construed to
require a financing entity to obtain a viatical
settlement provider license or viatical settlement
broker license pursuant to section 2 of this act.
(b) Nothing in sections 1 to 16, inclusive, of
this act, shall be construed to restrict any
person from receiving a fee, commission or other
valuable consideration for services rendered in
connection with any financing transaction.
(c) Nothing in sections 1 to 16, inclusive, of
this act, shall be construed to require notice to
the commissioner of, or restrict an insurance
company from investing or participating in or
purchasing any securities issued in, any financing
transaction.
Sec. 13. Section 38a-816 of the general
statutes is amended by adding subdivision (19) as
follows:
(NEW) (19) Any violation of sections 1 to 16,
inclusive, of this act.
Sec. 14. (NEW) No viatical settlement provider
may sell, assign, transfer or pledge a viaticated
policy except to a viatical settlement provider
licensed pursuant to section 2 of this act, or a
person not required to be licensed under sections
1 to 16, inclusive, of this act.
Sec. 15. (NEW) Any viatical settlement
provider or viatical settlement broker who is
acting in such capacity in this state as of the
effective date of this act may continue to operate
in such capacity pending approval or disapproval
of such provider's or broker's application for a
license pursuant to section 2 of this act,
provided such application is filed with the
commissioner not later than thirty days after the
effective date of this act.
Sec. 16. (NEW) The commissioner may adopt
regulations, in accordance with the provisions of
chapter 54 of the general statutes, to implement
the provisions of sections 1 to 16, inclusive, of
this act.
Sec. 17. Subsection (a) of section 38a-25 of
the general statutes is amended by adding
subdivision (11) as follows:
(11) Viatical settlement providers and
viatical settlement brokers licensed by the
commissioner.
Sec. 18. This act shall take effect January 1,
1998.
Approved June 24, 1997