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