ADMINISTRATION OF THE GOVERNMENT (Chapters 1 through 182)
Disclosures by providers
Section 219. (a) A viatical settlement or loan provider, viatical settlement or loan broker, or viatical settlement or loan representative shall disclose in writing the following information to the viator or viatical loan borrower no later than the time of application:
(1) possible alternatives to viatical settlement or loan contracts for persons with catastrophic, life-threatening or chronic illnesses or conditions, including, but not limited to, any accelerated benefits offered under the viator’s or borrower’s life insurance policy;
(2) the fact that some or all of the proceeds of the viatical settlement may be taxable, and that assistance should be sought from a personal tax advisor;
(3) the fact that the viatical settlement or loan could be subject to the claims of creditors;
(4) the fact that receipt of a viatical settlement or loan may adversely affect the recipient’s eligibility for Medicaid or other government benefits or entitlements, and that advice should be obtained from the appropriate agencies;
(5) the viator’s or borrower’s right to rescind a viatical settlement or loan contract within 15 days of the receipt of the viatical settlement or loan proceeds by the viator or borrower, as provided in section 220;
(6) the procedure for contacts with the insured for the purpose of determining the health status of the insured after the viatical settlement or loan has occurred, and the fact that health monitoring contacts will be limited to once every three months for insureds with a life expectancy of more than one year and to no more than one per month for insureds with a life expectancy of one year or less;
(7) for viatical settlements, that the funds will be sent to the viator within two business days after the viatical settlement provider has received the insurer’s or group administrator’s acknowledgment that ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated pursuant to the viatical settlement contract. For viatical loans, that the funds will be available to be drawn on at the borrower’s request within two business days after the viatical loan provider has received the insurer’s or group administrator’s acknowledgment verifying that the absolute assignment and beneficiary of the policy or interest in the certificate have been changed pursuant to the viatical loan contract; and
(8) entering into a viatical settlement or loan contract may cause other rights or benefits, including, but not limited to, conversion rights and waiver of premium benefits which may exist under the policy or certificate, to be forfeited by the viator or viatical loan borrower, and assistance should be sought from a financial adviser.
(b) A viatical settlement provider or viatical loan provider shall disclose the following information to the viator or viatical loan borrower at least two business days prior to the date the viatical settlement or loan contract is signed by all parties:
(1) The affiliation, if any, between the viatical settlement or loan provider and the issuer of an insurance policy which is the subject of the viatical settlement or loan.
(2) If an insurance policy which may be the subject of the viatical settlement or loan 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 or viatical loan borrower must be informed of the possible loss of coverage on the other lives and be advised to consult with the company issuing the policy for advice.
(3) The dollar amount of the current death benefit payable under the policy or certificate. The viatical settlement or loan provider shall also disclose the availability of any additional guaranteed insurance benefits, and the viatical settlement or loan provider’s interest in those benefits.