Section 220. (a) A viatical settlement or loan provider entering into a viatical settlement or loan contract with a viator or viatical loan borrower shall first obtain:
(1) if the viator or viatical loan borrower is the insured, a written statement from a licensed attending physician that the viator or borrower is of sound mind and under no constraint or undue influence to enter into the contract;
(2) a witnessed document in which the viator or viatical loan borrower consents to the viatical settlement or loan contract, acknowledges that the insured has a catastrophic, life-threatening or chronic illness or condition, represents that the viator or borrower has a full and complete understanding of the viatical settlement or loan contract, that the viator or borrower has a full and complete understanding of the benefits of the life insurance policy, and that the viator or borrower has entered the viatical settlement or loan contract freely and voluntarily; and
(3) a document in which the insured consents to the release of his or her medical records to a viatical settlement or loan provider or broker.
(b) All medical information solicited or obtained by any licensee or any financing entity shall be subject to the applicable provision of law relating to confidentiality of medical information. The insured shall be offered the choice of (1) requiring that the insured’s written, informed consent be obtained in each instance of disclosure of patient identifying information, or (2) signing a general consent document for the release of medical records and patient identifying information, which would remain in effect for any subsequent transactions involving the policy. If the insured elects the option in clause (2), the insured shall receive notice by first class mail of any further disclosure of patient identifying information. It is the responsibility of the party divulging the patient identifying information to notify the insured of the disclosure. “Patient identifying information” means an insured’s name, address, telephone number, facsimile number, electronic mail address, photograph or likeness, employer, employment status, social security number, or any other information which is likely to lead to the identification of the insured. Patient identifying information may be disclosed to purchasers of or investors in a policy after they have signed a contract or agreement to purchase a policy. Such purchasers or investors shall be bound by section 220.
(c) All viatical settlement and loan contracts entered into in the commonwealth shall provide the viator or viatical loan borrower with an unconditional right to rescind the contract for 15 days from the receipt of the viatical settlement or loan proceeds. If the insured dies during the rescission period, the viatical settlement or loan contract shall be deemed to have been rescinded, subject to repayment to the viatical settlement or loan provider of any viatical settlement or loan proceeds, if repaid within 90 days from the date of death of the insured.
(d) Immediately upon receipt from the viator or viatical loan borrower of documents to effect the transfer or assignment of the insurance policy, the viatical settlement or loan provider shall pay the proceeds of the settlement or loan to an escrow or trust account in a state or federally chartered financial institution, pending acknowledgment of the transfer or assignment by the issuer of the policy. Immediately upon receipt of confirmation by the viatical settlement provider or viatical loan provider that the insurer has acknowledged the transfer or assignment of the policy, the trustee or escrow agent shall be required to transfer to the viator or viatical loan borrower: (1) all of the proceeds due if to be made in a lump sum payment; or (2) the first installment if proceeds due are to be made in installment payments pursuant to the viatical settlement or loan contract.
(e) Failure to tender consideration to the viator or viatical loan borrower for the viatical settlement or loan contract by the date disclosed pursuant to paragraph (7) of subsection (a) of section 219 renders the viatical settlement or loan contract voidable by the viator or borrower for lack of consideration until such time as consideration is tendered to and accepted by the viator or borrower.
(f) Contacts for the purpose of determining the health status of the insured by the viatical settlement or loan provider or viatical settlement or loan broker after the viatical settlement or loan has occurred shall 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. 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.
(g) Viatical settlement or loan providers, viatical settlement or loan brokers, and viatical settlement or loan representatives are prohibited from paying any commission or finder’s fee to any person that is providing or has previously provided care or services to the insured under an insurance policy which is to be viaticated, including, but not limited to, any medical or mental health provider, social services provider, attorney, accountant, financial adviser or planner, investment adviser or planner, or any other person who has a demonstrable conflict of interest in collecting a finder’s fee.