Section 760 IAC 1-61-6 - Requirements for viatical settlement contractsAuthority: IC 27-8-19.8-10; IC 27-8-19.8-26
Affected: IC 27-8-19.8-21; IC 27-8-19.8-24.2
Sec. 6.
The following requirements apply to any viatical settlement contract that will be advertised, solicited, negotiated, or executed in Indiana:
(1) The form of contract or any amendment to it shall not be used until it is filed with and approved by the commissioner.(2) The contract shall require payment in a lump sum equal to the full amount of the proceeds to a trust or escrow account in a state or federally chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation. Payment into the escrow account shall be made immediately upon receipt of a signed viatical settlement contract. A trustee or escrow agent independent of the parties to the viatical settlement contract shall manage the account. The proceeds shall be paid to the viator by wire transfer to the account of the viator, by certified check, or by cashier's check, in accordance with the time periods set forth in IC 27-8-19.8-24.2(b).(3) The contract shall contain the following rescission provisions:(A) It shall allow unconditional rescission by the viator in accordance with time periods no less favorable than those set forth in IC 27-8-19.8-21(b)(2).(B) The rescission provision shall be prominently displayed on the first page of the contract and shall set forth the method for giving notice of rescission. If notice of rescission is given by mail, it shall be deemed to be given when deposited in the United States mail, first class postage prepaid.(C) It shall provide that if the insured dies during the period of time allowed for rescission, the contract will be automatically rescinded, subject to repayment of all proceeds to the viatical settlement provider.(4) If a viatical settlement provider enters into a viatical settlement contract that allows the viator to retain an interest in the policy that is being viaticated, the viatical settlement contract shall contain the following provisions: (A) A provision that the viatical settlement provider will effect the transfer of the amount of the death benefit only to the extent or portion of the amount viaticated. The insurance company shall pay benefits in excess of the amount viaticated directly to the viator's beneficiary.(B) A provision that the viatical settlement provider will, upon acknowledgment of the completion of the assignment or transfer of the life insurance policy by its issuing company, either:(i) advise the viator in writing that the insurance company has confirmed, in writing, the viator's nonviaticated interest in the policy; or(ii) send to the viator a copy of the document sent from the insurance company to the viatical settlement provider that acknowledges the viator's nonviaticated interest in the policy.(C) A provision that apportions the premiums to be paid by the viatical settlement provider and the viator. The viatical settlement contract may specify that all premiums shall be paid by the viatical settlement provider. The contract may also require that the viator reimburse the viatical settlement provider for the premiums attributable to the retained interest.(5) With respect to policies containing a provision for double or additional indemnity for accidental death, the contract shall provide that the additional payment 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 thereafter designate, or in the absence of a beneficiary, to the estate of the viator.Department of Insurance; 760 IAC 1-61-6; filed Oct 20, 1999, 10:23 a.m.: 23 IR 580; readopted filed Nov 7, 2005, 10:50 a.m.: 29 IR 896; readopted filed Nov 29, 2011, 9:14 a.m.: 20111228-IR-760110553RFAReadopted filed 11/6/2017, 1:06 p.m.: 20171206-IR-760170354RFAReadopted filed 11/13/2023, 10:12 a.m.: 20231213-IR-760230631RFA