Section 760 IAC 1-61-9 - Standards for evaluation of reasonable paymentsAuthority: IC 27-8-19.8-25; IC 27-8-19.8-26
Affected: IC 27-8-19.8-25
Sec. 9.
(a) A viatical settlement provider shall not enter into a viatical settlement that provides a payment to the viator that is unreasonable or unjust. In determining whether a payment is unreasonable or unjust, the commissioner may consider relevant factors, including any of the following: (1) The life expectancy of the viator.(2) The applicable rating by a rating service generally recognized in the insurance industry, regulators, and consumer groups of the insurance company that issued the viaticated policy.(3) The prevailing discount rates in the viatical settlement market in this state, or, if insufficient data is available for Indiana, the prevailing rates nationally or in other states that maintain this data.(b) A viatical settlement provider shall prepare and maintain a pricing memorandum providing a description of the method and assumptions used in determining the value to be paid to viators. The memorandum shall include a description, which may use reasonable ranges, of the following:(1) The procedure used to determine the insured's life expectancy, including medical, evaluation, and use of health care professionals in such evaluation.(2) The portion of the discount (difference between the death benefit of the viaticated policy or certificate and the proceeds paid by the viatical settlement provider to the viator) due to market value interest rate (current value of money) and how this interest rate is determined.(3) The portion of the discount due to agent or broker compensation paid by the viatical settlement provider.(4) The portion of the discount that is the viatical settlement provider's operating costs in connection with viatical settlement contracts, including acquisition and maintenance cost and risk charge.(5) The portion of the discount due to other overhead costs and profit margin.(6) The effect, if any, that policy loans, surrender charges, and the net cash surrender value in the insurance plan have on the pricing determination.(7) How provision is made in the settlement determination for future insurance policy premiums, dividends, or excess amounts, if any.(8) What provisions, if any, are made in the settlement determination for supplemental insurance benefits or riders. Department of Insurance; 760 IAC 1-61-9; filed Oct 20, 1999, 10:23 a.m.: 23 IR 582; errata filed Dec 9, 1999, 1:05 p.m.: 23 IR 814; 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