HB 1379-4_ Filed 01/28/2008, 07:32 Ripley
Adopted 1/28/2008


Text Box


    PREVAILED      Roll Call No. _______
    FAILED        Ayes _______
    WITHDRAWN        Noes _______
    RULED OUT OF ORDER


[

HOUSE MOTION ____

]

MR. SPEAKER:

    I move that House Bill 1379 be amended to read as follows:

SOURCE: Page 7, line 38; (08)MO137905.7. -->     Page 7, line 38, delete "IC 27-18" and insert " IC 27-8-19.8".
    Page 8, delete lines 7 through 42, begin a new paragraph and insert:
SOURCE: IC 27-8-19.8-1.5; (08)MO137905.2. -->     "SECTION 2. IC 27-8-19.8-1.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 1.5. As used in this chapter, "business of viatical settlements" means any of the following activities related to a viatical settlement contract:
        (1) Offering to enter into a viatical settlement contract.
        (2) Solicitation.
        (3) Negotiation.
        (4) Procurance.
        (5) Effectuation.
        (6) Monitoring.
        (7) Tracking.

SOURCE: IC 27-8-19.8-2.2; (08)MO137905.3. -->     SECTION 3. IC 27-8-19.8-2.2 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 2.2. As used in this chapter, "financing entity" means an underwriter, placement agent, lender, purchaser of securities, viatical settlement purchaser, credit enhancer, or another entity that has a:
        (1) direct ownership interest in a viaticated policy;
        (2) principal function related to a viatical settlement contract of providing funds to:
            (A) effect the viatical settlement contract; or
            (B) purchase a viaticated policy; and
        (3) written agreement with at least one (1) viatical settlement provider to finance the acquisition of viatical settlement contracts.
The term does not include a nonaccredited investor or viatical settlement purchaser.

SOURCE: IC 27-8-19.8-2.3; (08)MO137905.4. -->     SECTION 4. IC 27-8-19.8-2.3 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 2.3. As used in this chapter, "financing transaction" means a transaction in which a viatical settlement provider obtains financing from a financing entity, including secured or unsecured financing, a securitization transaction, or a securities offering that is registered or exempt from registration under state and federal securities law.
SOURCE: IC 27-8-19.8-2.5; (08)MO137905.5. -->     SECTION 5. IC 27-8-19.8-2.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 2.5. As used in this chapter, "fraudulent viatical settlement act" includes the following:
        (1) Knowingly or with intent to defraud and for the purpose of depriving another of property or for pecuniary gain, engaging in or permitting one's employees or agents to engage in the following:
            (A) Presenting, causing to be presented, or preparing with knowledge or belief that it will be presented to or by a viatical settlement provider, viatical settlement broker, viatical settlement purchaser, financing entity, insurer, insurance producer, or another person, any false material information, or concealing material information, as part of, in support of, or concerning a fact material to at least one (1) of the following:
                (i) An application for the issuance of a viatical settlement contract or life insurance policy.
                (ii) The underwriting of a viatical settlement contract or life insurance policy.
                (iii) A claim for payment or benefit under a viatical settlement contract or life insurance policy.
                (iv) Premiums paid on a life insurance policy.
                (v) Payments and changes in ownership or beneficiary made in accordance with the terms of a viatical settlement contract or life insurance policy.
                (vi) The reinstatement or conversion of a life insurance policy.
                (vii) The solicitation, offer, effectuation, or sale of a viatical settlement contract or life insurance policy.
                (viii) The issuance of written evidence of a viatical settlement contract or life insurance policy.
                (ix) An application for, the existence of, or payments

related to a loan that is secured directly or indirectly by an interest in a life insurance policy.
            (B) Employing a device, scheme, or artifice to defraud in the business of viatical settlements.
            (C) Failing to disclose to an insurer that requests the disclosure that a prospective insured has undergone a life expectancy evaluation by a person other than the insurer or an authorized representative of the insurer in connection with the issuance of a life insurance policy.
            (D) In the solicitation, application, or issuance of a life insurance policy, employing a device, scheme, or artifice in violation of insurable interest law.
        (2) In the furtherance of a fraud or to prevent the detection of a fraud, knowingly or intentionally doing or permitting one's employees or agents to do any of the following:
            (A) Removing, concealing, altering, destroying, or sequestering from the commissioner the assets or records of a licensee or other person engaged in the business of viatical settlements.
            (B) Misrepresenting or concealing the financial condition of a licensee, financing entity, insurer, or other person.
            (C) Transacting the business of viatical settlements in violation of laws requiring a license, certificate of authority, or other legal authority for the transaction of the business of viatical settlements.
            (C) Filing with the commissioner or the chief insurance regulatory official of another jurisdiction a document containing false information or otherwise concealing information about a material fact from the commissioner.
            (D) Engaging in embezzlement, theft, misappropriation, or conversion of money, funds, premiums, credits, or other property of a viatical settlement provider, insurer, insured, viator, owner, or another person engaged in the business of viatical settlements or insurance.
            (E) Entering into, brokering or otherwise dealing in a viatical settlement contract, the subject of which is a life insurance policy that was obtained by knowingly:
                (i) presenting false information concerning a fact material to the life insurance policy; or
                (ii) concealing, for the purpose of misleading another person, information concerning a fact material to the life insurance policy;
            with the intent to defraud the life insurance policy's issuer.
            (F) Misrepresenting a life insurance policy's owner's residency to be another jurisdiction for the purpose of evading or avoiding regulation under this chapter.
        (3) Knowingly or intentionally engaging in any practice or

plan that involves stranger originated life insurance.
        (4) Attempting to commit, assisting, aiding, or abetting in the commission of, or conspiring to commit an act or omission described in this section.

SOURCE: IC 27-8-19.8-3; (08)MO137905.6. -->     SECTION 6. IC 27-8-19.8-3, AS AMENDED BY P.L.223-2005, SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 3. As used in this chapter, "insured" refers to an individual whose life is the subject of insurance under a life insurance policy. or contract.
SOURCE: IC 27-8-19.8-3.3; (08)MO137905.7. -->     SECTION 7. IC 27-8-19.8-3.3 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 3.3. As used in this chapter, "licensee" refers to a viatical settlement provider or a viatical settlement broker that is licensed under this chapter.
SOURCE: IC 27-8-19.8-3.4; (08)MO137905.8. -->     SECTION 8. IC 27-8-19.8-3.4 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 3.4. As used in this chapter, "life insurance policy" refers to an individual or group policy, certificate, or contract of life insurance.
SOURCE: IC 27-8-19.8-3.6; (08)MO137905.9. -->     SECTION 9. IC 27-8-19.8-3.6 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 3.6. As used in this chapter, "owner" means a person that:
        (1) owns an individual life insurance policy; or
        (2) is the certificate holder under a group life insurance policy.

SOURCE: IC 27-8-19.8-5; (08)MO137905.10. -->     SECTION 10. IC 27-8-19.8-5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 5. (a) As used in this chapter, "viatical settlement provider" means a person, other than a viator, that:
        (1) enters into a viatical settlement contract with a viator; or
        (2) obtains financing for the purchase, acquisition, transfer, or other assignment of one (1) or more viatical settlement contracts, viaticated policies, or interests therein, or otherwise sells, assigns, transfers, pledges, hypothecates, or disposes of one (1) or more viatical settlement contracts, viaticated policies, or interests therein.
    (b) The term does not include any of the following:
        (1) A bank, savings bank, savings association, credit union, or other licensed lending institution that takes an assignment of a life insurance policy as collateral for a loan.
        (2) The issuer of a life insurance policy that makes a policy loan, permits surrender of the policy, or pays other policy benefits, including accelerated benefits, in accordance with the terms of the life insurance policy.
SOURCE: IC 27-8-19.8-6; (08)MO137905.11. -->     SECTION 11. IC 27-8-19.8-6 IS AMENDED TO READ AS

FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 6. (a) As used in this chapter, "viatical settlement contract" means an a written agreement for that:
        (1) is entered into between a viatical settlement provider and an owner; and
        (2) establishes the terms under which
the purchase, sale, assignment, transfer, devise, or bequest of owner:
            (A) receives payment of compensation that is:
                (i) less than the expected death benefit of the owner's life insurance policy; and
                (ii) more than the cash surrender value or accelerated death benefit of the owner's life insurance policy at the time the application for the written agreement is made; and
            (B) sells, assigns, transfers, devises, or bequeaths the death benefit or
a portion of the death benefit or ownership of a the life insurance policy or contract in exchange for consideration that is less than the expected death benefit of the life insurance policy. or contract. the compensation described in clause (A).
     (b) The term includes the following:
        (1) A written agreement for a loan or other lending transaction that is secured primarily by a life insurance policy.
        (2) A premium finance loan made for a life insurance policy on or before the date of issuance of the life insurance policy in a situation in which:
            (A) the premium finance loan proceeds are not used solely to pay:
                (i) premiums for the life insurance policy; or
                (ii) costs or expenses incurred by the lender or borrower in connection with the premium finance loan;
            (B) the owner receives on the date of the premium finance loan a guarantee of the future viatical settlement value of the life insurance policy; or
            (C) the owner agrees on the date of the premium finance loan to sell the life insurance policy or any part of the life insurance policy's death benefit on any date after the date of issuance of the life insurance policy.
        (3) A transfer, for compensation or value, of ownership or beneficial interest in a trust or other entity that:
            (A) owns a life insurance policy; and
            (B) was formed or availed of for the principal purpose of acquiring at least one (1) life insurance policy.
    (c)
The term does not include the following:
        (1) A policy loan by an insurer under the terms of:
             (A) a life insurance policy including a loan secured by the cash

value of a or rider; or
            (B) accelerated death benefit provisions contained in a
life insurance policy or rider.
        (2) An agreement with A premium finance loan or another loan made by a bank savings bank, savings and loan association, credit union, or other licensed lending financial institution that takes an assignment of a life insurance policy as collateral for a loan. if:
            (A) a default on the loan; or
            (B) a transfer of the life insurance policy in connection with a default on the loan;
        does not occur in connection with an agreement or understanding with another person for the purpose of evading regulation under this chapter.

        (3) The provision of accelerated death benefits by an insurer to an insured under the provisions of a life insurance contract.
        (4) Agreements between an insurer and a reinsurer.
        (5) An agreement by a person who enters into not more than one (1) such agreement in any five (5) year period to purchase a life insurance policy or contract for the transfer of a life insurance policy for a value that is less than the expected death benefit.
         (3) A collateral assignment of a life insurance policy by the owner.
        (4) A loan that:
            (A) is made by a lender;
            (B) does not violate Indiana law related to insurance premium finance loans; and
            (C) is not described in subsection (a) or (b).
        (5) An agreement in which all parties to the agreement:
            (A) are closely related to the insured by blood or law;
            (B) have a lawful substantial economic interest in the continued life, health, and bodily safety of the insured; or
            (C) are trusts established primarily for the benefit of the trusts.
        (6) A designation, consent, or agreement by an insured who is an employee of an employer in connection with the purchase by:
            (A) the employer; or
            (B) a trust established by the employer;
        of life insurance under which the employee is an insured.
        (7) A bona fide business succession planning arrangement:
            (A) between:
                (i) at least two (2) shareholders in a corporation; or
                (ii) a corporation and at least one (1) of the corporation's shareholders or at least one (1) trust established by the corporation's shareholders;
            (B) between:


                (i) at least two (2) partners in a partnership; or
                (ii) a partnership and at least one (1) of the partnership's partners or at least one (1) trust established by the partnership's partners; or
            (C) between:
                (i) at least two (2) members in a limited liability company; or
                (ii) a limited liability company and at least one (1) of the limited liability company's members or at least one (1) trust established by the limited liability company's members.
        (8) An agreement entered into by:
            (A) a service recipient, or a trust established by a service recipient; and
            (B) a service provider, or a trust established by a service provider, who performs significant services for the service recipient's trade or business.
        (9) Another contract, transaction, or arrangement exempted from the definition of "viatical settlement contract" by the commissioner based on a determination that the contract, transaction, or arrangement is not intended to be regulated under this chapter.

SOURCE: IC 27-8-19.8-6.3; (08)MO137905.12. -->     SECTION 12. IC 27-8-19.8-6.3 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 6.3. As used in this chapter, "viatical settlement purchaser" means a person that provides consideration for:
        (1) a beneficial interest in a trust that is vested with; or
        (2) the assignment, transfer, or sale of;
an ownership or other interest in a viaticated policy.

SOURCE: IC 27-8-19.8-6.5; (08)MO137905.13. -->     SECTION 13. IC 27-8-19.8-6.5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 6.5. As used in this chapter, "viaticated policy" means a life insurance policy or certificate that has been acquired by a viatical settlement provider under a viatical settlement contract.
SOURCE: IC 27-8-19.8-7.4; (08)MO137905.14. -->     SECTION 14. IC 27-8-19.8-7.4 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 7.4. As used in this chapter, "premium finance loan" means a loan that is:
        (1) made primarily for the purpose of making premium payments on a life insurance policy; and
        (2) secured by an interest in the life insurance policy.

SOURCE: IC 27-8-19.8-7.6; (08)MO137905.15. -->     SECTION 15. IC 27-8-19.8-7.6 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 7.6. As used in this chapter, "related provider trust" means a trust that:
        (1) is established by a viatical settlement provider or a

financing entity for the sole purpose of holding the ownership or beneficial interest in viaticated policies in connection with a financing transaction; and
        (2) is evidenced by a written agreement between the trust and the viatical settlement provider described in subdivision (1) under which:
            (A) the viatical settlement provider is responsible for ensuring compliance with all statutory and regulatory requirements; and
            (B) the trust agrees to make all records and files related to viatical settlement transactions available to the commissioner as if the records and files were maintained directly by the viatical settlement provider.

SOURCE: IC 27-8-19.8-7.7; (08)MO137905.16. -->     SECTION 16. IC 27-8-19.8-7.7 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 7.7. As used in this chapter, "special purpose entity" means a corporation, partnership, trust, limited liability company, or another legal entity formed solely to provide direct or indirect access to institutional capital markets:
        (1) for a financing entity or viatical settlement provider; or
        (2) in connection with a transaction in which the securities in the corporation, partnership, trust, limited liability company, or other entity:
            (A) are acquired by a viator or by qualified institutional buyers (as defined under the federal Securities Act of 1933, as amended (17 CFR 144)); or
            (B) pay a fixed rate of return commensurate with established asset-backed institutional capital markets.

SOURCE: IC 27-8-19.8-7.8; (08)MO137905.17. -->     SECTION 17. IC 27-8-19.8-7.8 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1 2008]: Sec. 7.8. (a) As used in this chapter, "stranger originated life insurance" means a practice or plan to initiate a life insurance policy for the benefit of a third party investor who, at the time the life insurance policy is originated, has no insurable interest in the insured.
    (b) The term includes the following:
        (1) An arrangement under which, at the time of life insurance policy inception:
            (A) a life insurance policy is purchased with resources or guarantees from or through a person that is not legally permitted to initiate the life insurance policy; and
            (B) a written or verbal arrangement or agreement is made to transfer the ownership of the life insurance policy or policy benefits to a third party.
        (2) A trust that is:
            (A) created to give an appearance of the existence of an insurable interest; and
            (B) used to initiate a life insurance policy for an investor.
    (c) The term does not include an arrangement described in section 6(c) of this chapter.

SOURCE: IC 27-8-19.8-8; (08)MO137905.18. -->     SECTION 18. IC 27-8-19.8-8 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 8. As used in this chapter, "viator" refers to the owner of a life insurance policy or a certificate holder under a group policy that insures the life of an insured who enters or seeks to enter into a viatical settlement contract.
SOURCE: IC 27-8-19.8-9.2; (08)MO137905.19. -->     SECTION 19. IC 27-8-19.8-9.2, AS ADDED BY P.L.223-2005, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 9.2. An insurance producer that:
        (1) is licensed under IC 27-1-15.6; and
        (2) sells a life insurance policy or contract that, less than two (2) years after the insurance producer sells the life insurance policy, or contract, is the subject of a viatical settlement contract;
shall not accept a commission or other remuneration in connection with the viatical settlement contract.
SOURCE: IC 27-8-19.8-17; (08)MO137905.20. -->     SECTION 20. IC 27-8-19.8-17 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 17. (a) A viatical settlement provider shall, not later than March 1 of each year, file with the department an annual report containing information concerning the immediately preceding calendar year as prescribed in rules adopted by the department under IC 4-22-2.
(b)
The rules adopted by the department under subsection (a) shall set the date by which annual reports must be submitted.
    (b) This subsection applies to viatical settlement contracts involving a life insurance policy issued less than five (5) years before the viatical settlement contract is entered into. An annual report filed under subsection (a) must include at least the following:
        (1) The total number of viatical settlement contracts entered into by the viatical settlement provider.
        (2) The aggregate face amount of policies that were the subject of viatical settlement contracts.
        (3) The aggregate amount of proceeds of viatical settlement contracts.
        (4) Aggregate information described in subdivisions (1) through (3) for each policy issue year of life insurance policies that were the subject of viatical settlement contracts.
        (5) The names of the:
            (A) insurers that issued life insurance policies that were the subject of viatical settlement contracts; and
            (B) viatical settlement brokers that represented the viators in the viatical settlement contracts.
    (c) The information required under subsection (b) is limited only to transactions in which the insured is a resident of Indiana.
    (d) Individual transaction data regarding the business of viatical

settlements or data that could compromise the privacy of personal, financial, and health information of a viator or insured are confidential.
    (e) Except as otherwise allowed or required by law, a viatical settlement provider, viatical settlement broker, insurer, insurance producer, information bureau, rating agency or company, or any other person with actual knowledge of an insured's identity shall not disclose the identity of the insured or information from which there is a reasonable basis to believe could be used to identify the insured or the insured's financial or medical information to another person unless:
        (1) the disclosure is necessary to effect a viatical settlement between the viator and a viatical settlement provider, and the viator and insured have provided prior written consent to the disclosure;
        (2) the disclosure is necessary to effectuate the sale of a viatical settlement contract or an interest in a viatical settlement contract as an investment, the sale is conducted in accordance with state and federal securities law, and the viator and insured have provided prior written consent to the disclosure;
        (3) the information is provided in response to an investigation or examination by the commissioner or another governmental officer or agency;
        (4) the disclosure is required under a term of or condition to the transfer of a life insurance policy from one (1) viatical settlement provider to another viatical settlement provider and the receiving viatical settlement provider complies with the confidentiality requirements of this section;
        (5) the disclosure is necessary to allow the viatical settlement provider, viatical settlement broker, or an authorized representative of a viatical settlement provider or viatical settlement broker that:
            (A) does not have a financial interest in the viatical settlement contract other than as a viatical settlement provider, viatical settlement broker, financing entity, related provider trust, or special purpose entity; and
            (B) is required by the viatical settlement provider or viatical settlement broker to agree in writing to adhere to the privacy requirements of this chapter;
        to make contacts for the purpose of determining health status; or
        (6) the disclosure is required for the purchase of stop loss coverage or financial guaranty insurance.

    (c) (f) A viatical settlement provider shall maintain records of each viatical settlement at least five (5) years after the death of the insured.

SOURCE: IC 27-8-19.8-20.1; (08)MO137905.21. -->     SECTION 21. IC 27-8-19.8-20.1 IS ADDED TO THE INDIANA

CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 20.1. (a) A person shall not issue, solicit, market, or otherwise promote the purchase of a life insurance policy for the purpose of or with an emphasis on making the life insurance policy the subject of a viatical settlement contract.
    (b) A person shall not commit a fraudulent viatical settlement act.
    (c) A violation of this chapter is an unfair and deceptive act or practice in the business of insurance under IC 27-4-1-4.

SOURCE: IC 27-8-19.8-21; (08)MO137905.22. -->     SECTION 22. IC 27-8-19.8-21, AS AMENDED BY P.L.223-2005, SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 21. (a) A viatical settlement contract must establish the terms under which the viatical settlement provider will pay value, in return for the viator's assignment, bequest, devise, sale, or transfer of the death benefit, certificate, or ownership of the life insurance policy to the viatical settlement provider.
    (b) A viatical settlement contract must provide for the unconditional rescission of the contract by the viator for the longer of the following:
        (1) the period ending not more than fifteen (15) days after the receipt of the viatical settlement proceeds by the viator; or
        (2) the period ending not more than thirty (30) days after execution of the contract.
    (c) A viatical settlement contract is rescinded if the insured dies during the rescission period, subject to repayment to the viatical settlement provider of all proceeds and any premiums, loans, and loan interest that have been paid by the viatical settlement provider.
SOURCE: IC 27-8-19.8-23; (08)MO137905.23. -->     SECTION 23. IC 27-8-19.8-23, AS AMENDED BY P.L.223-2005, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 23. (a) A viatical settlement provider or viatical settlement broker shall, not later than the date of application, provide to a viator a brochure approved by the commissioner and describing the viatical settlement process. If a brochure describes only a viatical settlement contract in which the insured does not have a catastrophic or life threatening illness or condition, the brochure may use the term "life settlement" in place of the term "viatical settlement".
    (b) A viatical settlement provider or viatical settlement broker shall, in a separate document that is signed by the viator and the viatical settlement provider or viatical settlement broker, disclose the following information to the viator not later than the date of application:
        (1) Possible alternatives to viatical settlement contracts, including accelerated benefits or policy loans offered by the issuer of the life insurance policy.
        (2) Federal and state tax consequences that may result from entering into a viatical settlement contract, and that the viator should seek assistance from a professional tax advisor.
        (3) Possible:
            (A) adverse effect on eligibility for; or
            (B) interruption of assistance provided by;
        medical or public assistance programs as a consequence of entering into a viatical settlement contract, and that the viator should seek advice from the appropriate government agencies.
        (4) The viator's right to rescind a viatical settlement contract as provided in section 21 of this chapter.
        (5) The amount of any fees paid by a viatical settlement provider to a viatical settlement broker.
        (6) A statement that proceeds of the viatical settlement could be subject to claims of creditors.
        (7) A statement that:
            (A) entering into a viatical settlement contract may cause other rights or benefits under the life insurance policy, including conversion rights, waiver of premium benefits, family riders, or coverage of a life other than the insured, to be forfeited by the viator; and
            (B) the viator should seek advice from a financial advisor.
        (8) The procedure for contacts with the insured.
        (9) That the proceeds of the viatical settlement will be transferred to the viator as provided in section 24.2 of this chapter.
        (10) A statement containing the following language:
            "All medical, financial, or personal information solicited or obtained by a viatical settlement provider or viatical settlement broker about an insured, including the insured's identity or the identity of family members, a spouse, or a significant other may be disclosed as necessary to effect the viatical settlement between the viator and the viatical settlement provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share information every two years.".
        (11) That the insured may be contacted by the viatical settlement provider or viatical settlement broker to determine the health status of the insured in accordance with section 24.9 of this chapter.
    (c) The viatical settlement provider shall disclose the following information to the viator, conspicuously displayed in the viatical settlement contract or in a separate document signed by the viatical settlement provider and the viator, before a viatical settlement contract is signed:
        (1) Any affiliation between the viatical settlement provider and the insurer that issued the life insurance policy or certificate that is the subject of the viatical settlement contract.
        (2) The name, address, and telephone number of the viatical settlement provider.
        (3) If the life insurance policy or certificate that is the subject of the viatical settlement contract was issued as a joint policy or includes family riders or any coverage of an individual other than the insured:
            (A) the possible loss of coverage of the other individuals under the life insurance policy; or certificate; and
            (B) that the viator should consult with the viator's insurance producer or the insurer that issued the life insurance policy or certificate for advice concerning the proposed viatical settlement contract.
        (4) The:
            (A) dollar amount of the current death benefit payable to the viatical settlement provider; and
            (B) if known, the:
                (i) availability of any additional guaranteed insurance benefits;
                (ii) dollar amount of any accidental death and dismemberment benefits; and
                (iii) viatical settlement provider's interest in the benefits described in items (i) and (ii);
        under the life insurance policy. or certificate.
        (5) The:
            (A) name, business address, and telephone number of the trustee or escrow agent described in section 24.2 of this chapter; and
            (B) right of the viator or insured to inspect or receive copies of the relevant escrow or trust agreements or documents.
    (d) A viatical settlement broker shall disclose to the viator, conspicuously displayed in the viatical settlement contract or in a separate document signed by the viatical settlement broker and the viator before a viatical settlement contract is signed, the amount and method of calculation of the viatical settlement broker's compensation.
    (e) If a viatical settlement provider transfers ownership or changes the beneficiary of a viaticated policy, the viatical settlement provider shall, not more than twenty (20) days after the transfer or change occurs, inform the insured of the transfer or change.
SOURCE: IC 27-8-19.8-24.2; (08)MO137905.24. -->     SECTION 24. IC 27-8-19.8-24.2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 24.2. (a) Immediately upon a viatical settlement provider's receipt of a signed viatical settlement contract, the viatical settlement provider shall pay the proceeds of the viatical settlement to a trust or escrow account in a state or federally chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation. The account shall be managed by a trustee or escrow agent independent of the

parties to the contract.
    (b) Within two (2) business days after the viatical settlement provider's receipt of the insurer's or group administrator's acknowledgment that ownership of the life insurance policy or interest in the certificate has been transferred and the beneficiary has been designated according to the viatical settlement contract, the trustee or escrow agent shall transfer the proceeds to the viator.".
    Delete pages 9 through 58.
    (Reference is to HB 1379 as printed January 25, 2008.)

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Representative Ripley


MO137905/DI 97     2008