SEC. 83-7-217. Informed consent; confidentiality of medical information; 15-day right to rescind; death of insured within 15-day period deemed rescission; transfer of proceeds of viatical settlement; post-settlement contacts with insured for purpose of determining health status.
(1) Before the viatical settlement provider enters into a viatical settlement contract, the provider shall obtain:
(a) If the viator is the insured, a written statement from a licensed attending physician that the viator is of sound mind;
(b) A witnessed document in which the viator consents to the viatical settlement contract, represents that the viator has a full and complete understanding of the viatical settlement contract, that he or she has a full and complete understanding of the benefits of the life insurance policy and acknowledges that he or she has entered into the viatical settlement contract freely and voluntarily; and
(c) A document in which the insured consents to the release of his or her medical records to a viatical settlement provider or viatical settlement broker.
(2) All medical information solicited or obtained by any licensee shall be subject to the applicable provision of state law relating to confidentiality of medical information.
(3) All viatical settlement contracts entered into in this state shall provide the viator with an unconditional right to rescind the contract for at least fifteen (15) calendar days from the receipt of the viatical settlement proceeds. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment to the viatical settlement provider of all viatical settlement proceeds.
(4) Immediately upon the viatical settlement provider's receipt of documents to effect the transfer of the insurance policy, the viatical settlement provider shall pay the proceeds of the viatical settlement to an escrow or trust account in a state or federally chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC). The account shall be managed by a trustee or escrow agent independent of the parties to the contract. The trustee or escrow agent shall transfer the proceeds to the viator immediately upon the viatical settlement provider's receipt of acknowledgment of the transfer of the insurance policy.(5) Failure to tender consideration to the viator for the viatical settlement contract within the time disclosed under Section 8 (1)(f) of this act renders the viatical settlement contract voidable by the viator for lack of consideration until the time consideration is tendered to and accepted by the viator.
(6) Contacts with the insured for the purpose of determining the health status of the insured by the viatical settlement provider, viatical settlement broker or viatical settlement representative after the viatical settlement has occurred shall be made only by the viatical settlement provider or broker licensed in this state and shall be limited to once every three (3) months for insureds with a life expectancy of more than one (1) year, and to no more than one (1) per month for insureds with a life expectancy of one (1) year or less. The viatical settlement representative or broker shall explain the procedure for these contacts at the time the viatical settlement contract is entered into and shall obtain a statement signed by the viator stating that the viator understands these procedures. 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.
SOURCES: Laws, 2000, ch. 323, § 9, SB3000, eff. July 1, 2000.