AI-assisted research summary: This section bars entering a viatical settlement contract before a policy is applied for or issued (or during a rule-set waiting period) unless the viator certifies a qualifying exception. It also requires insurers to respond in writing within 30 calendar days to properly completed ownership/beneficiary change requests and limits what extra forms they can require.
It is a violation of this chapter for any person to enter into a viatical settlement contract at any time prior to the application or issuance of a policy that is the subject of viatical settlement contract or within a period of time established by rule, unless the viator certifies to the viatical settlement provider that one (1) or more of the following conditions have been met within the prescribed period: The policy was issued upon the viator's exercise of conversion rights arising out of a group or individual policy; provided, that the total of the time covered under the conversion policy plus the time covered under the prior policy is at least the prescribed period. The time covered under a group policy shall be calculated without regard to any change in insurance carriers; provided, that the coverage has been continuous and under the same group sponsorship; The viator submits independent evidence to the viatical settlement provider that one (1) or more of the following conditions have been met within the prescribed period: The viator or insured is terminally or chronically ill; The viator's spouse dies; The viator divorces the viator’s spouse; The viator retires from full-time employment; The viator becomes physically or mentally disabled and a physician determines that the disability prevents the viator from maintaining full-time employment; or A final order, judgment or decree is entered by a court of competent jurisdiction, on the application of a creditor of the viator, adjudicating the viator bankrupt or insolvent, or approving a petition seeking reorganization of the viator or appointing a receiver, trustee or liquidator to all or a substantial part of the viator's assets; or Such other exemptions as may be prescribed by rule. Copies of the independent evidence described in subdivision (a)(2) and documents required by § 56-50-110(a) shall be submitted to the insurer when the viatical settlement provider submits a request to the insurer for verification of coverage. The copies shall be accompanied by a letter of attestation from the viatical settlement provider that the copies are true and correct copies of the documents received by the viatical settlement provider. If the viatical settlement provider submits to the insurer a copy of the owner or insured's certification described in and the independent evidence required by subdivision (a)(2) when the provider submits a request to the insurer to effect the transfer of the policy or certificate to the viatical settlement provider, the copy shall be deemed to conclusively establish that the viatical settlement contract satisfies the requirements of this section and the insurer shall timely respond to the request. No insurer may, as a condition of responding to a request for verification of coverage or effecting the transfer of a policy pursuant to a viatical settlement contract, require that the viator, insured, viatical settlement provider or viatical settlement broker sign any forms, disclosures, consent or waiver form that has not been expressly approved by the commissioner for use in connection with viatical settlement contracts in this state. Upon receipt of a properly completed request for change of ownership or beneficiary of a policy, the insurer shall respond in writing within thirty (30) calendar days with written acknowledgement confirming that the change has been effected or specifying the reasons why the requested change cannot be processed. The insurer shall not unreasonably delay effecting change of ownership or beneficiary and shall not otherwise seek to interfere with any viatical settlement contract lawfully entered into in this state.