2016 Delaware Code
Title 18 - Insurance Code
CHAPTER 75. DELAWARE VIATICAL SETTLEMENTS ACT
§ 7502. Definitions.

As used in this chapter:

(1) "Financing entity" means an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a viatical settlement provider, credit enhancer or any person that may be a party to a viatical settlement contract and that has a direct ownership in a policy or certificate that is the subject of a viatical settlement contract but whose sole activity related to the transaction is providing funds to effect the viatical settlement and who has an agreement in writing with a licensed viatical settlement provider to act as a participant in a financing transaction.

(2) "Financing transaction" means a transaction in which a licensed viatical settlement provider or a financing entity obtains financing for viatical settlement contracts, viaticated policies or interests therein, including, without limitation, any secured or unsecured financing, any securitization transaction or any securities offering either registered or exempt from registration under federal and state securities law, or any direct purchase of interests in a policy or certificate, if the financing transaction complies with federal and state securities law.

(3) "Person" means a legal entity, including, but not limited to, an individual, partnership, limited liability company, association, trust, corporation or other legal entity.

(4)a. "Viatical settlement agent" means a person who is an authorized agent of a licensed viatical settlement provider who acts or aids in any manner in the solicitation of a viatical settlement. Viatical settlement agent shall not include:

1. An attorney, licensed CPA, financial planner or any person exercising a power of attorney granted by a viator; or

2. Any person who is retained to represent a viator and whose compensation is paid by or at the direction of the viator regardless of whether the viatical settlement is consummated.

b. A viatical settlement agent is deemed to represent only the viatical settlement provider.

(5) "Viatical settlement broker" means a person that on behalf of a viator and for a fee, commission or other valuable consideration offers or attempts to negotiate viatical settlements between a viator and 1 or more viatical settlement providers. Irrespective of the manner in which the viatical settlement broker is compensated, a viatical settlement broker is deemed to represent only the viator and owes a fiduciary duty to the viator to act according to the viator's instructions and in the best interest of the viator. The term does not include an attorney, licensed CPA or financial planner retained to represent the viator whose compensation is paid directly by or at the direction of the viator.

(6) "Viatical settlement contract" means a written agreement entered into between a viatical settlement provider and a viator. The agreement shall establish the terms under which the viatical settlement provider will pay compensation or anything of value, which compensation or value is less than the expected death benefit of the insurance policy or certificate, in return for the viator's assignment, transfer, sale, devise or bequest of the death benefit or ownership of all or a portion of the insurance policy or certificate of insurance to the viatical settlement provider. A viatical settlement contract also includes a contract for a loan or other financial transaction secured primarily by an individual or group life insurance policy, other than a loan by a life insurance company pursuant to the terms of the life insurance contract, or a loan secured by the cash value of a policy.

(7) "Viatical settlement provider" means a person, other than a viator, that enters into a viatical settlement contract. "Viatical settlement provider" also means a person that obtains financing from a financing entity for the purchase, acquisition, transfer or other assignment of 1 or more viatical settlement contracts, viaticated policies or interests therein, or otherwise sells, assigns, transfers, pledges, hypothecates or otherwise disposes of 1 or more viatical settlement contracts, viaticated policies or interests therein. Viatical settlement provider does not include:

a. A bank, savings bank, savings and loan association, credit union or other licensed lending institution that takes an assignment of a life insurance policy as collateral for a loan;

b. The issuer of a life insurance policy providing accelerated benefits and pursuant to the contract; or

c. A natural person who enters into no more than 1 agreement in a calendar year for the transfer of life insurance policies for any value less than the expected death benefit.

(8) "Viaticated policy" means a life insurance policy or certificate that has been acquired by a viatical settlement provider pursuant to a viatical settlement contract.

(9) "Viator" means the owner of a life insurance policy or a certificate holder under a group policy insuring the life of an individual with a catastrophic, life-threatening or chronic illness or condition who enters or seeks to enter into a viatical settlement contract.

72 Del. Laws, c. 132, § 1; 72 Del. Laws, c. 420, § 1.;