2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 508E - VIATICAL SETTLEMENT CONTRACTS
508E.10 - GENERAL RULES.

        508E.10  GENERAL RULES.
         1. a.  A viatical settlement provider entering into a viatical
      settlement contract shall first obtain all of the following:
         (1)  If the viator is the insured, a written statement from a
      licensed attending physician that the viator is of sound mind and
      under no constraint or undue influence to enter into a viatical
      settlement contract.
         (2)  A document in which the insured consents to the release of
      the insured's medical records to a licensed viatical settlement
      provider, viatical settlement broker, and, if the policy was issued
      less than two years from the date of application for a viatical
      settlement contract, the insurance company that issued the life
      insurance policy covering the life of the insured.
         b.  Within twenty days after a viator executes documents
      necessary to transfer any rights under an insurance policy or within
      twenty days of entering any agreement, option, promise, or any other
      form of understanding, expressed or implied, to viaticate the policy,
      the viatical settlement provider shall give written notice to the
      insurer that issued that insurance policy that the policy has or will
      become a viaticated policy.  The notice shall be accompanied by the
      documents required by paragraph "c".
         c.  The viatical provider shall deliver a copy of the medical
      release required under paragraph "a", subparagraph (2), a copy of
      the viator's application for the viatical settlement contract, the
      notice required under paragraph "b", and a request for
      verification of coverage to the insurer that issued the life policy
      that is the subject of the viatical transaction.  The national
      association of insurance commissioners form for verification of
      coverage shall be used unless another form is developed and approved
      by the commissioner.
         d.  The insurer shall respond to a request for verification of
      coverage submitted on an approved form by a viatical settlement
      provider or viatical settlement broker within thirty days of the date
      the request is received and shall indicate whether, based on the
      medical evidence and documents provided, the insurer intends to
      pursue an investigation at this time regarding the validity of the
      insurance contract or possible fraud.  The insurer shall accept a
      request for verification of coverage made on a national association
      of insurance commissioners form or any other form developed and
      approved by the commissioner.  The insurer shall accept an original,
      facsimile, or electronic copy of such request and any accompanying
      authorization signed by the viator.  A failure by the insurer to meet
      its obligations under this subsection shall be a violation of
      sections 508E.11 and 508E.17.
         e.  Prior to or at the time of execution of the viatical
      settlement contract, the viatical settlement provider shall obtain 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 the
      viator has a full and complete understanding of the benefits of the
      life insurance policy, acknowledges that the viator is entering into
      the viatical settlement contract freely and voluntarily, and, for
      persons with a terminal or chronic illness or condition, acknowledges
      that the insured has a terminal or chronic illness or condition and
      that the terminal or chronic illness or condition was diagnosed after
      the life insurance policy was issued.
         f.  If a viatical settlement broker performs any of these
      activities required of the viatical settlement provider, the viatical
      settlement provider is deemed to have fulfilled the requirements of
      this section.
         2.  All medical information solicited or obtained by any licensee
      shall be subject to the applicable provisions of state law relating
      to confidentiality of medical information, including section 505.8.
         3.  All viatical settlement contracts entered into in this state
      shall provide the viator with an absolute right to rescind the
      contract before the earlier of thirty days after the date upon which
      the viatical settlement contract is executed by all parties or
      fifteen days after the viatical settlement proceeds have been sent to
      the viator as provided in subsection 4.  Recision by the viator may
      be conditioned upon the viator both giving notice and repaying to the
      viatical settlement provider within the recision period all viatical
      settlement proceeds, and any premiums, loans, and loan interest paid
      by or on behalf of the viatical settlement provider in connection
      with or as a consequence of the viatical settlement.  If the insured
      dies during the recision period, the viatical settlement contract
      shall be deemed to have been rescinded, subject to repayment to the
      viatical settlement provider or purchaser of all viatical settlement
      proceeds, and any premiums, loans, and loan interest that have been
      paid by the viatical settlement provider or purchaser, which shall be
      paid within sixty days of the death of the insured.  In the event of
      any recision, if the viatical settlement provider has paid
      commissions or other compensation to a viatical settlement broker in
      connection with the rescinded transaction, the viatical settlement
      broker shall refund all such commissions and compensation to the
      viatical settlement provider within five business days following
      receipt of written demand from the viatical settlement provider,
      which demand shall be accompanied by either the viator's notice of
      recision if rescinded at the election of the viator, or a notice of
      the death of the insured if rescinded by reason of the death of the
      insured within the applicable recision period.
         4.  The viatical settlement provider shall instruct the viator to
      send the executed documents required to effect the change in
      ownership, assignment, or change in beneficiary directly to the
      independent escrow agent.  Within three business days after the date
      the escrow agent receives the document, or from the date the viatical
      settlement provider receives the documents, if the viator erroneously
      provides the documents directly to the viatical settlement provider,
      the viatical settlement provider shall pay or transfer the viatical
      settlement proceeds into an escrow or trust account maintained in a
      state or federally chartered financial institution whose deposits are
      insured by the federal deposit insurance corporation.  Upon payment
      of the viatical settlement proceeds into the escrow account, the
      escrow agent shall deliver the original change in ownership,
      assignment, or change in beneficiary forms to the viatical settlement
      provider or related provider trust, or other designated
      representative of the viatical settlement provider.  Upon the escrow
      agent's receipt of the acknowledgment of the properly completed
      transfer of ownership, assignment, or designation of beneficiary from
      the insurance company, the escrow agent shall pay the viatical
      settlement proceeds to the viator.
         5.  A failure to tender consideration to the viator for the
      viatical settlement contract within the time set forth in the
      disclosure pursuant to section 508E.8, subsection 1, paragraph
      "g", 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.  Funds shall be deemed sent
      by a viatical settlement provider to a viator as of the date that the
      escrow agent either releases funds for wire transfer to the viator or
      places a check for delivery to the viator via the United States
      postal service or other nationally recognized delivery service.
         6.  A contact with the insured for the purpose of determining the
      health status of the insured by the viatical settlement provider or
      viatical settlement broker after the viatical settlement has occurred
      shall only be made by the viatical settlement provider or viatical
      settlement broker licensed pursuant to section 508E.3 or its
      authorized representatives and shall be limited to once every three
      months for insureds with a life expectancy of more than one year, and
      to no more than once per month for insureds with a life expectancy of
      one year or less.  The viatical settlement provider or viatical
      settlement broker shall explain the procedure for these contacts at
      the time the viatical settlement contract is entered into.  The
      limitations set forth in this subsection shall not apply to any
      contact with an insured for reasons other than determining the
      insured's health status.  A viatical settlement provider and a
      viatical settlement broker shall be responsible for the actions of
      their authorized representatives.  

         2008 Acts, ch 1155, §10
         Referred to in § 508E.5, 508E.8, 508E.12