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Virginia Administrative Code
Title 14. Insurance
Agency 5. State Corporation Commission, Bureau of Insurance
Chapter 71. Rules Governing Viatical Settlement Providers and Viatical Settlement Brokers

14VAC5-71-35. Viatical settlement contracts and disclosure statements.

A. No viatical settlement contract, including attached riders, amendments or endorsements, and including any application used in connection with the viatical settlement contract, shall be used in this Commonwealth on or after July 1, 2003, unless the contract and the riders, amendments, endorsements and any applications have been filed with and approved by the commission.

B. Except as provided in subdivision C 1 of this section, no disclosure form shall be provided by a licensee under this chapter to a viator or proposed viator in this Commonwealth on or after July 1, 2003, unless the disclosure form has been filed with the commission by the viatical settlement provider and the viatical settlement provider has received notification of the approval of such form by the commission. The use of any disclosure form by a licensee under this chapter, except as provided in this section, shall be prohibited.

C. Before asking a viator or insured to sign any document, a licensee under this chapter shall provide the viator or the insured, or both, if the viator and the insured are different individuals, with a copy of the disclosure required by § 38.2-6007 A of the Code of Virginia.

1. A disclosure form containing wording identical to that in subdivision 2 of this subsection is deemed approved for use in Virginia in satisfaction of the § 38.2-6007 A requirements and need not be filed. In accordance with § 38.2-6007 A 8 of the Code of Virginia, disclosure to a viator shall also include distribution of a brochure describing the process of viatical settlements. The brochure entitled "Selling Your Life Insurance Policy," or its successor, developed and adopted by the NAIC shall be used unless one is developed by the commission. Unless and until a brochure is developed by the commission to satisfy the requirements of § 38.2-6007 A 8 of the Code of Virginia, the NAIC's form for the brochure is deemed approved for use in Virginia and need not be filed. Other disclosures, brochures and formats developed by the NAIC or any other source may not be used to satisfy the requirements of this section unless approved by the commission as containing substantially similar wording.

2. Whether a disclosure form contains "substantially similar" wording, as that term is used herein, shall be determined by the commission. Under no circumstances shall a disclosure form be considered to contain wording "substantially similar" unless the form addresses each and every element contained in the form contained herein.


Note: When and if the broker contacts a potential viator prior to determining which viatical settlement provider he or she may contract with, the broker may use a "deemed" form with the following more generic heading and caption:



*"You" or "Your" as used in this disclosure form, refers to the owner of the life insurance policy, which may or may not be the person who is insured under the policy.

Are you thinking about viaticating your life insurance policy? If you are, your decision could be a good one —or a mistake. You will not know for sure unless you carefully consider all of the options available to you and the consequences of viaticating your life insurance policy.

We are required to inform you of the following:

• Make sure you understand the facts. You should ask your insurance company to review all the possible alternatives that your life insurance policy may offer in lieu of a viatical settlement, including any accelerated death benefits or policy loans offered under your life insurance policy.

• Some or all of the proceeds of the viatical settlement may be taxable under federal income tax and state franchise and income tax laws. You should seek assistance from a professional tax advisor.

• The proceeds from a viatical settlement may be subject to the claims of creditors.

• Proceeds from a viatical settlement may adversely affect your eligibility for Medicaid or other medical assistance, government benefits, or entitlements. You should seek advice from the appropriate government agencies.

• You have the right to rescind your viatical settlement contract within 15 calendar days after you receive the viatical settlement proceeds (the rescission period).

• If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded subject to repayment of all viatical settlement proceeds, including any commissions, premiums, loans, and loan interest paid on behalf of the viator from proceeds due the viator to the viatical settlement provider or viatical settlement purchaser.

• Funds will be sent to you within three business days after your viatical settlement provider has received acknowledgement from your insurer or group administrator that ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated.

• Entering into a viatical settlement contract may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under your policy or certificate, to be forfeited. Assistance should be sought from a financial advisor.

Privacy Considerations

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.

If you are the insured, both the viatical settlement provider and the viatical settlement broker may contact you to determine your health status. This contact is limited, in the aggregate, to once every three months if your life expectancy is more than one year, and no more than once per month if your life expectancy is one year or less. There are no limitations on contacts for purposes other than to determine the insured's health status.

Your Viatical Settlement Broker

• A viatical settlement broker is a person who on behalf of another and for a fee, commission, or other valuable consideration introduces viators to viatical settlement providers, or offers or attempts to negotiate viatical settlement contracts between a viator and one or more viatical settlement providers.

• Your viatical settlement broker can represent multiple parties in this transaction. He can represent you, a viatical settlement provider, or another third party. He cannot represent your insurance company when he is discussing viatical settlements.

• If you want the viatical settlement broker to act exclusively for you, you and the viatical settlement broker should execute a separate written agreement in which the viatical settlement broker (i) discloses fully all his interests in the viatical settlement contract and his relationships with the viatical settlement provider, including the viatical settlement provider's affiliates and appointed or contracted agents, and (ii) agrees that compensation for his services as a viatical settlement broker shall be paid directly and only by you.

Review all options and issues before you decide. This way you can be sure you are making a decision that is in your best interest.


Signature of Applicant:


Signature of Licensed Viatical Broker Or Viatical Settlement Provider



Viatical Settlement Broker:______________________________________________

print name and address

Viatical Settlement Provider:_____________________________________________

print name and address

D. The disclosures required by § 38.2-6007 B of the Code of Virginia shall be made to the viator and insured by or on behalf of the viatical settlement provider no later than the date on which the viatical settlement contract is signed by all parties. All or part of the disclosures may be combined and made in conjunction with the disclosures described in subsection C of this section.

E. Viatical contracts and applications for viatical settlement, regardless of the form of transmission, shall contain the following or substantially similar statements:

1. "Any person who knowingly presents false information in an application for insurance or viatical settlement contract may be guilty of a crime and subject to prosecution."

2. "Viatical settlement transactions between a viatical settlement broker or viatical settlement provider and a resident of this Commonwealth who is a viator or insured are subject to regulation by the State Corporation Commission acting through the Bureau of Insurance pursuant to provisions comprising Chapter 60 (§ 38.2-6000 et seq.) of Title 38.2 of the Code of Virginia. Any person damaged by the acts of a person in violation of this chapter may bring a civil action in a court of competent jurisdiction against the person committing the violation."

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 20, Issue 5, eff. November 1, 2003.

Website addresses provided in the Virginia Administrative Code to documents incorporated by reference are for the reader's convenience only, may not necessarily be active or current, and should not be relied upon. To ensure the information incorporated by reference is accurate, the reader is encouraged to use the source document described in the regulation.

As a service to the public, the Virginia Administrative Code is provided online by the Virginia General Assembly. We are unable to answer legal questions or respond to requests for legal advice, including application of law to specific fact. To understand and protect your legal rights, you should consult an attorney.