Administrative Code

Creating a Report: Check the sections you'd like to appear in the report, then use the "Create Report" button at the bottom of the page to generate your report. Once the report is generated you'll then have the option to download it as a pdf, print or email the report.

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

14VAC5-71-90. General Rules.

A. With respect to policies containing a provision for double or additional indemnity for accidental death, the additional payment shall remain payable to the beneficiary last named by the viator prior to entering into the viatical settlement contract, or to such other beneficiary, other than the viatical settlement provider, as the viator may thereafter designate, or, in the absence of a designation, to the estate of the viator.

B. Payment of the proceeds of a viatical settlement pursuant to § 38.2-6008 D of the Code of Virginia shall be by means of wire transfer to the account designated by the viator or by certified check or cashier's check made payable to the viator or his designee.

C. Payment of the proceeds pursuant to a viatical settlement shall be made in a lump sum except where, in response to the request of the viator, the viatical settlement provider has purchased an annuity issued by an insurance company licensed in this Commonwealth for the purpose of payment of the proceeds, and the insurance company agrees to make all payments directly to the viator or the viator's beneficiary. No portion of the proceeds shall be retained by the viatical settlement provider, escrow agent, or other person without the written consent of the viator.

D. Contacts for the purpose of determining the health status of the insured after the viatical settlement has occurred shall be limited, in the aggregate, to once every three months for a person with a life expectancy of more than one year and to no more than one per month for a person with a life expectancy of one year or less. Such contacts shall be made only by a licensee under this chapter or its authorized representative. As used in this section, "authorized representative" means an individual who, for or on behalf of a licensee under this chapter, contacts an insured under a viatical policy after the viatical settlement has occurred. 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. If contact will be or is made by both the viatical settlement broker and the viatical settlement provider, both the viatical settlement broker and the viatical settlement provider shall have and maintain a system that tracks aggregate contacts.

E. If a viatical settlement provider enters into a viatical settlement that allows the viator to retain an interest in the policy, the viatical settlement contract shall contain the following provisions:

1. A provision that the viatical settlement provider will effect the transfer of the amount of the death benefit only to the extent or portion of the amount viaticated. Benefits in excess of the amount viaticated shall be paid directly to the viator's beneficiary by the insurance company;

2. A provision that the viatical settlement provider will, upon acknowledgment of the perfection of the transfer, either:

a. Advise the insured, in writing, that the insurance company has confirmed the viator's interest in the policy, or

b. Send the insured a copy of the instrument sent from the insurance company to the viatical settlement provider that acknowledges the viator's interest in the policy; and

3. A provision that apportions the premiums to be paid by the viatical settlement provider and the viator, provided that the contract provides premium payment terms and nonforfeiture options no less favorable, on a proportional basis, than those included in the policy.

F. In all cases where the insured is a minor child, disclosures to and permission of a parent or legal guardian satisfy the requirements of Chapter 60 (§ 38.2-6000 et seq.) of Title 38.2 of the Code of Virginia and the provisions of this chapter.

G. The requirements of this section supplement the general rules set forth in § 38.2-6008 of the Code of Virginia.

Statutory Authority

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

Historical Notes

Derived from Volume 14, Issue 02, eff. October 15, 1997; amended, Virginia Register Volume 19, Issue 01, eff. September 4, 2002; Volume 20, Issue 05, 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.