Title 3 . Commerce, Community, and Economic Development

Chapter 31 . Miscellaneous

Section 370. Approval of viatical settlement contracts and disclosure statements

3 AAC 31.370. Approval of viatical settlement contracts and disclosure statements

(a) A person may not use a viatical settlement contract or provide to a viator a disclosure form in this state unless the contract or form is filed with and approved by the director for compliance with this section.

(b) A viatical settlement contract or a disclosure form must be filed with the director not less than 30 days before the anticipated date of delivery of the viatical settlement contract or disclosure form.

(c) The director will not approve a viatical settlement contract or disclosure form if the director determines that the viatical settlement contract or disclosure form contains a statement or provision that is unreasonable, contrary to the interests of the public, misleading, unfair to the viator or insured, or in violation of 3 AAC 31.300 - 3 AAC 31.449.

(d) If a viatical settlement provider enters into a viatical settlement contract that allows the viator to retain an interest in the life insurance policy, the viatical settlement contract must contain the following:

(1) a statement that the viatical settlement provider will pay viatical settlement contract proceeds to the viator only to the extent or portion of the death benefit subject to the viatical settlement contract;

(2) a statement that the viator's remaining interest in the life insurance policy will be paid directly to the viator's beneficiary by the insurance company;

(3) a statement that the viatical settlement provider will, upon notification by the insurance company that an ownership interest in a life insurance policy has been transferred and a beneficiary has been designated,

(A) advise the insured, in writing, that the insurance company has confirmed the viator's interest in the policy and that ownership or an interest in the life insurance policy has been transferred; or

(B) send to the insured a copy of the communication that was sent from the insurance company to the viatical settlement provider acknowledging the viator's interest in the policy and that ownership or interest in the life insurance policy has been transferred;

(4) a provision that apportions the premiums to be paid by the viatical settlement provider and the viator; the viatical settlement contract may specify that all premiums must be paid by the viatical settlement provider and may require that the viator reimburse the viatical settlement provider for the premiums attributable to the amount of interest the viator retains in the life insurance policy;

(5) a statement in at least 10-point bold typeface substantially similar to the following statement: "Any person who knowingly presents false information in an application for insurance or for a viatical settlement contract is guilty of a crime and may be subject to penalty."

(e) An application for a viatical settlement contract described in (d) of this section must contain the statement described in (d)(5) of this section.

(f) A viatical settlement contract must provide the viator with an unconditional right to rescind the contract within 15 days after the date the viator received the viatical settlement contract proceeds. If the insured dies during the 15-day period, the viatical settlement contract must be rescinded as of the date of death, and the viator shall refund the viatical settlement contract proceeds to the viatical settlement provider within 10 working days after the date the viatical settlement contract was rescinded.

History: Eff. 8/25/2002, Register 163

Authority: AS 21.06.090

AS 21.89.110