                                 CODE OF VIRGINIA

DISCLOSURE (§ 38.2-6007)

A. Before asking a viator or insured to sign any document, a licensee under this
chapter shall provide the respective viator or insured, or both, with a copy of
the disclosure document described in this subsection. The viatical settlement
provider or viatical settlement broker shall provide the viator with an
additional copy of the disclosures, with the application, no later than the time
the application for the viatical settlement contract is signed by all parties.
The disclosures shall be provided in a separate document that is signed by the
viator and the viatical settlement provider or viatical settlement broker, and
shall provide the following information:

   1. There are possible alternatives to viatical settlement contracts including
   any accelerated death benefits or policy loans offered under the
   viator&#8217;s life insurance policy.

   2. Some or all of the proceeds of the viatical settlement may be taxable under
   federal income tax and state franchise and income taxes, and assistance should
   be sought from a professional tax advisor.

   3. Proceeds of the viatical settlement could be subject to the claims of
   creditors.

   4. Receipt of the proceeds of a viatical settlement may adversely affect the
   viator&#8217;s eligibility for Medicaid or other government benefits or
   entitlements, and advice should be obtained from the appropriate government
   agencies.

   5. The viator has the right to rescind a viatical settlement contract for 15
   calendar days after the receipt of the viatical settlement proceeds by the
   viator, as provided in subsection C of &#xA7; 38.2-6008. If the insured dies
   during the rescission period, the settlement contract shall be deemed to have
   been rescinded, subject to repayment of all viatical settlement proceeds and
   any premiums, loans, and loan interest to the viatical settlement provider or
   viatical settlement purchaser.

   6. Funds will be sent to the viator within three business days after the
   viatical settlement provider has received the insurer&#8217;s or group
   administrator&#8217;s acknowledgment that ownership of the policy or interest
   in the certificate has been transferred and the beneficiary has been
   designated.

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

   8. Disclosure to a viator shall include distribution of a brochure describing
   the process of viatical settlements. The NAIC&#8217;s form for the brochure
   shall be used unless one is developed by the Commission.

   9. The disclosure document shall contain the following language: &#8220;All
   medical, financial, or personal information solicited or obtained by a
   viatical settlement provider or viatical settlement broker about an insured,
   including the insured&#8217;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.&#8221;

   10. The insured may be contacted by either the viatical settlement provider or
   broker or its authorized representative for the purpose of determining the
   insured&#8217;s health status. This contact is limited to once every three
   months if the insured has a life expectancy of more than one year, and no more
   than once per month if the insured has a life expectancy of one year or less.

B. A viatical settlement provider shall provide the viator with at least the
following disclosures no later than the date the viatical settlement contract is
signed by all parties. The disclosures shall be conspicuously displayed in the
viatical settlement contract or in a separate document signed by the viator and
the viatical settlement provider or viatical settlement broker, and provide the
following information:

   1. The affiliation, if any, between the viatical settlement provider and the
   issuer of the insurance policy to be viaticated;

   2. The name, address, and telephone number of the viatical settlement
   provider;

   3. The dollar amount of the current death benefit payable to the viatical
   settlement provider under the policy or certificate. If known, the viatical
   settlement provider shall also disclose the availability of any additional
   guaranteed insurance benefits, the dollar amount of any accidental death and
   dismemberment benefits under the policy or certificate, and the viatical
   settlement provider&#8217;s interest in those benefits;

   4. State the name, business address, and telephone number of the independent
   third party escrow agent, and the fact that the viator or owner may inspect or
   receive copies of the relevant escrow or trust agreements or documents; and

   5. If an insurance policy to be viaticated has been issued as a joint policy
   or involves family riders or any coverage of a life other than the insured
   under the policy to be viaticated, the viator shall be informed of the
   possible loss of coverage on the other lives under the policy and shall be
   advised to consult with his insurance producer or the insurer issuing the
   policy for advice on the proposed viatical settlement.

C. If the provider transfers ownership or changes the beneficiary of the
insurance policy, the provider shall communicate the change in ownership or
beneficiary to the insured within 20 days after the change.

HISTORY: 1997, c. 814, § 38.2-5705; 2003, c. 717.