                                 CODE OF VIRGINIA

GENERAL RULES (§ 38.2-6008)

A. A viatical settlement provider entering into a viatical settlement contract
shall:

   1. First obtain:
   				a. 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; and
   				b. A document in which the insured consents to the release of his medical
   records to a viatical settlement provider, viatical settlement broker, and the
   insurance company that issued the life insurance policy covering the life of
   the insured. The consent for the release of medical records shall only be
   obtained for the insurance company if the life insurance policy covering the
   insured was issued within 48 months of the date of the viator&#8217;s
   application for the viatical settlement contract.

   2. Within 20 days after a viator executes documents necessary to transfer any
   rights under an insurance policy or within 20 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 subdivision 3.

   3. The viatical settlement provider shall deliver a copy of the medical
   release required under subdivision 1 b of this subsection, a copy of the
   viator&#8217;s application for the viatical settlement contract, the notice
   required under subdivision 2, and a request for verification of coverage to
   the insurer that issued the life policy that is the subject of the viatical
   transaction. The verification form adopted by the NAIC shall be used unless
   standards for verification are developed by the Commission.

   4. The insurer shall respond to a request for verification of coverage
   submitted on an approved form by a viatical settlement provider not later than
   30 calendar days after the date the request is received. The insurer shall
   complete and issue the verification of coverage to the viatical settlement
   provider or, in its response, the insurer shall indicate whether, based on the
   medical evidence and documents provided, the insurer intends to pursue an
   investigation regarding possible fraud or the validity of the insurance
   contract.

   5. 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 he has a full and complete understanding of the benefits of the
   life insurance policy, acknowledges that he is entering into the viatical
   settlement contract freely and voluntarily and, for persons who are
   chronically or terminally ill, acknowledges that the insured has a terminal or
   chronic illness and that the terminal or chronic illness or condition was
   diagnosed after the life insurance policy was issued.

   6. If a viatical settlement broker performs any of these activities required
   of the viatical settlement provider, the provider is deemed to have fulfilled
   the requirements of this section.

B. All medical information solicited or obtained by any licensee shall be
subject to the applicable provisions of state law relating to privacy or
confidentiality of medical information.

C. All viatical settlement contracts entered into in this Commonwealth shall
provide the viator with an unconditional right to rescind the contract for at
least 15 calendar days from the receipt of the viatical settlement proceeds. If
the insured dies during the rescission 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.

D. 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 documents, or from
the date the viatical settlement provider receives the documents, if the viator
erroneously provides the documents directly to the provider, the provider shall
pay or transfer the proceeds of the viatical settlement 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 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. Upon the
escrow agent&#8217;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 settlement proceeds to the
viator.

E. Failure to tender consideration to the viator for the viatical settlement
contract within the time disclosed pursuant to subdivision A 6 of &#xA7;
38.2-6007 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.

F. Contacts 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 broker licensed in this Commonwealth 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 provider or 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 contacts with an insured for reasons other
than determining the insured&#8217;s health status. Viatical settlement
providers and viatical settlement brokers shall be responsible for the actions
of their authorized representatives.

HISTORY: 2003, c. 717.