Viatical Settlements Model Act

What this document is

Viatical Settlements Model Act is a naic model law published by National Association of Insurance Commissioners (NAIC). It is one of the documents that insurance license exam questions are written from, including life & health practice questions. This page summarizes it and points to the official version, which is the text to rely on.

Sections cited in practice questions

Each practice answer shows the exact passage it comes from. These are sections of this document that questions cite, with a short excerpt from the source text.

• NAIC Model #697: Section 2 (Definitions)

  “the owner of a life insurance policy or a certificate holder under a group policy who resides in this state and enters or seeks to enter into a viatical settlement contract.”

• NAIC Model #697: Section 12 (Prohibited Practices and Conflicts of Interest)

  “In no event shall any marketing materials expressly reference that the insurance is “free” for any period of time. The inclusion of any reference in the marketing materials that would cause a viator to reasonably believe that the insurance is free for any period of time shall be considered a violation of this Act.”

• NAIC Model #697: Section 10 (General Rules)

  “If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment to the viatical settlement provider or purchaser of all viatical settlement proceeds, and any premiums, loans and loan interest that have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...”

• NAIC Model #697: Section 8 (Disclosure to Viator)

  “Receipt of the proceeds of a viatical settlement may adversely affect the viator’s eligibility for Medicaid or other government benefits or entitlements, and advice should be obtained from the appropriate government agencies.”

• NAIC Model NAIC 697: Section 10C (General Rules)

  “All viatical settlement contracts entered into in this state shall provide the viator with an absolute right to rescind the contract before the earlier of sixty (60) calendar days after the date upon which the viatical settlement contract is executed by all parties or thirty (30) calendar days...”

• NAIC Model NAIC 697: Section 10E (Escrow of Settlement Proceeds)

  “Within three (3) business days after the date the escrow agent receives the document (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...”

• NAIC Model NAIC 697: Section 7A (Authority, Scope and Scheduling of Examinations)

  “In lieu of an examination under this Act of any foreign or alien licensee licensed in this state, the commissioner may, at the commissioner’s discretion, accept an examination report on the licensee as prepared by the commissioner for the licensee’s state of domicile or port-of-entry state.”

• NAIC Model NAIC 697: Section 10F (General Rules)

  “Failure to tender consideration to the viator for the viatical settlement contract within the time set forth in the disclosure pursuant to Section 8A(7) 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.”

• NAIC Viatical Settlements Model Act § 8C (Disclosure to Viator, broker disclosures)

  “A viatical settlement broker 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...”

• NAIC Viatical Settlements Model Act § 11A (Prohibited Practices)

  “It is a violation of this Act for any person to enter into a viatical settlement contract at any time prior to the application or issuance of a policy which is the subject of viatical settlement contract or within a five-year period commencing with the date of issuance of the insurance policy or...”

• NAIC Viatical Settlements Model Act § 11E (Prohibited Practices)

  “Upon receipt of a properly completed request for change of ownership or beneficiary of a policy, the insurer shall respond in writing within thirty (30) calendar days with written acknowledgement confirming that the change has been effected or specifying the reasons why the requested change cannot...”

• NAIC Viatical Settlements Model Act § 14A(3) (Fraud Prevention and Control)

  “A person in the business of viatical settlements shall not knowingly or intentionally permit any person convicted of a felony involving dishonesty or breach of trust to participate in the business of viatical settlements.”

Practice this material

Questions about this source

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