CS/CS/HB 445 – Viatical Settlements Summary

• Adds new definitions including "business of viatical settlements," "fraudulent viatical settlement act," and "stranger-originated life insurance practice" to regulate viatical settlement transactions.

• Requires viatical settlement providers to provide viators with disclosure statements detailing broker compensation and a complete reconciliation of gross offer amounts to net proceeds before contract execution.

• Reduces the contestability period for viatical settlement contracts from 5 years to 2 years from policy issuance, with exceptions for conversions from group policies, charitable organizations, and other specified circumstances.

• Increases administrative fines for viatical settlement provider violations from $10,000 to $25,000 for nonwillful violations and from $25,000 to $100,000 for willful violations; adds "fraudulent viatical settlement act" as grounds for license suspension or revocation.

• Prohibits stranger-originated life insurance practices and conflicts of interest between viatical settlement brokers and providers; requires filing of promotional materials with regulators; establishes criminal penalties (felonies) for violations based on policy value.

• Makes contracts related to stranger-originated life insurance practices void and unenforceable effective July 1, 2016.