CS for SB 650 - Viatical Settlements

• Increases required deposit for viatical settlement provider licensees from $100,000 to $250,000 and removes obsolete June 1, 2005 transition provision.

• Requires annual statements to include unsettled contract data, five-year policy purchase history by state, and compensation information; increases administrative fines from $2,500/$10,000 to $10,000/$25,000 for nonwillful and willful violations.

• Creates disclosure requirements for viatical settlement providers to provide viators with detailed statement showing broker compensation and complete reconciliation from gross offer to net proceeds before contract execution.

• Prohibits viatical settlement contracts within 5 years of policy issuance (increased from 2 years) unless viator meets specific exemptions including terminal/chronic illness, life changes, or conversion from group coverage; requires sworn affidavits and documentation.

• Prohibits conflicts of interest between providers and brokers, requires filing of promotional materials with Office of Insurance Regulation, bans references to free insurance, criminalizes fraudulent viatical settlement acts with felony penalties based on policy value, and voids contracts involving stranger-originated life insurance practices.