HB 4890 Summary

• Creates comprehensive regulatory framework for viatical settlement contracts (life insurance policy sales by terminally/chronically ill individuals) including licensing requirements for providers and facilitators, disclosure obligations, and consumer protections.

• Establishes minimum financial responsibility standards ($250,000 equity or surety bond) for viatical settlement providers and requires anti-fraud plans with fraud investigators and reporting procedures.

• Prohibits stranger-originated life insurance (STOLI) schemes where policies are purchased primarily for investment rather than legitimate insurance purposes, with civil penalties up to $10,000 per violation and criminal penalties up to 10 years imprisonment.

• Requires 5-year waiting period before viatical settlements on policies (with limited exceptions for conversion rights, charitable organizations, terminal/chronic illness, or specific life events) and mandates viator rescission rights for 30 days after contract signing or 15 days after receiving proceeds.

• Repeals 1996 PA 386 and is contingent on enactment of HB 4891; grants Commissioner of Insurance authority to adopt implementing rules and assess examination costs against licensees.