HB 4230 Summary

• Adds Chapter 43 to the Insurance Code to regulate viatical settlement contracts (agreements where terminally/chronically ill individuals sell their life insurance policy death benefits for cash).

• Requires licensing of viatical settlement providers and facilitators by the insurance commissioner, with specific application fees ($1,000 for providers, $200 for facilitators) and financial responsibility requirements.

• Establishes disclosure requirements for viatical settlement contracts, including information about alternatives, tax consequences, government assistance impacts, and investor financial interest in the insured's death.

• Creates anti-fraud provisions prohibiting stranger-originated life insurance (STOLI), requires insurers to detect and prevent STOLI, and establishes penalties up to 10 years imprisonment and $500,000 in fines for fraudulent viatical settlement acts.

• Repeals the prior viatical settlement law (1996 PA 386) and makes this act contingent on passage of a related bill (HB 4229).