Viaticals Settlements Licensing
IC 27-8-19.8-1 and 760 IAC 1-61-1
Viatical Settlement Agents and Brokers
Agent – A viatical settlement agent is a person that solicits, offers, or attempts to negotiate a viatical settlement contract with a viator. An agent is deemed to represent only the viatical settlement provider. An agent may not seek or obtain any compensation from the viator in connection with the viatical settlement transaction.
Broker – A viatical settlement broker is a person or company that represents a viator and for a fee, commission, or other valuable consideration, solicits offers, or attempts to negotiate viatical settlements between a viator and one or more viatical settlement provider. A broker is deemed to represent only the viator’s interests and shall owe a fiduciary duty to the viator to act according to the viator’s instructions and in the viator’s best interests.
Agent and Broker Declaration Instructions
Items 1 & 2 are to be submitted by viatical Agent
Items 1 – 4 are to be submitted by viatical Broker
- Completed Viatical Agent/Broker Declaration Application form.
- Proof of licensure as an Indiana life producer per IC 27-1-15.6.
- Copy of any disclosure forms per IC 27-8-19.8-23 and 760 IAC 1-61-7 with Disclosure Compliance Checklist.
- Copy of the brochure describing the viatical or life settlement process per IC 27-8-1938-23.
*A letter of Declaration will be sent to the applicant after the application is reviewed and approved. This Declaration is perpetual and does not require to be renewed as long as an Indiana life producer license is valid.
Please submit all materials to:
Company Admission Coordinator
Indiana Department of Insurance
311 W. Washington St, Suite 311
Indianapolis IN 46204
Requirements for Brokers
All forms used by a Broker must be approved by the Department before they are given to a viator. Please send the corresponding checklist along with the document(s). Documents to be approved include any disclosure form, contract, or brochure used.
Agent and Broker FAQ’s
Q. What is the definition of a Viatical Agent?
A. A viatical settlement agent is a person that solicits, offers, or attempts to negotiate a viatical settlement contract with a viator. An agent is deemed to represent only the viatical settlement provider. An agent may not seek or obtain any compensation from the viator in connection with the viatical settlement transaction
Q. What is the definition of a Viatical Broker?
A. A viatical settlement broker is a person/company that represents a viator and for a fee, commission, or other valuable consideration, solicits offers, or attempts to negotiate viatical settlements between a viator and one (1) or more viatical settlement providers. The broker is deemed to represent only the viator’s interests and shall owe a fiduciary duty to the viator to act according to the viator’s instructions and in the viator’s best interests.
Q. Is there a fee?
A. No. The declaration is not a license, rather it is a document that declares the individual or company will be acting as a agent/broker in the state. As long as the individual has a current life license, the broker/agent viatical declaration will remain active.
Q. Are there annual reporting requirements?
Q. When does the declaration renew?
A. The declaration is perpetual, it does not renew.
Q. Who applies for an agent/broker declaration?
A. Any producer or producer organization that holds a valid Indiana life license. All individuals and companies acting as agents/brokers must have a declaration on file.
Q. If I am applying as a broker and I have a company do I need to apply in the company name and my own name?
A. Yes, you would need to file two application forms.
Q. What information should the agent/broker submit with their declaration?
A. All information requested in the application. The broker must also submit the disclosure form that will be used along with the disclosure checklist form found on our website.
Q. How long will it take for a declaration to be approved?
A. There is no formal approval time of viatical agent/broker declarations.
Viatical Settlement Providers
Provider License Application Instructions
A viatical settlement provider means a person or company that enters into a viatical settlement contract with a viator or obtains financing for the purchase, acquisition, transfer, or other assignment of one or more viatical settlement contracts, viaticated policies, or interests therein, or otherwise sells, assigns, transfers, pledges, hypothecates, or disposes of one or more viatical settlement contracts, viaticated policies, or interests therein.
Please submit the following items for Indiana Viatical Settlement Provider License:
- Completed Application for Licensure as Viatical Settlement Provider
- Licensing fee of $1,000.
- Copies of the applicant’s organization documents, including but not limited to:
- Articles of incorporation or association
- Partnership agreement
- Biographical Affidavits for all officers, directors, stockholders, investors, partners, trustees or members holding ten percent (10%) or more voting securities. All new biographical affidavits must be originally signed, dated and notarized.
- List of all business licenses
- Listing of parent, subsidiary and affiliated entities.
- A copy of the most current audited financial statement showing a net worth in the amount of not less than $150,000.
- A copy of any viatical settlement contract to be used, along with the Contract Compliance Checklist.
- A copy of any disclosure form to be used, along with the Disclosure Form Compliance Checklist.
- Plan of operation including escrow accounts and banks, advertising, marketing techniques.
- All non-resident applicants must submit a Uniform Consent to Service of Process form
Please submit Application to:
Company Admission Coordinator
Indiana Department of Insurance
311 W. Washington St, Suite 300
Indianapolis, IN 46204
Q. What information should be submitted to the Department?
A. All information required in the application plus all forms that will be used in a viatical transaction. All applications and documentation must be sent via postal mail.
Q. What is the licensing fee?
A. The fee is $1,000
Q. What is the requisite net worth a provider must have?
A. $150,000 demonstrated by the most recent audited financial statement.
Q. How long does the process take?
A. The Department has 30 days to determine whether an application is complete. Once the application is deemed complete, the Department has thirty (30) days to approve or deny the license.
Q. How will the Provider know when their license has been approved?
A. Once the license is approved; the Department issues a license certificate to be used as evidence of licensure in Indiana. Also, all forms will be sent to the licensee with an approved stamp to indicate they have been approved.
The office of General Counsel issued the following informal opinion on February 19, 2002, representing the position of the New York State Insurance Department.
Re: Viatical Settlement, Definition of "Viator"
Does a viator, as defined in New York Insurance Law § 7801(b) (McKinney 2000), have to be the insured?
Yes, that was the Legislative intent.
In comparing New York Insurance Law Article 78 with Regulation 148, N.Y. Comp. R. & Regs. tit. 11, Part 380 (2001), the inquirer discovered what he believes are inconsistencies between the Regulation and the statutory definitions as to whether the viator has to be the insured.
New York Insurance Law § 7801(a) (McKinney 2000) defines "viatical settlement company":
Viatical settlement company means an individual, partnership, corporation or other entity not prohibited from acting as a viatical settlement company . . . that enters into an agreement with a person owning a life insurance policy insuring the life of a person who has a catastrophic or life threatening illness or condition, under the terms of which the viatical settlement company pays compensation or anything of value, which compensation or value is less than the expected death benefit of the insurance policy, in return for the policyowner's assignment, transfer, sale, devise or bequest of the death benefit or ownership of the insurance policy to the viatical settlement company. . . .
New York Insurance Law § 7801(b) defines "viator":
Viator means the owner of a life insurance policy insuring the life of a person who has a catastrophic or life threatening illness or condition, who enters into an agreement under which the viatical settlement company will pay compensation or anything of value, which compensation or value is less than the expected death benefit of the insurance policy, in return for the viator's assignment, transfer, sale, devise or bequest of the death benefit or ownership of the insurance policy to the viatical settlement company. Viator may also include a person insured under a group life insurance policy who is not prohibited from assigning his or her rights or benefits and who assigns those rights or benefits by a viatical settlement.
When this Department commented to the Governor concerning the bill, Senate Bill 5303-A (Sen. Velella), that enacted New York Insurance Law Article 78, 1993 N.Y. Laws 638, it noted with respect to New York Insurance Law §7801 that: "Many of these definitions will need to be clarified by interpretation by the Department." It is axiomatic that an administrative agency, such as this Department, is expected to fill in the interstices left by the Legislature. Dorst v. Pataki, 90 N.Y.2d 296, 665 N.Y.S. 2d 65 (1997). The Legislature contemplated this eventuality when it authorized the Superintendent of Insurance to promulgate regulations with respect to viatical settlements. New York Insurance Law § 7810 (McKinney 2000).
There is no definition of viator in Regulation 148. The Regulation, however, provides, N.Y. Comp. R. & Regs. tit. 11, § 380.9 (2001):
(a) A viator may not assign, transfer, sell, devise or bequeath to a viatical settlement company: (1) a death benefit for any insured other than the viator; or (2) any accidental death benefit.
(b) A viator may not assign death benefits under a joint life insurance or a joint survivorship policy unless the other insured has predeceased the viator.
Thus, this Department believes that it is clear from the language of N.Y. Comp. R. & Regs. tit. 11, § 380.9(a) that the owner/viator must also be the insured. Furthermore, this Department does not agree that the language in N.Y. Comp. R. & Regs. tit. 11, § 380.9(a) is inconsistent with the legislative intent. The language of New York Insurance Law 7801 may not be interpreted without consideration of other portions of New York Insurance Law Article 78. New York Insurance Law § 7808(a) (McKinney 2000) provides:
A viatical settlement company entering into a viatical settlement with any viator shall first obtain a duly witnessed and authorized application in which the viator consents to the viatical settlement, acknowledges the catastrophic or life-threatening illness, represents that he or she has a full and complete understanding of the viatical settlement, that he or she has a full and complete understanding of the benefits of the life insurance policy, releases his or her medicalrecords, and acknowledges that he or she has entered into the viatical settlement freely and voluntarily. (emphasis added)
The above quoted portion of New York Insurance Law § 7801(b), when read in conjunction with New York Insurance Law § 7808(a), clearly indicates that the Legislature contemplated the viator and insured, with respect to individual life insurance, would be the same individual. Thus, this Department in its regulatory function has always interpreted N.Y. Comp. R. & Regs. tit. 11, § 380.9(a), quoted above, to prohibit a policyholder from selling such a policy insuring another to a viatical settlement company.
As to group life insurance policies, although New York Insurance Law § 7809 (McKinney 2000) contemplates that the insured may be other than the policyholder, the insured individual must be the one who sells the policy.
The inquirer also cited various provisions of N.Y. Comp. R. & Regs. tit. 11, § 380.6(g) (2001) that he believes contain inconsistent statements:
(g) The application for the viatical settlement contract shall: (1) set forth a prominently displayed notice to read as follows: "Receipt of payment pursuant to a viatical settlement may affect eligibility for public assistance programs such as medical assistance (medicaid), aid to families with dependent children, supplementary social security income, and AIDS drug assistance programs and may be taxable. Prior to applying for a viatical settlement, policyowners should consult with the appropriate social services agency concerning how receipt will affect the eligibility of the recipient and the recipient's spouse or dependents, and with a qualified tax advisor.";
(2) contain the applicant's consent to the viatical settlement, an acknowledgement by the applicant that he or she has a catastrophic or life-threatening illness, and the applicant's representation that he or she has a full and complete understanding of the viatical settlement;
(3) contain a provision that the proposal which the viatical settlement company will deliver to the applicant before the viatical settlement is signed will not include a detailed description of how the payment amount was determined unless the applicant specifically requests in the application such detailed description which shall also include the assumed life expectancy of the viator if requested by the applicant;
The notice required by N.Y. Comp. R. & Regs. tit. 11, § 380.6(g)(1) has been enacted in haec verba from that prescribed by New York Insurance Law § 7807(a) (McKinney 2001). Accordingly, there can be no inconsistency with the statute. With respect to N.Y. Comp. R. & Regs. tit. 11, § 380.6(g)(2), this Department does not believe that there is either an inconsistency with the statute or the possibility of a misimpression.
This Department notes the inquirers belief that in N.Y. Comp. R. & Regs. tit. 11, § 380.6(g)(3) "there appears the idea that the applicant is different from the viator, but it is the viators life expectancy which is to be considered in the application." The Department disagrees but will consider whether the statute or Regulation should be amended to eliminate any possible confusion.
For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.