093_HB3659

 
                                     LRB093 09241 JLS 09474 b

 1        AN ACT concerning viatical settlements.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Viatical Settlements Act  is  amended  by
 5    changing  Sections  5,  10,  15,  20,  35, 40, 45, and 50 and
 6    adding Sections 47 and 49 as follows:

 7        (215 ILCS 158/5)
 8        Sec. 5.  Definitions.  As used in this Act, the following
 9    definitions apply:
10        "Advertising" means any written, electronic,  or  printed
11    communication  or  any  communication  by  means  of recorded
12    telephone messages or transmitted on radio,  television,  the
13    Internet,  or  similar  communications  media, including film
14    strips, motion pictures and videos, published,  disseminated,
15    circulated,   or   placed  before  the  public,  directly  or
16    indirectly, for the purpose of creating  an  interest  in  or
17    inducing a person to purchase or sell a life insurance policy
18    or  an  interest  in  a  life  insurance policy pursuant to a
19    viatical  settlement  contract  or  a   viatical   settlement
20    purchase agreement.
21        "Business  of  viatical  settlements"  means  an activity
22    involved in, but not limited to, the offering,  solicitation,
23    negotiation,     procurement,    effectuation,    purchasing,
24    investing,  financing,  monitoring,  tracking,  underwriting,
25    selling, transferring, assigning, pledging, hypothecating  or
26    in  any  other  manner,  of  viatical settlement contracts or
27    purchase agreements.
28        "Chronically ill" means:
29             (1)  being unable to perform at least  2  activities
30        of  daily  living (i.e., eating, toileting, transferring,
31        bathing, dressing, or continence);
 
                            -2-      LRB093 09241 JLS 09474 b
 1             (2)  requiring substantial  supervision  to  protect
 2        the  individual  from threats to health and safety due to
 3        severe cognitive impairment; or
 4             (3)  having a level of disability  similar  to  that
 5        described in paragraph (1) as determined by the Secretary
 6        of Health and Human Services;
 7        "Director" means the Director of Insurance.
 8        "Financing entity" means an underwriter, placement agent,
 9    lender,  purchaser  of  securities,  purchaser of a policy or
10    certificate  from  a  viatical  settlement  provider,  credit
11    enhancer, or any entity that has  a  direct  ownership  in  a
12    policy  or  certificate  that  is  the  subject of a viatical
13    settlement contract, but:
14                  (A)  whose principal activity  related  to  the
15             transaction   is   providing  funds  to  effect  the
16             viatical settlement  or  purchase  of  one  or  more
17             viaticated policies; and
18                  (B)  who  has  an agreement in writing with one
19             or more licensed viatical  settlement  providers  to
20             finance   the  acquisition  of  viatical  settlement
21             contracts.
22        Financing  entity  does  not  include  a   non-accredited
23    investor or viatical settlement purchaser.
24        "Fraudulent  viatical settlement act" includes any of the
25    following:
26             (1)  Acts or omissions committed by any person  who,
27        knowingly  or  with intent to defraud, for the purpose of
28        depriving another of  property  or  for  pecuniary  gain,
29        commits, or permits its employees or its agents to engage
30        in acts including:
31                  (A)  presenting,  causing  to  be presented, or
32             preparing with knowledge or belief that it  will  be
33             presented  to  or by a viatical settlement provider,
34             viatical  settlement  broker,  viatical   settlement
 
                            -3-      LRB093 09241 JLS 09474 b
 1             purchaser,  viatical  settlement  investment  agent,
 2             financing  entity,  insurer,  insurance producer, or
 3             any  other  person  false  material  information  or
 4             concealing material  information,  as  part  of,  in
 5             support  of, or concerning a fact material to one or
 6             more of the following:
 7                       (i)  an application for the issuance of  a
 8                  viatical   settlement   contract  or  insurance
 9                  policy;
10                       (ii)  the  underwriting  of   a   viatical
11                  settlement contract or insurance policy;
12                       (iii)  a  claim  for  payment  or  benefit
13                  pursuant  to  a viatical settlement contract or
14                  insurance policy;
15                       (iv)  premiums paid on an insurance policy
16                  or  as  a  result  of  a  viatical   settlement
17                  purchase agreement;
18                       (v)  payments  and changes in ownership or
19                  beneficiary made in accordance with  the  terms
20                  of  a  viatical  settlement  contract, viatical
21                  settlement  purchase  agreement,  or  insurance
22                  policy;
23                       (vi)  the reinstatement or  conversion  of
24                  an insurance policy;
25                       (vii)  the       solicitation,      offer,
26                  effectuation, or sale of a viatical  settlement
27                  contract,   insurance   policy,   or   viatical
28                  settlement purchase agreement;
29                       (viii)  the  issuance  of written evidence
30                  of  viatical  settlement   contract,   viatical
31                  settlement purchase agreement, or insurance; or
32                       (ix)  a financing transaction; or
33                  (B)  employing  any device, scheme, or artifice
34             to defraud related to viaticated policies.
 
                            -4-      LRB093 09241 JLS 09474 b
 1             (2)  In the furtherance of a fraud or to prevent the
 2        detection of a fraud any person commits  or  permits  its
 3        employees or its agents to;
 4                  (A)  remove,   conceal,   alter,   destroy,  or
 5             sequester from the Director the assets or records of
 6             a licensee or other person engaged in  the  business
 7             of viatical settlements;
 8                  (B)  misrepresent   or  conceal  the  financial
 9             condition of a licensee, financing entity,  insurer,
10             or other person;
11                  (C)  transact    the   business   of   viatical
12             settlements  in  violation  of  laws   requiring   a
13             license,  certificate  of  authority  or other legal
14             authority, for the transaction of  the  business  of
15             viatical settlements; or
16                  (D)  file   with  the  Director  or  the  chief
17             insurance    regulatory    official    of    another
18             jurisdiction a document containing false information
19             or otherwise conceal information  about  a  material
20             fact from the Director.
21             (3)  Embezzlement,   theft,   misappropriation,   or
22        conversion  of moneys, funds, premiums, credits, or other
23        property of  a  viatical  settlement  provider,  insurer,
24        insured,  viator,  insurance  policyowner,  or  any other
25        person engaged in the business of viatical settlements or
26        insurance.
27             (4)  Recklessly   entering   into,   brokering,   or
28        otherwise dealing in a viatical settlement contract,  the
29        subject  of  which  is  a  life insurance policy that was
30        obtained by presenting false information  concerning  any
31        fact  material  to  the  policy or by concealing, for the
32        purpose of misleading another, information concerning any
33        fact material to the  policy,  when  the  viator  or  the
34        viator's  agent  intended to defraud the policy's issuer.
 
                            -5-      LRB093 09241 JLS 09474 b
 1        "Recklessly" means engaging in the conduct  in  conscious
 2        and  clearly  unjustifiable  disregard  of  a substantial
 3        likelihood of the existence  of  the  relevant  facts  or
 4        risks,  such  disregard  involving a gross deviation from
 5        acceptable standards of conduct.
 6             (5)  Attempting  to  commit,  assisting,  aiding  or
 7        abetting in the commission of, or  conspiracy  to  commit
 8        the acts or omissions specified in this definition.
 9        "Person"   means   any   natural   or  artificial  entity
10    including, but not  limited  to,  individuals,  partnerships,
11    associations, trusts, or corporations.
12        "Terminally ill" means having an illness or sickness that
13    can reasonably be expected to result in death in 24 months or
14    less.
15        "Viatical   settlement   agent"   means   an  individual,
16    partnership,  corporation,  or  other  entity   who   through
17    appointment  by at least one viatical settlement provider and
18    for a  fee,  commission,  or  other  valuable  consideration,
19    offers   or   advertises   the   availability   of   viatical
20    settlements,   introduces   viators  to  viatical  settlement
21    providers,  or  offers  or  attempts  to  negotiate  viatical
22    settlements  between  a  viator  and  one  or  more  viatical
23    settlement providers.  "Viatical settlement agent"  does  not
24    include  an  attorney  licensed  to  practice  law,  a public
25    accountant as defined in the Illinois Public Accounting  Act,
26    or  a  person  licensed under the Debt Management Service Act
27    retained to represent the viator whose  compensation  is  not
28    paid by the viatical settlement provider.
29        "Viatical  settlement  broker"  means  a  person  that on
30    behalf of a viator  and  for  a  fee,  commission,  or  other
31    valuable   consideration  offers  or  attempts  to  negotiate
32    viatical settlement contracts between a  viator  and  one  or
33    more   viatical  settlement  providers.  Notwithstanding  the
34    manner  in  which   the   viatical   settlement   broker   is
 
                            -6-      LRB093 09241 JLS 09474 b
 1    compensated,  a  viatical  settlement  broker  is  deemed  to
 2    represent  only  the  viator and owes a fiduciary duty to the
 3    viator to act according to the viator's instructions  and  in
 4    the best interest of the viator. The term does not include an
 5    attorney, certified public accountant, or a financial planner
 6    accredited  by  a  nationally recognized accreditation agency
 7    who  is  retained  to  represent   the   viator   and   whose
 8    compensation  is  not  paid  directly  or  indirectly  by the
 9    viatical settlement provider or purchaser.
10        "Viatical settlement contract" means a written  agreement
11    establishing  the  terms under which compensation or anything
12    of value will be paid, which compensation or  value  is  less
13    than  the  expected  death benefit of the insurance policy or
14    certificate, in return for the viator's assignment, transfer,
15    sale, devise, or bequest of the death benefit or ownership of
16    any  portion  of  the  insurance  policy  or  certificate  of
17    insurance. A viatical settlement  contract  also  includes  a
18    contract  for  a  loan  or other financing transaction with a
19    viator secured primarily  by  an  individual  or  group  life
20    insurance  policy,  other  than  a  loan  by a life insurance
21    company pursuant to the terms of the life insurance contract,
22    or a loan secured by the cash value of a policy.  A  viatical
23    settlement  contract  includes  an agreement with a viator to
24    transfer ownership or change the beneficiary designation at a
25    later date regardless of the date that compensation  is  paid
26    to  the  viator.  entered  into between a viatical settlement
27    provider and a person who owns a life insurance policy or who
28    owns or is covered under a group policy, insuring the life of
29    a person who has a catastrophic or life  threatening  illness
30    or  condition.  The agreement shall establish the terms under
31    which the viatical settlement provider will pay  compensation
32    or  anything  of  value,  which compensation or value is less
33    than the expected death benefit of the  insurance  policy  or
34    certificate,  in  return  for  the  policyowner's assignment,
 
                            -7-      LRB093 09241 JLS 09474 b
 1    transfer, sale, devise, or bequest of the  death  benefit  or
 2    ownership  of  the  insurance  policy  or  certificate to the
 3    viatical settlement provider.
 4        "Viatical settlement provider" means a person, other than
 5    a  viator,  that  enters  into  or  effectuates  a   viatical
 6    settlement  contract.  Viatical  settlement provider does not
 7    include:
 8             (1)  a  bank,  savings  bank,   savings   and   loan
 9        association,  credit  union,  or  other  licensed lending
10        institution that takes an assignment of a life  insurance
11        policy as collateral for a loan;
12             (2)  the issuer of a life insurance policy providing
13        accelerated  benefits  under  the Illinois Insurance Code
14        and pursuant to the contract;
15             (3)  an authorized or eligible insurer that provides
16        stop loss coverage to  a  viatical  settlement  provider,
17        purchaser,  financing  entity, special purpose entity, or
18        related provider trust;
19             (4)  a natural person who enters into or effectuates
20        no more than one agreement in a  calendar  year  for  the
21        transfer  of  life  insurance policies for any value less
22        than the expected death benefit;
23             (5)  a financing entity;
24             (6)  a special purpose entity;
25             (7)  a related provider trust;
26             (8)  a viatical settlement purchaser; or
27             (9)  an    accredited    investor    or    qualified
28        institutional buyer as defined respectively in Regulation
29        D, Rule 501 or Rule 144A of the Federal Securities Act of
30        1933, as amended, and who purchasers a viaticated  policy
31        from a viatical settlement provider.
32        "Viatical   settlement  provider"  means  an  individual,
33    partnership, corporation, or other entity that enters into an
34    agreement with a person who owns a life insurance policy,  or
 
                            -8-      LRB093 09241 JLS 09474 b
 1    who  owns  or  is  covered under a group policy, insuring the
 2    life of a person who has a catastrophic or  life  threatening
 3    illness  or  condition, under the terms of which the viatical
 4    settlement provider pays compensation or anything  of  value,
 5    which  compensation  or value is less than the expected death
 6    benefit of the insurance policy or certificate, in return for
 7    the policyowner's  assignment,  transfer,  sale,  devise,  or
 8    bequest  of  the  death benefit or ownership of the insurance
 9    policy or certificate to the  viatical  settlement  provider.
10    "Viatical settlement provider" does not include:
11             (1)  a  licensed  insurance  company,  bank, savings
12        bank,  savings  and  loan  association,   credit   union,
13        commercial  finance  company  or  other  licensed lending
14        institution,  investment  company  registered  under  the
15        Investment Company Act of 1940,  pension  plan  qualified
16        under  Section  401(a)  of  the  Internal Revenue Code of
17        1986, or trust funding such a pension plan that takes  an
18        assignment  of a life insurance policy only as collateral
19        for a loan;
20             (2)  sophisticated investors meeting  the  standards
21        of  subsection  H of Section 4 of the Illinois Securities
22        Law of 1953 who invest in or lend to a licensed  viatical
23        settlement  provider  or  other  persons  who  so  invest
24        pursuant to a registered security offering; or
25             (3)  the issuer of a life insurance policy providing
26        accelerated benefits under the Illinois Insurance Code.
27        "Viatical  settlement purchaser" means a person who gives
28    a sum of money as consideration for a life  insurance  policy
29    or  an  interest  in  the  death benefits of a life insurance
30    policy, or a person who owns or acquires or is entitled to  a
31    beneficial   interest   in  a  trust  that  owns  a  viatical
32    settlement contract or is the beneficiary of a life insurance
33    policy that has been or will be the  subject  of  a  viatical
34    settlement  contract, for the purpose of deriving an economic
 
                            -9-      LRB093 09241 JLS 09474 b
 1    benefit.
 2        "Viaticated policy" means a life insurance policy held by
 3    a  viatical  settlement  provider,  directly  or  indirectly,
 4    through a viatical settlement contract.
 5        "Viator" means a person who owns a life insurance policy,
 6    or who owns or is covered under a group policy, and  insuring
 7    the  life of a person with a catastrophic or life threatening
 8    illness or condition who enters into an agreement under which
 9    the viatical settlement provider  will  pay  compensation  or
10    anything  of  value, which compensation or value is less than
11    the  expected  death  benefit  of  the  insurance  policy  or
12    certificate, in return for the viator's assignment, transfer,
13    sale, devise, or bequest of the death benefit or ownership of
14    the  insurance  policy  or  certificate   to   the   viatical
15    settlement provider.
16    (Source: P.A. 89-484, eff. 6-21-96; 90-545, eff. 1-1-98.)

17        (215 ILCS 158/10)
18        Sec. 10.  License requirements.
19        (a)  No  individual,  partnership,  corporation, or other
20    entity may operate act  as  a  viatical  settlement  provider
21    without first having obtained a license from the Director.
22        (b)  Application   for  a  viatical  settlement  provider
23    license shall be made to the Director by the applicant  on  a
24    form  prescribed  by  the Director.  The application shall be
25    accompanied by a fee of $1,500, which shall be deposited into
26    the Insurance Producer Administration Fund.
27        (c)  Viatical  settlement  providers'  licenses  may   be
28    renewed  from  year  to year on the anniversary date upon (1)
29    submission of renewal forms prescribed by  the  Director  and
30    (2) payment of the annual renewal fee of $750, which shall be
31    deposited  into  the  Insurance Producer Administration Fund.
32    Failure to pay the fee within the  terms  prescribed  by  the
33    Director shall result in the expiration of the license.
 
                            -10-     LRB093 09241 JLS 09474 b
 1        (d)  Applicants  for  a  viatical  settlement  provider's
 2    license  shall  provide  such information as the Director may
 3    require.   The Director shall have authority, at any time, to
 4    require the applicant to fully disclose the identity  of  all
 5    stockholders,   partners,   officers,   and  employees.   The
 6    Director may, in the exercise of discretion, refuse to  issue
 7    a   license   in  the  name  of  any  firm,  partnership,  or
 8    corporation if  not  satisfied  that  an  officer,  employee,
 9    stockholder,  or partner thereof who may materially influence
10    the applicant's conduct meets the standards of this Act.
11        (e)  A viatical settlement provider's license issued to a
12    partnership, corporation,  or  other  entity  authorizes  all
13    members,   officers,  and  designated  employees  to  act  as
14    viatical settlement providers under the license.   All  those
15    persons  must be named in the application and any supplements
16    thereto.
17        (f)  Upon the filing of an  application  for  a  viatical
18    settlement  provider's license and the payment of the license
19    fee,  the  Director  shall  make  an  investigation  of   the
20    applicant  and may issue a license if the Director finds that
21    the applicant:
22             (1)  has provided a detailed plan of operation;
23             (2)  is competent and trustworthy and intends to act
24        in good faith in the capacity authorized by  the  license
25        applied for;
26             (3)  has  a  good  business  reputation  and has had
27        experience, training, or education so as to be  qualified
28        in the business for which the license is applied for; and
29             (4)  if a corporation, is a corporation incorporated
30        under  the  laws  of  this State or a foreign corporation
31        authorized to transact business in this State.
32        (g)  The  Director  may  not  issue  a   license   to   a
33    nonresident  applicant,  unless  a  written designation of an
34    agent for service of process is filed and maintained with the
 
                            -11-     LRB093 09241 JLS 09474 b
 1    Director or the applicant has filed  with  the  Director  the
 2    applicant's  written  irrevocable  consent  that  any  action
 3    against  the applicant may be commenced against the applicant
 4    by service of process on the Director.
 5        (h)  A   viatical   settlement   provider   must   assume
 6    responsibility for all  actions  of  its  appointed  viatical
 7    settlement agents associated with a viatical settlement.
 8        (i)  A  viatical settlement provider, viatical settlement
 9    broker, or viatical settlement investment agent shall provide
10    to the Director new or revised  information  about  officers,
11    10%  or  more  stockholders, partners, directors, members, or
12    designated employees within 30 days of a  change  in  any  of
13    them.
14    (Source: P.A. 89-484, eff. 6-21-96.)

15        (215 ILCS 158/15)
16        Sec. 15.  License revocation.
17        (a)  The  Director  has  the right to suspend, revoke, or
18    refuse to  renew  the  license  of  any  viatical  settlement
19    provider if the Director finds that:
20             (1)  there   was   any   misrepresentation   in  the
21        application for the license;
22             (2)  the holder of the license has  been  guilty  of
23        fraudulent  or dishonest practices, is subject to a final
24        administrative  action,  or  is  otherwise  shown  to  be
25        untrustworthy  or  incompetent  to  act  as  a   viatical
26        settlement provider;
27             (3)  the   licensee   demonstrates   a   pattern  of
28        unreasonable or  untimely  payments  to  policyowners  or
29        their designees;
30             (4)  (Blank);  the  licensee has been convicted of a
31        felony or any misdemeanor of which criminal fraud  is  an
32        element; or
33             (5)  the  licensee has violated any of the provision
 
                            -12-     LRB093 09241 JLS 09474 b
 1        of this Act;.
 2             (6)  the licensee no longer meets  the  requirements
 3        for initial licensure;
 4             (7)  the  licensee  or any officer, partner, member,
 5        or key management personnel has violated any provision of
 6        this Act;
 7             (8)  the licensee or any officer,  partner,  member,
 8        or  key management personnel has been found guilty of, or
 9        has pleaded guilty or nolo contendere to, any felony,  or
10        to  a  misdemeanor  involving  fraud  or moral turpitude,
11        regardless of whether a judgment of conviction  has  been
12        entered by the court; or
13             (9)  the  viatical settlement provider has failed to
14        honor contractual  obligations  set  out  in  a  viatical
15        settlement  contract  or  a  viatical settlement purchase
16        agreement;
17        (b)  Before the Director denies a license application  or
18    suspends,  revokes,  or  refuses  to  renew  the license of a
19    viatical settlement provider, the Director  shall  conduct  a
20    hearing   in  accordance  with  the  Illinois  Administrative
21    Procedure Act.
22    (Source: P.A. 89-484, eff. 6-21-96.)

23        (215 ILCS 158/20)
24        Sec. 20.  Approval of viatical settlements  contracts.  A
25    person  shall  not  use  a  viatical  settlement  contract or
26    provide to a viator a disclosure statement form in this State
27    unless filed with and approved by the Director. The  Director
28    shall  disapprove  a  viatical  settlement  contract  form or
29    disclosure statement form if, in the Director's opinion,  the
30    contract  or  provisions  contained therein are unreasonable,
31    contrary  to  the  interests  of  the  public,  or  otherwise
32    misleading  or  unfair  to  the  viator.  At  the  Director's
33    discretion,  the  Director  may  require  the  submission  of
 
                            -13-     LRB093 09241 JLS 09474 b
 1    advertising material. No viatical settlement provider may use
 2    a viatical settlement contract in this State  unless  it  has
 3    been  filed  with  and  approved by the Director.  A viatical
 4    settlement contract form filed with  the  Director  shall  be
 5    deemed approved if it has not been disapproved within 60 days
 6    of  the  filing.   The  Director  shall disapprove a viatical
 7    settlement contract form if, in the Director's  opinion,  the
 8    contract  or  provisions  contained therein are unreasonable,
 9    contrary, to  the  interests  of  the  public,  or  otherwise
10    misleading or unfair to the policyowner.
11    (Source: P.A. 89-484, eff. 6-21-96.)

12        (215 ILCS 158/35)
13        Sec. 35.  Disclosure.
14        (a)  With  each  application for a viatical settlement, a
15    viatical settlement provider or  viatical  settlement  broker
16    shall   provide  the  viator  with  at  least  the  following
17    disclosures no later than the time the  application  for  the
18    viatical  settlement  contract  is signed by all parties. The
19    disclosures shall be provided in a separate document that  is
20    signed  by the viator and the viatical settlement provider or
21    viatical settlement broker, and shall provide  the  following
22    information:   Prior   to  the  time  a  viatical  settlement
23    application is taken or the  time  an  offer  is  made  by  a
24    viatical  settlement  provider  to  a  person  considering  a
25    viatical   settlement,  whichever  is  later,  the  following
26    information shall be  provided  by  the  viatical  settlement
27    provider or its agent:
28             (1)  the  affiliation,  if any, between the viatical
29        settlement provider and the issuer of an insurance policy
30        to be viaticated;
31             (2)  if an insurance policy  to  be  viaticated  has
32        been  issued  as a joint policy or involves family riders
33        or any coverage of a life other than that  insured  under
 
                            -14-     LRB093 09241 JLS 09474 b
 1        the  policy to be viaticated, the viator must be informed
 2        of the possible loss of coverage on such other lives  and
 3        advised  to consult with his or her insurance producer or
 4        the company issuing the policy for advice on the proposed
 5        viatication.
 6        (b)  A viatical settlement provider shall disclose all of
 7    the following information to the viator  no  later  than  the
 8    date  the  viatical  settlement  contract  is  signed  by all
 9    parties:
10             (1)  Possible alternatives  to  viatical  settlement
11        contracts   for   persons   with   catastrophic  or  life
12        threatening illnesses  including,  but  not  limited  to,
13        accelerated  benefits  offered  by the issuer of the life
14        insurance policy.
15             (2)  The fact that some or all of  the  proceeds  of
16        the   viatical   settlement   may  be  taxable  and  that
17        assistance should be sought from a personal tax advisor.
18             (3)  The fact that the viatical settlement could  be
19        subject to the claims of creditors.
20             (4)  The  fact that receipt of a viatical settlement
21        may adversely  effect  the  recipients'  eligibility  for
22        Medicaid or other government benefits or entitlements and
23        that  advice  should  be  obtained  from  the appropriate
24        agencies.
25             (5)  The policyowner's right to rescind  a  viatical
26        settlement  contract  within  30  days  of the date it is
27        executed by all parties or within 15 days of the  receipt
28        of  the  viatical  settlement  proceeds  by  the  viator,
29        whichever  is  less,  as  provided  in  subsection (c) of
30        Section 45. If the insured  dies  during  the  rescission
31        period,  the  settlement contract shall be deemed to have
32        been rescinded, subject  to  repayment  of  all  viatical
33        settlement  proceeds  and  any  premiums, loans, and loan
34        interest  to  the   viatical   settlement   provider   or
 
                            -15-     LRB093 09241 JLS 09474 b
 1        purchaser.
 2             (6)  The  date  by which the funds will be available
 3        to the viator and the source of the funds.
 4             (7)  A description of any policy benefits other than
 5        death benefits and non-forfeiture values in the policy to
 6        be viaticated that may be of value,  such  as  additional
 7        purchase benefits, waiver of premium benefits, accidental
 8        death  benefits,  or  conversion  features.  The viatical
 9        settlement provider shall also disclose its  interest  in
10        such benefits and any options available to the viator for
11        additional compensation or contractual reservation to the
12        viator of policy options or other rights.
13        (c)  A  viatical  settlement  agent shall disclose all of
14    the following information to the viator  no  later  than  the
15    date  the  viatical  settlement  contract  is  signed  by all
16    parties:
17             (1)  The identity of the viatical settlement agent.
18             (2)  The  identity  of   the   viatical   settlement
19        provider.
20             (3)  The  nature  of  the  relationship  between the
21        viatical  settlement  agent   and   viatical   settlement
22        provider.
23        (d)  Funds  shall be sent to the viator within 3 business
24    days after the viatical settlement provider has received  the
25    insurer   or   group   administrator's   acknowledgment  that
26    ownership of the policy or interest in  the  certificate  has
27    been transferred and the beneficiary has been designated.
28        (e)  Disclosure to a viator shall include distribution of
29    a  brochure  describing  the process of viatical settlements.
30    The National Association of Insurance Commissioners' form for
31    the brochure shall be used unless one  is  developed  by  the
32    Director.
33        (f)  The  disclosure document shall contain the following
34    language: "All medical, financial,  or  personal  information
 
                            -16-     LRB093 09241 JLS 09474 b
 1    solicited  or  obtained  by a viatical settlement provider or
 2    viatical settlement broker about an  insured,  including  the
 3    insured's  identity  or  the  identity  of  family members, a
 4    spouse, or a significant other may be disclosed as  necessary
 5    to  effect the viatical settlement between the viator and the
 6    viatical settlement provider. If you  are  asked  to  provide
 7    this  information,  you  will  be  asked  to  consent  to the
 8    disclosure. The information may be provided  to  someone  who
 9    buys  the  policy or provides funds for the purchase. You may
10    be asked to renew your permission to share information  every
11    2 years.".
12        (g)  The  insured may be contacted by either the viatical
13    settlement   provider   or   broker   or    its    authorized
14    representative  for  the purpose of determining the insured's
15    health status. This contact is limited to once every 3 months
16    if the insured has a life expectancy of more than  one  year,
17    and  no  more  than  once per month if the insured has a life
18    expectancy of one year or less.
19        (h)  A viatical settlement  provider  shall  provide  the
20    viator  with at least the following disclosures no later than
21    the date the viatical settlement contract is  signed  by  all
22    parties.  The disclosures shall be conspicuously displayed in
23    the viatical settlement contract or in  a  separate  document
24    signed  by the viator and the viatical settlement provider or
25    viatical settlement broker  and  shall  provide  all  of  the
26    following information:
27             (1)  The  affiliation,  if any, between the viatical
28        settlement provider  and  the  issuer  of  the  insurance
29        policy to be viaticated.
30             (2)  The  name, address, and telephone number of the
31        viatical settlement provider.
32             (3)  A disclosure to a  prospective  viator  of  the
33        amount   and   method   of   calculating   the   broker's
34        compensation.  The  term "compensation" includes anything
 
                            -17-     LRB093 09241 JLS 09474 b
 1        of value paid or given to a  viatical  settlement  broker
 2        for the placement of a policy.
 3             (4)  A disclosure that, if an insurance policy to be
 4        viaticated  has been issued as a joint policy or involves
 5        family riders or any coverage of a life  other  than  the
 6        insured  under  the  policy to be viaticated, informs the
 7        viator of the possible loss  of  coverage  on  the  other
 8        lives  under  the  policy and shall be advised to consult
 9        with his or her insurance producer or the insurer issuing
10        the  policy  for  advice   on   the   proposed   viatical
11        settlement.
12             (5)  A  disclosure  that states the dollar amount of
13        the  current  death  benefit  payable  to  the   viatical
14        settlement  provider  under the policy or certificate. If
15        known,  the  viatical  settlement  provider  shall   also
16        disclose  the  availability  of any additional guaranteed
17        insurance benefits, the dollar amount of  any  accidental
18        death  and  dismemberment  benefits  under  the policy or
19        certificate,  and  the  viatical  settlement   provider's
20        interest in those benefits.
21             (6)  A disclosure of the name, business address, and
22        telephone  number  of  the independent third party escrow
23        agent, and the fact that the viator or owner may  inspect
24        or  receive  copies  of  the  relevant  escrow  or  trust
25        agreements or documents.
26        (i)  If   the   viatical  settlement  provider  transfers
27    ownership or changes the beneficiary of the insurance policy,
28    the viatical settlement provider shall communicate the change
29    in ownership or beneficiary to the  insured  within  20  days
30    after the change.
31        (j)  A  viatical  settlement  provider  shall provide the
32    viatical settlement purchaser with  at  least  the  following
33    disclosures   prior  to  the  date  the  viatical  settlement
34    purchase agreement is signed by all parties. The  disclosures
 
                            -18-     LRB093 09241 JLS 09474 b
 1    shall  be  conspicuously  displayed  in any viatical purchase
 2    contract or in a separate document  signed  by  the  viatical
 3    settlement  purchaser  and  viatical  settlement  provider or
 4    viatical settlement investment agent, and shall make  all  of
 5    the   following   disclosures   to  the  viatical  settlement
 6    purchaser:
 7             (1)  The purchaser will receive no returns, such  as
 8        dividends and interest, until the insured dies.
 9             (2)  The  actual annual rate of return on a viatical
10        settlement  contract  is  dependent  upon   an   accurate
11        projection  of  the  insured's  life  expectancy, and the
12        actual  date  of   the   insured's   death.   An   annual
13        "guaranteed" rate of return is not determinable.
14             (3)  The  viaticated  life insurance contract should
15        not  be  considered  a  liquid  purchase  since   it   is
16        impossible  to  predict  the exact timing of its maturity
17        and the funds probably are not available until the  death
18        of  the insured. There is no established secondary market
19        for resale of these products by the purchaser.
20             (4)  The purchaser may  lose  all  benefits  or  may
21        receive  substantially  reduced  benefits  if the insurer
22        goes out of business during  the  term  of  the  viatical
23        investment.
24             (5)  The purchaser is responsible for payment of the
25        insurance  premium  or other costs related to the policy,
26        if  required  by  the  terms  of  the  viatical  purchase
27        agreement. These  payments  may  reduce  the  purchaser's
28        return.   If   a   party  other  than  the  purchaser  is
29        responsible for the payment, the name and address of that
30        party also shall be disclosed.
31             (6)  The purchaser is responsible for payment of the
32        insurance premiums or other costs related to  the  policy
33        if  the insured returns to health and the amount of those
34        premiums, if applicable.
 
                            -19-     LRB093 09241 JLS 09474 b
 1             (7)  The name and address of  any  person  providing
 2        escrow services and the relationship to the broker.
 3             (8)  The  amount of any trust fees or other expenses
 4        to be charged to the viatical settlement purchaser  shall
 5        be disclosed.
 6             (9)  A   disclosure  of  whether  the  purchaser  is
 7        entitled to a refund  of  all  or  part  of  his  or  her
 8        investment under the settlement contract if the policy is
 9        later determined to be null and void.
10             (10)  A  disclosure  that group policies may contain
11        limitations  or  caps  in  the  conversion  rights,  that
12        additional premiums may have to be paid if the policy  is
13        converted,  that discloses name the party responsible for
14        the payment of the additional premiums and,  if  a  group
15        policy  is  terminated  and  replaced  by  another  group
16        policy,  that  there  may  be  no  right  to  convert the
17        original coverage.
18             (11)  A disclosure  of  the  risks  associated  with
19        policy  contestability including, but not limited to, the
20        risk that the purchaser will have  no  claim  or  only  a
21        partial  claim  to  death  benefits  should  the  insurer
22        rescind the policy within the contestability period.
23             (12)  A  disclosure of whether the purchaser will be
24        the  owner  of  the  policy  in  addition  to  being  the
25        beneficiary, and if the purchaser is the beneficiary only
26        and not also the owner, the special risks associated with
27        that status, including, but not limited to, the risk that
28        the beneficiary may be changed or the premium may not  be
29        paid.
30             (13)  A    description   of   the   experience   and
31        qualifications of the  person  who  determines  the  life
32        expectancy   of   the   insured,  i.e.,  in-house  staff,
33        independent physicians, and specialty  firms  that  weigh
34        medical   and   actuarial   data;  the  information  this
 
                            -20-     LRB093 09241 JLS 09474 b
 1        projection is based  on;  and  the  relationship  of  the
 2        projection  maker to the viatical settlement provider, if
 3        any.
 4        Disclosure to an investor shall include distribution of a
 5    brochure describing the process  of  investment  in  viatical
 6    settlements.    The   National   Association   of   Insurance
 7    Commissioners' form for the brochure shall be used unless one
 8    is developed by the Director.
 9        (k)  A viatical settlement  provider  shall  provide  the
10    viatical  settlement  purchaser  with  at least the following
11    disclosures no later than at  the  time  of  the  assignment,
12    transfer, or sale of all or a portion of an insurance policy.
13    The  disclosures  shall  be contained in a document signed by
14    the viatical settlement  purchaser  and  viatical  settlement
15    provider  or  viatical settlement investment agent, and shall
16    make  all  of  the  following  disclosures  to  the  viatical
17    settlement purchaser:
18             (1)  A  disclosure  of  all  the   life   expectancy
19        certifications obtained by the provider in the process of
20        determining the price paid to the viator.
21             (2)  A  statement  of  whether  premium  payments or
22        other costs related to the policy have been escrowed.  If
23        escrowed, a statement of the date upon which the escrowed
24        funds  will be depleted and whether the purchaser will be
25        responsible for payment of premiums  thereafter  and,  if
26        so, the amount of the premiums.
27             (3)  A  statement  of  whether  premium  payments or
28        other costs related to the policy have  been  waived.  If
29        waived,  a  disclosure  of  whether  the investor will be
30        responsible for payment of the premiums  if  the  insurer
31        that   wrote  the  policy  terminates  the  waiver  after
32        purchase and the amount of those premiums.
33             (4)  A disclosure of the type of policy  offered  or
34        sold,  i.e.,  whole life, term life, universal life, or a
 
                            -21-     LRB093 09241 JLS 09474 b
 1        group  policy  certificate,   any   additional   benefits
 2        contained  in  the  policy, and the current status of the
 3        policy.
 4             (5)  If the policy is term insurance,  a  disclosure
 5        of  the  special  risks  associated  with  term insurance
 6        including,  but   not   limited   to,   the   purchaser's
 7        responsibility  for  additional  premiums  if  the viator
 8        continues the term policy at the end of the current term.
 9             (6)  A  statement   of   whether   the   policy   is
10        contestable.
11             (7)  A  statement  of whether the insurer that wrote
12        the  policy  has  any  additional   rights   that   could
13        negatively  affect  or  extinguish the purchaser's rights
14        under the viatical settlement contract, what these rights
15        are,  and  under  what  conditions   these   rights   are
16        activated.
17             (8)  A  statement  of  the  name  and address of the
18        person responsible for monitoring the insured's condition
19        and a description of how  often  the  monitoring  of  the
20        insured's  condition  is  done,  how the date of death is
21        determined, and how and when  this  information  will  be
22        transmitted to the purchaser.
23        (l)  The   viatical   settlement  purchase  agreement  is
24    voidable by the purchaser at any time within 3 days after the
25    disclosures mandated by  subsections  (j)  and  (k)  of  this
26    Section are received by the purchaser.
27        (m) (d)  The  Director  may  promulgate  a rule to assure
28    adequate disclosure is given to all potential viators.
29    (Source: P.A. 89-484, eff. 6-21-96.)

30        (215 ILCS 158/40)
31        Sec. 40.  Assignment or resale of viaticated policies.  A
32    viatical settlement provider may not sell, assign,  transfer,
33    or  pledge  a  viaticated  policy  except to another licensed
 
                            -22-     LRB093 09241 JLS 09474 b
 1    viatical settlement provider or a person not required  to  be
 2    licensed  under  Section 10. An insurance company licensed in
 3    this  State  shall  not  accept  the  assignment  of  a  life
 4    insurance  policy  insuring  an  Illinois  resident  from   a
 5    viatical  settlement  provider not licensed in this State and
 6    shall immediately notify the Director of any  such  attempted
 7    transaction.
 8    (Source: P.A. 89-484, eff. 6-21-96.)

 9        (215 ILCS 158/45)
10        Sec. 45.  General rules.
11        (a)  A  viatical  settlement  provider  entering  into  a
12    viatical settlement contract shall first obtain:
13             (1)  if   the  viator  is  the  insured,  a  written
14        statement from a licensed attending  physician  that  the
15        viator  is of sound mind and under no constraint or undue
16        influence to enter into a viatical settlement contract;
17             (2)  a document in which the insured consents to the
18        release of his or  her  medical  records  to  a  viatical
19        settlement  provider, viatical settlement broker, and the
20        insurance company that issued the life  insurance  policy
21        covering  the  life of the insured; A viatical settlement
22        provider entering into  a  viatical  settlement  contract
23        with  a  person  with  a catastrophic or life threatening
24        illness or condition shall first obtain:
25             (1)  a written statement from a  licensed  attending
26        physician  that  the person is of sound mind and under no
27        constraint or undue influence; and
28             (3) (2)  a witnessed document in  which  the  person
29        consents    to    the   viatical   settlement   contract,
30        acknowledges  the  catastrophic   or   life   threatening
31        illness,  represents  that  he  or  she  has  a  full and
32        complete  understanding  of   the   viatical   settlement
33        contract,  that  he  or  she  has  a  full  and  complete
 
                            -23-     LRB093 09241 JLS 09474 b
 1        understanding  of  the  benefits  of  the  life insurance
 2        policy,  releases  his  or  her  medical   records,   and
 3        acknowledges that he or she has entered into the viatical
 4        settlement contract freely and voluntarily; and.
 5             (4) (b)  All   medical   information   solicited  or
 6        obtained by a licensee shall be subject to the applicable
 7        provision of State law  relating  to  confidentiality  of
 8        medical information.
 9        (b)  Within  20  days  after  a viator executes documents
10    necessary to transfer any rights under an insurance policy or
11    within 20 days after entering any agreement, option, promise,
12    or any other form of understanding, expressed or implied,  to
13    viaticate  the policy, the viatical settlement provider shall
14    give written notice to the insurer that issued that insurance
15    policy that the  policy  has  or  will  become  a  viaticated
16    policy.  The  notice  shall  be  accompanied by the documents
17    required by item (3) of subsection (a).
18        (c)  The viatical provider shall deliver a  copy  of  the
19    medical  release required under item (2) of subsection (a), a
20    copy of the viator's application for the viatical  settlement
21    contract,  and  a request for verification of coverage to the
22    insurer that issued the life policy that is  the  subject  of
23    the viatical transaction.
24        (d)  The   insurer   shall   respond  to  a  request  for
25    verification of coverage submitted on an approved form  by  a
26    viatical  settlement  provider  within 30 calendar days after
27    the date the request is received and shall indicate  whether,
28    based  on  the  medical  evidence and documents provided, the
29    insurer intends to  pursue  an  investigation  at  this  time
30    regarding the validity of the insurance contract.
31        (e)  If  a viatical settlement broker performs any of the
32    activities required of the viatical settlement provider,  the
33    provider is deemed to have fulfilled the requirements of this
34    Section.
 
                            -24-     LRB093 09241 JLS 09474 b
 1        (f)  The  purchaser  shall  have  the  right to rescind a
 2    viatical  settlement  contract  within  3  days   after   the
 3    disclosures mandated under subsections (j) and (k) of Section
 4    35 are received by the purchaser.
 5        (g)  Contacts   with  the  insured  for  the  purpose  of
 6    determining the health status of the insured by the  viatical
 7    settlement  provider  or viatical settlement broker after the
 8    viatical settlement has occurred shall  only  be  made  by  a
 9    viatical  settlement  provider  or viatical settlement broker
10    licensed in this State or its authorized representatives  and
11    shall  be  limited to once every 3 months for insureds with a
12    life expectancy of more than one year and  to  no  more  than
13    once  per  month  for  insureds with a life expectancy of one
14    year or less. The viatical settlement  provider  or  viatical
15    settlement  broker  shall  explain  the  procedure  for these
16    contacts at the time  the  viatical  settlement  contract  is
17    entered  into.  The  limitations set forth in this subsection
18    shall not apply to any contacts with an insured  for  reasons
19    other  than determining the insured's health status. Viatical
20    settlement providers and viatical settlement brokers shall be
21    responsible   for   the   actions   of    their    authorized
22    representatives.
23        (h) (c)  All  viatical  settlement contracts entered into
24    in this State shall provide the viator with an  unconditional
25    right  to  rescind the contract for at least 30 days from the
26    date the contract is executed or 15 days from the receipt  of
27    the  viatical  settlement proceeds, whichever is less. If the
28    insured dies during such  rescission  periods,  the  contract
29    shall  be  deemed to have been rescinded subject, however, to
30    repayment to the viatical settlement provider of any viatical
31    settlement payments.
32        (i)  The viatical settlement provider shall instruct  the
33    viator  to send the executed documents required to effect the
34    change in ownership, assignment,  or  change  in  beneficiary
 
                            -25-     LRB093 09241 JLS 09474 b
 1    directly  to  the independent escrow agent. Within 3 business
 2    days after the date the escrow agent  receives  the  document
 3    (or  from  the date the viatical settlement provider receives
 4    the  documents,  if  the  viator  erroneously  provides   the
 5    documents  directly  to the provider), the provider shall pay
 6    or transfer the proceeds of the viatical settlement  into  an
 7    escrow   or   trust   account   maintained   in  a  state  or
 8    federally-chartered financial institution whose deposits  are
 9    insured  by the Federal Deposit Insurance Corporation (FDIC).
10    Upon payment of  the  settlement  proceeds  into  the  escrow
11    account,  the  escrow agent shall deliver the original change
12    in  ownership,  assignment,  or  beneficiary  forms  to   the
13    viatical  settlement provider or related provider trust. Upon
14    the escrow agent's  receipt  of  the  acknowledgment  of  the
15    properly  completed  transfer  of  ownership,  assignment, or
16    designation of beneficiary from the  insurance  company,  the
17    escrow agent shall pay the settlement proceeds to the viator.
18        (j)  Failure  to  tender  consideration to the viator for
19    the viatical settlement contract within  the  time  disclosed
20    pursuant  to item (6) of subsection (a) of Section 35 renders
21    the viatical settlement contract voidable by the  viator  for
22    lack   of  consideration  until  the  time  consideration  is
23    tendered to and accepted by the viator.
24        (d)  Immediately  upon  receipt  from   the   viator   of
25    documents to effect the transfer of the insurance policy, the
26    viatical settlement provider shall pay the entire proceeds of
27    the  settlement into an escrow or trust account managed by an
28    escrow agent or trustee in a  state  or  federally  chartered
29    financial institution that is a member of the Federal Reserve
30    System  pending  acknowledgment of the transfer by the issuer
31    of the policy.  The trustee or escrow agent shall be required
32    to transfer the proceeds due to the viator  immediately  upon
33    receipt of acknowledgment of the transfer from the insurer.
34        (e)  Failure  to  tender  the  viatical settlement by the
 
                            -26-     LRB093 09241 JLS 09474 b
 1    date disclosed to the viator renders the contract a nullity.
 2        (k) (f)  A viatical settlement agent may  not  receive  a
 3    fee,  commission,  or other valuable consideration for his or
 4    her  services  involving   unlicensed   viatical   settlement
 5    providers with respect to (1) viatical settlements or (2) the
 6    assignment or resale of viaticated policies.
 7        (l) (g)  A  viatical  settlement  provider  may not pay a
 8    person not appointed as an agent by that  provider  any  fee,
 9    commission,  or  other  valuable consideration for his or her
10    services with respect to (1) viatical settlements or (2)  the
11    assignment or resale of viaticated policies.
12        (m) (h)  A   viatical  settlement  provider  or  viatical
13    settlement agent shall not pay or offer to pay  any  referral
14    or   finder's  fee,  commission,  or  other  compensation  to
15    viator's physician, attorney, or accountant.
16        (n) (i)  A viatical settlement agent may not receive  any
17    compensation from a prospective viator or a viator.
18        (o) (j)  If  the  viator rescinds the viatical settlement
19    contract, the viatical settlement provider shall  notify  the
20    issuer   of  the  insurance  policy  of  the  recision.   The
21    notification  shall  be  made  by  the  viatical   settlement
22    provider to the issuer of the insurance policy within 20 days
23    from  the  date the viatical settlement provider receives the
24    recision request from the viator.
25    (Source: P.A. 89-484, eff. 6-21-96.)

26        (215 ILCS 158/47 new)
27        Sec. 47.  Prohibited practices.
28        (a)  It is a violation of this  Act  for  any  person  to
29    enter  into  a  viatical  settlement contract within a 2-year
30    period commencing with the date of issuance of the  insurance
31    policy  or  certificate  unless  the  viator certifies to the
32    viatical  settlement  provider  that  one  or  more  of   the
33    following conditions have been met within the 2-year period:
 
                            -27-     LRB093 09241 JLS 09474 b
 1             (1)  The   policy   was  issued  upon  the  viator's
 2        exercise of conversion rights arising out of a  group  or
 3        individual policy, provided the total of the time covered
 4        under  the  conversion policy plus the time covered under
 5        the prior policy is at least 24 months. The time  covered
 6        under  a  group policy shall be calculated without regard
 7        to  any  change  in  insurance  carriers,  provided   the
 8        coverage  has  been  continuous  and under the same group
 9        sponsorship.
10             (2)  The viator is a charitable organization  exempt
11        from taxation under 26 U.S.C. Sec. 501 (c)(3).
12             (3)  The viator is not a natural person.
13             (4)  The  viator submits independent evidence to the
14        viatical settlement provider that  one  or  more  of  the
15        following  conditions  have  been  met  within the 2-year
16        period:
17                  (A)  the viator or  insured  is  terminally  or
18             chronically ill;
19                  (B)  the viator's spouse dies;
20                  (C)  the viator divorces his or her spouse;
21                  (D)  the    viator   retires   from   full-time
22             employment;
23                  (E)  the viator becomes physically or  mentally
24             disabled   and   a  physician  determines  that  the
25             disability  prevents  the  viator  from  maintaining
26             full-time employment;
27                  (F)  the viator was the insured's  employer  at
28             the  time  the  policy or certificate was issued and
29             the employment relationship terminated; or
30                  (G)  a final  order,  judgment,  or  decree  is
31             entered by a court of competent jurisdiction, on the
32             application   of   a   creditor   of   the   viator,
33             adjudicating  the  viator  bankrupt or insolvent, or
34             approving a petition seeking reorganization  of  the
 
                            -28-     LRB093 09241 JLS 09474 b
 1             viator   or   appointing  a  receiver,  trustee,  or
 2             liquidator to all  or  a  substantial  part  of  the
 3             viator's assets.
 4        (b)  Copies of the independent evidence described in item
 5    (4)  of  subsection  (a) and documents required by subsection
 6    (a) of Section 35 shall be submitted to the insurer when  the
 7    viatical settlement provider submits a request to the insurer
 8    for verification of coverage. The copies shall be accompanied
 9    by  a  letter  of  attestation  from  the viatical settlement
10    provider that the copies are true and correct copies  of  the
11    documents received by the viatical settlement provider.
12        (c)  If  the  viatical settlement provider submits to the
13    insurer a  copy  of  the  owner  or  insured's  certification
14    described  in  subsection (k) of Section 35 when the provider
15    submits a request to the insurer to effect  the  transfer  of
16    the   policy   or  certificate  to  the  viatical  settlement
17    provider, the copy shall be deemed to conclusively  establish
18    that   the   viatical   settlement   contract  satisfies  the
19    requirements of this Section and  the  insurer  shall  timely
20    respond to the request.

21        (215 ILCS 158/49 new)
22        Sec. 49.  Unfair trade practices. A violation of this Act
23    shall be considered an unfair trade practice under Article IX
24    of  the  Illinois  Insurance  Code  subject  to the penalties
25    contained in that Code.

26        (215 ILCS 158/50)
27        Sec. 50.  Authority to promulgate standards. The Director
28    shall have the authority to do all the following:
29        (1)  Issue rules implementing this Act.
30        (2)  Establish standards for evaluating reasonableness of
31    payments under viatical settlement contracts for persons  who
32    are  terminally or chronically ill.  This authority includes,
 
                            -29-     LRB093 09241 JLS 09474 b
 1    but is not limited to, regulation of discount rates  used  to
 2    determine   the  amount  paid  in  exchange  for  assignment,
 3    transfer, sale, devise, or bequest of a benefit under a  life
 4    insurance policy.
 5        (3)  Establish   licensing   requirements  and  fees  for
 6    viatical settlement providers and viatical settlement agents.
 7        (4)  Establish standards for solicitation and  disclosure
 8    including,  but  not  limited  to,  regulation  of disclosure
 9    requirements and advertising.
10        (5)  Establish  standards  for  examination  of  viatical
11    settlement providers and viatical settlement agents.
12        (6)  Require a bond  or  other  mechanism  for  financial
13    accountability for viatical settlement providers.
14        (7)  Adopt   rules   governing   the   relationship   and
15    responsibilities  of  both  insurers  and viatical settlement
16    providers (and viatical settlement investment agents)  during
17    the viatication of a life insurance policy or certificate.
18    (Source: P.A. 89-484, eff. 6-21-96.)