N.Y. Comp. Codes R. & Regs. tit. 11 § 380.8

Current through Register Vol. 46, No. 53, December 31, 2024

Section 380.8 - Disclosure

(a) The viatical settlement company shall deliver an information booklet to every applicant, and delivery of the booklet must be acknowledged by the applicant in the application form. The information booklet must include the following:

(1) how viatical settlements operate;

(2) possible alternatives to viatical settlements for persons with catastrophic or life-threatening illnesses, including, but not limited to, accelerated death benefits offered by the issuer of the life insurance policy or certificate and loans secured by the life insurance policy or certificate;

(3) tax consequences that may result from entering into a viatical settlement;

(4) consequences of interruption or loss of assistance as provided by medical or public assistance programs;

(5) the viator's right to rescind a viatical settlement within 15 days of receipt of the viatical settlement proceeds;

(6) the identity of any person who will receive any fee or compensation from the viatical settlement company with respect to the viatical settlement and the amount and terms of such compensation; and

(7) the viatical settlement company's complete name and main office address.

(b) The company shall disclose to the applicant, either on the application or through the information booklet, that the proceeds payable to the viator may not be exempt from the viator's creditors, personal representatives, trustees in bankruptcy and receivers in State and Federal courts.

(c) The company shall disclose to the applicant, either on the application or through the information booklet, that the payment of proceeds pursuant to a viatical settlement will be made in a lump sum. The disclosure shall state that installment payments are not permissible unless the viatical settlement company is a licensed insurance company or bank or the viatical settlement company has effected the purchase of an annuity or similar financial instrument issued by a licensed insurance company or bank.

(d) The company shall disclose on the application or through the information booklet that medical, financial or other personal information obtained from the viator will not be disclosed to any other person or entity without the viator's specific written consent.

(e) The company shall disclose on the application or through the information booklet the procedures available concerning the payment of death benefit proceeds for any insured other than the viator or for the payment of accidental death proceeds.

(f) The viatical settlement company, upon receipt of an application to viaticate and after determining the value to be offered in return for the assignment, transfer, sale, devise or bequest of the death benefit or ownership of a life insurance policy or certificate to the viatical settlement company, shall deliver a proposal to the applicant before the agreement is required to be signed. The proposal shall disclose the following information:

(1) insurance contract death benefit in each of the next 10 years if the insurance contract is not viaticated............________

(2) amount of death benefit to be viaticated............ ________

(3) policy cash value before deducting any loan ............________

(4) policy net cash value after deducting any loan ............________

(5) policy death benefit less net cash value............ ________

(6) amount offered to applicant............ ________

(7) whether any supplemental benefit(s), including but not limited to the following benefits, will be continued and, if so, the source of premium payment and the beneficiary of the proceeds of such supplemental benefit(s):

(i) accidental death benefit............ ________

(ii) disability income............ ________

(iii) waiver of premium or of monthly deduction waiver ............________

(iv) guaranteed insurability options............ ________

(v) children or spouse coverage............________

(8) name of insurer

(9) whether insurer does or does not have an accelerated death benefit program subject to qualification of applicant

________ Does ________ Does Not

(10) if insurer does have an accelerated death benefit program:

(i) all must be accelerated............________Yes ________No

(ii) applicant may accelerate all or a portion............________Yes ________ No

(iii) applicant may not accelerate all but only a portion ............________ Yes ________No

(g) The proposal shall include a notice stating that a detailed description of how the payment amount was determined, including interest rate, expense factors, and the assumed life expectancy used in such determination may be obtained by written request made to the viatical settlement company.

(h) Upon written request by the applicant for a detailed description of how the payment amount was determined, the viatical settlement company shall provide a detailed description stating the assumed life expectancy in months, the interest rate used to discount the amount at risk, the adjustments, if any, for future premiums, dividends and additional amounts, broker's compensation, and retention for other expenses, risk charge and profit.

(i) The broker shall provide a written statement to the applicant prior to completion of any application to viaticate describing the manner in which the broker will be compensated.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 380.8