Connecticut State Guidelines

Relevant State Departments of Insurance Contact Info

Connecticut Insurance Department
153 Market Street, 7th Floor
Hartford, Connecticut 06103

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Summary of the State:

    • Support
    • Oppose
    • Neutral
    • TBA
    • Summary Verbiage

TYPE OF LICENSE (LIFE SETTLEMENT/VIATICAL SETTLEMENT): LIFE SETTLEMENT

WHAT DOES THE STATE DEFINE AS CONTESTABLE?: 2 YEARS

WHAT IS THE REQUIRED HOLDING PERIOD?: 2 YEARS. See: Conn. Gen. Stat. Sec. 38a-465g(m).

WHEN DOES LICENSE NEED TO BE RENEWED?: Conn. Gen. Stat. Sec. 38a-465a(g)). Any license issued for a provider or
broker shall be in force only until the last day of March in each year, but may be renewed by the commissioner without
formality other than proper application.

IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: Conn. Gen. Stat. Sec. 38a-465f(a)(9).

IS THERE A MINIMUM PAYMENT REQUIREMENT?: YES. Conn. Gen. Stat. Sec. 38a-465-5. Evaluation standards for
reasonable payments.
(a) A broker or provider shall not enter into a life settlement contract that provides payment to the owner that is
unreasonable, unjust or inequitable. In determining whether a payment is unreasonable, unjust or inequitable, the
Commissioner may consider, among other factors, the life expectancy of the insured, the applicable rating of the
insurance company that issued the subject policy by a rating service generally recognized by the insurance industry,
regulators and consumer groups and the prevailing discount rates in the life settlement market in Connecticut, or if
sufficient data is unavailable for Connecticut, the prevailing discount rates nationally or in other states that maintain this
data; and
(b) A provider shall not use a longer life expectancy than is realistic in order to reduce the payout to which the owner is
entitled.

WHEN DOES THE MONEY NEED TO BE IN ESCROW?: Conn. Gen. Stat. Sec. 38a-465g(i). Not later than three business
days after the date the provider receives the documents from the owner to effect the transfer of the insurance policy,
the provider shall pay or transfer the proceeds of the settlement into an escrow or trust account managed by a trustee
or escrow agent in a state or federally-chartered financial institution whose deposits are insured by the Federal Deposit
Insurance Corporation. Not later than three business days after receiving acknowledgment of the transfer of the
insurance policy from the issuer of the policy, said trustee or escrow agent shall pay the settlement proceeds to the
owner.

IS THERE A NOTICE REQUIREMENT TO THE INSURED AFTER THE SALE?: NO

IS THERE A NOTICE REQUIREMENT TO THE CARRIER BEFORE/AFTER THE SALE?: YES. Conn. Gen. Stat. Sec. 38a-465g(f).
Not later than twenty days after an owner executes the life settlement contract, the provider shall give written notice to
the insurer that issued the policy that the policy has become subject to a life settlement contract. The notice shall be
accompanied by a copy of the medical records release required under subdivision (2) of subsection (a) of this section
and a copy of the insured’s application for the life settlement contract.

WHAT IS THE RESCISSION PERIOD?: Conn. Gen. Stat. Sec. 38a-465g(h). Each life settlement contract entered into in this
state shall provide that the owner may rescind the contract not later than fifteen days from the date it is executed by all
parties thereto. Such rescission exercised by the owner shall be effective only if both notice of rescission is given to the
provider and the owner repays all proceeds and any premiums, loans and loan interest paid by the provider within the
rescission period. A failure to provide written notice of the right of rescission shall toll the period of such right until thirty
days after the written notice of the right of rescission has been given. If the insured dies during the rescission period, the
contract shall be deemed to have been rescinded, subject to repayment by the owner or the owner’s estate of all and
any premiums, loans and loan interest to the provider.
IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – OWN – STATE APPROVED. Conn. Gen. Stat. Sec.
38a-465g(b). The insurer shall respond to a request for verification of coverage submitted by a provider, broker or life
insurance producer on a form approved by the commissioner not later than thirty calendar days after the date the
request was received. The insurer shall complete and issue the verification of coverage or indicate in which respects it is
unable to respond. In its response, the insurer shall indicate whether, based on the medical evidence and documents
provided, the insurer intends to pursue an investigation regarding the validity of the policy.

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