Delaware State Guidelines

Related Resource Links

CURRENT LEGISLATION

REGULATORY FORMS:

• • Broker Viatical Settlement Licensing Checklist
  • Provider Viatical Settlement Licensing Checklist

Relevant State Departments of Insurance Contact Info

Delaware Department of Insurance
1351 West North Street
Suite 101
Dover, Delaware 19904

Visit Website

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

WHAT DOES THE STATE DEFINE AS CONTESTABLE?: 2 YEARS

WHAT IS THE REQUIRED HOLDING PERIOD?: 5 YEARS. See: 18 Del.C. § 7511(a).

WHEN DOES LICENSE NEED TO BE RENEWED?: 18 Del.C. § 7503(e). Licenses may be renewed from year to year on the
anniversary date upon payment of the annual renewal fees specified in § 701(30) of this title. Failure to pay the fees by
the renewal date results in expiration of the license.

IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: 18 Del.C. § 7508(c)(4) and (5).

IS THERE A MINIMUM PAYMENT REQUIREMENT?: NOT CURRENTLY. Regulations have not been developed by the
Delaware Department of Insurance, but commissioner holds authority to establish minimum payment standards under
18 Del.C. § 7516(2).

WHEN DOES THE MONEY NEED TO BE IN ESCROW?: 18 Del.C. § 7510(d) The viatical settlement provider shall instruct
the viator to send the executed documents required to effect the change in ownership, assignment or change in
beneficiary directly to the independent escrow agent. Within 3 business days after the date the escrow agent receives
the document (or from the date the viatical settlement provider receives the documents, if the viator erroneously
provides the documents directly to the provider), the provider must pay or transfer the proceeds of the viatical
settlement into an escrow or trust account maintained in a state or federally-chartered financial institution whose
deposits are insured by the Federal Deposit Insurance Corporation (FDIC). Upon payment of the settlement proceeds
into the escrow account, the escrow agent shall deliver the original change in ownership, assignment or change in
beneficiary forms to the viatical settlement provider or related provider trust or other designated representative of the
viatical settlement provider. Upon the escrow agent’s receipt of the acknowledgment of the properly completed transfer
of ownership, assignment or designation of beneficiary from the insurance company, the escrow agent shall pay the
settlement proceeds to the viator.

IS THERE A NOTICE REQUIREMENT TO THE INSURED AFTER THE SALE?: YES. 18 Del.C. § 7508(d) If the viatical
settlement provider transfers ownership or changes the beneficiary of the insurance policy, the provider shall
communicate in writing the change in ownership or beneficiary to the insured within 20 days after the change.

IS THERE A NOTICE REQUIREMENT TO THE CARRIER BEFORE/AFTER THE SALE?: YES. 18 Del.C. § 7510(a)(3) Within 20
days after a viator executes documents necessary to transfer any rights under an insurance policy or within 20 days of
entering any agreement, option, promise, or any other form of understanding, expressed or implied, to viaticate the
policy, the viatical settlement provider shall give written notice to the insurer that issued that insurance policy that the
policy has or will become a viaticated policy. The notice must be accompanied by the documents required by this
subsection.

WHAT IS THE RESCISSION PERIOD?: 18 Del.C. § 7508(a)(6) The viator has the right to rescind a viatical settlement
contract before the earlier of 60 calendar days after the date upon which the viatical settlement contract is executed by
all parties or 30 calendar days after the viatical settlement proceeds have been paid to the viator, as provided in §
7510(f) of this Act. Rescission, if exercised by the viator, is effective only if both notice of the rescission is given, and the
viator repays all proceeds and any premiums, loans and loan interest paid on account of the viatical settlement within
the rescission period. If the insured dies during the rescission period, the viatical settlement contract is deemed to have
been rescinded, subject to repayment by the viator or the viator’s estate of all viatical settlement proceeds and any
premiums, loans and loan interest the viatical settlement within 60 days of the insured’s death.

IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – NAIC or OWN – State Approved. See: 18 Del.C. §
7510(a)(4).