Related Resource Links
TYPE OF LICENSE: LIFE SETTLEMENT (USES VIATICAL TERMINOLOGY)
WHAT DOES THE STATE DEFINE AS CONTESTABLE?: 2 YEARS
WHAT IS THE REQUIRED HOLDING PERIOD?: 2 YEARS. See: § 215 ILCS 159/50(b).
WHEN DOES LICENSE NEED TO BE RENEWED?:§ 215 ILCS 159/10(i). Viatical settlement provider licenses may be
renewed from year to year on the anniversary date upon payment of the annual renewal fee of $1,500.
IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: § 215 ILCS 159/35(d)(4).
IS THERE A MINIMUM PAYMENT REQUIREMENT?: NO
WHEN DOES THE MONEY NEED TO BE IN ESCROW?: § 215 ILCS 159/45(j). 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 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 viatical settlement provider), the viatical settlement provider shall pay or transfer the gross amount paid by the viatical settlement purchaser to the escrow agent for deposit in a trust account and set up for that purpose by the escrow agent 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 or trust account, the escrow agent or trustee shall deliver the original change in ownership, assignment, or change in beneficiary forms to the viatical settlement provider, a representative of the viatical settlement provider, or related provider trust. 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. Funds shall be deemed sent by a viatical settlement provider to a viator as of the date that the escrow agent either releases the funds for wire transfer to the viator or places a check for delivery to the viator via United States Postal Service or other nationally recognized delivery service.
IS THERE A NOTICE REQUIREMENT TO THE INSURED AFTER THE SALE?: YES – § 215 ILCS 159/35(e). If the viatical settlement provider transfers ownership or changes the beneficiary of the insurance policy, then 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
BEFORE: § 215 ILCS 159/40. Disclosure to insurer
Sec. 40. Disclosure to insurer. Prior to the initiation of a plan, transaction, or series of transactions a viatical settlement broker or viatical settlement provider shall fully disclose to an insurer a plan, transaction, or series of transactions to which the viatical settlement broker or viatical settlement provider is a party to originate, renew, continue, or finance a life insurance policy with the insurer for the purpose of engaging in the business of viatical settlements at any time prior to or during the first 2 years after issuance of the policy. The viatical settlement provider, viatical settlement broker,
viator, or applicant for a policy shall, when requested, disclose that the prospective insured has undergone a life expectancy evaluation in connection with the issuance of a policy by a person or entity other than the insurer or its authorized representative. Any disclosure required under this Section must be made in writing.
AFTER: § 215 ILCS 159/45(b). Within 20 days after a viator executes documents necessary to transfer any rights under an insurance policy or within 20 days after entering any agreement, option, promise, or any other form of understanding, expressed or implied, to viaticate the policy, the viatical settlement pro-vider shall give written notice to the insurer that issued that insurance policy that the policy has or will become a viaticated policy. The notice shall be accompanied by the documents required by subsection (c) of this Section.
§ 215 ILCS 159/45(c). The viatical provider shall deliver a copy of the medical release required under paragraph (2) of subsection (a) of this Section, a copy of the viator’s application for the viatical settlement contract, the notice required under subsection (b) of this Section and a request for verification of coverage to the insurer that issued the life insurance policy that is the subject of the viatical settlement transaction. The viatical settlement provider shall use the NAIC’s form for verification of coverage unless another form is developed and approved by the Director.
WHAT IS THE RESCISSION PERIOD?: § 215 ILCS 159/45(h). All viatical settlement contracts entered into in this State shall provide the viator with an absolute right to rescind the contract before the earlier of 30 calendar days after the date upon which the viatical settlement contract is executed by all parties or 15 calendar days after the viatical settlement proceeds have been sent to the viator as provided in Section 45. Rescission by the viator may be conditioned upon the viator both giving notice and repaying to the viatical settlement provider within the rescission period all proceeds of the settlement and any premiums, loans and loan interest paid by or on behalf of the viatical settlement provider in connection with or as a consequence of the viatical settlement. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment to the viatical settlement provider or purchaser of all viatical settlement proceeds, and any premiums, loans, and loan interest that have been paid by the viatical settlement provider or viatical settlement purchaser, which shall be paid within 60 calendar days of the death of the insured. In the event of any rescission, if the viatical settlement provider has paid commissions or other compensation to a viatical settlement broker in connection with the rescinded transaction, the viatical settlement broker shall refund all such commissions and compensation to the viatical settlement provider within 5 business days following receipt of written demand from the viatical settlement provider, which demand shall be accompanied by either the viator’s notice of rescission if rescinded at the election of the viator, or notice of the death of the insured if rescinded by reason of the death of the insured within the applicable rescission period.
IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – NAIC or OWN – § 215 ILCS 159/45(c). The viatical settlement provider shall use the NAIC’s form for verification of coverage unless another form is developed and approved by the Director.
Stay Informed of Industry News
How to Help Your Client Choose a Life Settlement Provider
Many life insurance policy owners may wonder where to start when pursuing a life settlement provider. Selling a life insurance policy is an important decision…
Life Insurance Settlements: 5 Reasons Why Your Clients Need Life Settlements
Life insurance settlements are a great way for retirees to gain a bit of extra cash in times of need. They are generally a…