Indiana State Guidelines

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Indiana Department of Insurance
311 West Washington Street, Suite 103
Indianapolis, Indiana 46204-2787

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TYPE OF LICENSE: LIFE SETTLEMENT (USES VIATICAL TERMINOLOGY)

WHAT DOES THE STATE DEFINE AS CONTESTABLE?: 2 YEARS

WHAT IS THE REQUIRED HOLDING PERIOD?: N/A

WHEN DOES LICENSE NEED TO BE RENEWED?:Ind. Code. Ann. § 27-8-19.8-15. A license issued or renewed under this chapter expires on July 1 after its issuance or renewal.

IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. Ind. Code. Ann. § 27-8-19.8-23(d).

IS THERE A MINIMUM PAYMENT REQUIREMENT?: YES. 760 IAC 1-61-9. Standards for evaluation of reasonable payments.

(a) A viatical settlement provider shall not enter into a viatical settlement that provides a payment to the viator that is unreasonable or unjust. In determining whether a payment is unreasonable or unjust, the commissioner may consider relevant factors, including any of the following:
(1) The life expectancy of the viator.
(2) The applicable rating by a rating service generally recognized in the insurance industry, regulators, and consumer groups of the insurance company that issued the viaticated policy.
(3) The prevailing discount rates in the viatical settlement market in this state, or, if insufficient data is available for Indiana, the prevailing rates nationally or in other states that maintain this data.
(b) A viatical settlement provider shall prepare and maintain a pricing memorandum providing a description of the method and assumptions used in determining the value to be paid to viators. The memorandum shall include a description, which may use reasonable ranges, of the following:
(1) The procedure used to determine the insured’s life expectancy, including medical, evaluation and use of health care professionals in such evaluation.
(2) The portion of the discount (difference between the death benefit of the viaticated policy or certificate and the proceeds paid by the viatical settlement provider to the viator) due to market value interest rate (current value of money) and how this interest rate is determined.
(3) The portion of the discount due to agent or broker compensation paid by the viatical settlement provider.
(4) The portion of the discount that is the viatical settlement provider’s operating costs in connection with viatical settlement contracts, including acquisition and maintenance cost and risk charge.
(5) The portion of the discount due to other overhead costs and profit margin.
(6) The effect, if any, that policy loans, surrender charges, and the net cash surrender value in the insurance plan have on the pricing determination.
(7) How provision is made in the settlement determination for future insurance policy premiums, dividends, or excess amounts, if any.
(8) What provisions, if any, is made in the settlement determination for supplemental insurance benefits or riders.

WHEN DOES THE MONEY NEED TO BE IN ESCROW?: Ind. Code. Ann. § 27-8-19.8-24.2.

(a) Immediately upon a viatical settlement provider’s receipt of a signed viatical settlement contract, the viatical settlement provider shall pay the proceeds of the viatical settlement to a trust or escrow account in a state or federally chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation. The account shall be managed by a trustee or escrow agent independent of the parties to the contract.
(b) Within two (2) business days after the viatical settlement provider’s receipt of the insurer’s or group administrator’s acknowledgment that ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated according to the viatical settlement contract, the trustee or escrow agent shall transfer the proceeds to the viator.

IS THERE A NOTICE REQUIREMENT TO THE INSURED AFTER THE SALE?: YES – Ind. Code. Ann. § 27-8-19.8-23(e). If a viatical settlement provider transfers ownership or changes the beneficiary of a viaticated policy, the viatical settlement provider shall, not more than twenty (20) days after the transfer or change occurs, inform the insured of the transfer or change.

IS THERE A NOTICE REQUIREMENT TO THE CARRIER BEFORE/AFTER THE SALE?: NO

WHAT IS THE RESCISSION PERIOD?: Ind. Code. Ann. § 27-8-19.8-21(b). A viatical settlement contract must provide for
the unconditional rescission of the contract by the viator for the longer of the following:
(1) the period ending not more than fifteen (15) days after the receipt of the viatical settlement proceeds by the viator;
or
(2) the period ending not more than thirty (30) days after execution of the contract.

IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – STATE or OWN – YES – Indiana has a statedeveloped VOC Form OR (b) A life insurance company and a viatical settlement provider, broker, or agent may use a verification of coverage form different from the form set forth in section 12(a) or 12(b) of this rule (760 IAC 1-61-12) if the alternative form has been mutually agreed upon in writing prior to the submission of the request for verification of coverage. See: 760 IAC 1-61-11.