Montana State Guidelines

Related Resource Links

• Legislation:

https://leg.mt.gov/bills/mca/title_0330/chapter_0200/part_0130/sections_index.html

• Regulatory Guidance:

http://www.mtrules.org/gateway/ruleno.asp?RN=6%2E6%2E8502

• Regulatory Forms:

Viatical Settlement Provider Application

Annual Report

Relevant State Departments of Insurance Contact Info

Office of the Montana State Auditor, Commissioner of Securities and Insurance –
840 Helena Ave.
Helena, MT  59601
(800) 332-6148 or (406) 444-2040

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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?: 2 YEARS. See: MCA § 33-20-1313(1).

WHEN DOES LICENSE NEED TO BE RENEWED?: MCA § 33-20-1305. A license issued under this part expires on its expiration date unless it is renewed on or before its expiration date.

Unless the commissioner designates another date, a license expires on the last day of the month in which the second anniversary of the initial issuance date of the license occurs and on the last day of the month of the second anniversary following each renewal.

IS BROKER COMPENSATION DISCLOSURE REQUIRED?: NO

IS THERE A MINIMUM PAYMENT REQUIREMENT?: YES. See: Mont. Admin. R. 6.6.8507. Standards for Evaluation of Reasonable Payments.

(1) In order to assure that viators receive a reasonable return for viaticating an insurance policy, the following shall be minimum discounts when the insured is terminally ill:

Insured’s Life  / Expectancy Minimum Percentage of Net Death Benefit

• • • • • Less than 6 months / 80%
        • At least 6 but less than 12 months / 70%
        • At least 12 but less than 18 months / 65%
        • At least 18 but no greater than 24 months / 60%
        • 24 months or more / 50%

(2) If the insured is not terminally ill or chronically ill, the viator must receive at least the greater of the cash surrender value or accelerated death benefit of the policy.
(3) If the insured is chronically ill but not terminally ill, the viator must receive at least 30% of the net death benefit.
(4) Except where the cash surrender value or accelerated death benefit is paid, the percentage may be reduced by 5% for viaticating a policy for which the insurer of the policy has an A.M. Best rating that is at or below a marginal rating.

WHEN DOES THE MONEY NEED TO BE IN ESCROW?: MCA § 33-20-1314. Within 3 business days after receipt of documents from the policyholder or certificate holder effecting the transfer of the insurance policy or certificate, the viatical settlement provider shall pay the proceeds of the settlement to an escrow or trust account managed by a trustee or escrow agent in a bank approved by the commissioner, pending acknowledgment of the transfer by the issuer of the life insurance policy. The trustee or escrow agent shall transfer the proceeds due to the policyholder or certificate holder immediately upon receipt of acknowledgment of the transfer from the insurer.

A viatical settlement provider shall make payment of the proceeds of a viatical settlement contract in a lump sum except as provided in this subsection. A viatical settlement provider may not retain any portion of the proceeds. A viatical settlement provider may make installment payments only if the viatical settlement provider has purchased an annuity issued by an authorized insurer or a similar financial instrument issued by a financial institution authorized to engage in the business of a financial institution in this state.

Failure by the viatical settlement provider to tender the viatical settlement by the date dis-closed to the policyholder or certificate holder renders the contract void.

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

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

WHAT IS THE RESCISSION PERIOD?: MCA § 33-20-1308(3). Each viatical settlement contract entered into in this state must contain a provision enabling the policyholder or certificate holder to rescind the contract not later than the 30th day after the date on which the contract is executed by all parties or not later than the 15th day after the policyholder or certificate holder receives the viatical settlement proceeds, whichever is the longer period. In order to rescind a contract, a policyholder or certificate holder who has received the proceeds shall return them to the viatical settlement provider or financing entity.

IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – OWN – State Approved. See: Mont. Admin. R.6.6.8512(2).