Nebraska State Guidelines

Related Resource Links

• Legislation:

https://nebraskalegislature.gov/laws/statutes.php?statute=44-1101

• Regulatory Guidance:

https://www.nebraska.gov/rules-and-regs/regsearch/Rules/Insurance_Dept_of/Title-210/Chapter-76.pdf

• Regulatory Form:

Licensing Information

Relevant State Departments of Insurance Contact Info

Nebraska Department of Insurance –
1526 K Street, Suite 200
Lincoln, NE  68508-2734
402-471-2201

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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?: 5 YEARS. See: R.R.S. Neb. § 44-1110(1).

WHEN DOES LICENSE NEED TO BE RENEWED?: N/A

IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: R.R.S. Neb § 44-1108(3)(d).

IS THERE A MINIMUM PAYMENT REQUIREMENT?: YES. See: NE Admin. Code § 210.76.005. Standards for Evaluation of Reasonable Payments for Terminally or Chronically Ill Insureds.

In order to assure that viators receive a reasonable return for viaticating an insurance policy, the return for viaticating a policy shall be no less than the following payouts for insureds who are terminally or chronically ill:

Insured’s Life Expectancy / Minimum Percentage of Face Value Less Outstanding Loans Received by Viator

• • • • 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%]

The percentage may be reduced by [5%] for viaticating a policy written by an insurer rated less than the highest [4] categories by A.M. Best, or a comparable rating by another rating agency.

WHEN DOES THE MONEY NEED TO BE IN ESCROW?: R.R.S. Neb § 44-1109(4). 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 three business days after the date the escrow agent receives the documents or after the date the viatical settlement provider receives the documents if the viator erroneously provides the documents directly to the provider, the provider shall pay or transfer the proceeds of the viatical settlement into an escrow or trust account maintained in a state-chartered or federally chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation. 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. R.R.S. Neb § 44-1108(4). 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 twenty days after the change.

IS THERE A NOTICE REQUIREMENT TO THE CARRIER BEFORE/AFTER THE SALE?: YES. R.R.S. Neb § 44-1109(1)(b). Within twenty days after a viator executes documents necessary to transfer any rights un-der an insurance policy, or within twenty days after entering any agreement, option, promise, or 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 subdivision (c) of this subsection.

WHAT IS THE RESCISSION PERIOD?: R.R.S. Neb § 44-1109(3). 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 sixty calendar days after the date on which the viatical settlement contract is executed by all parties or thirty calendar days after the viatical settlement proceeds have been sent to the viator as provided in  subsection (5) of this section. Rescission by the viator may be conditioned on 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. If a viatical settlement contract is rescinded, all viatical settlement proceeds and any premiums, loans, and loan interest that have been paid by the viatical settlement provider or purchaser shall be repaid to the viatical settlement provider or purchaser within sixty days of such rescission. 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 five business days following receipt of a 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 death of the insured within the applicable rescission period.

IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – NAIC or OWN – State Approved. See: R.R.S. Neb § 44-1109(1)(c).