Nevada State Guidelines

Related Resource Links

• Legislation:

https://www.leg.state.nv.us/nrs/NRS-688C.html

• Regulatory Guidance:

Annual Reporting – Brokers

Annual Reporting – Providers

Relevant State Departments of Insurance Contact Info

Nevada Division of Insurance –

Carson City office:
1818 E. College Pkwy, Suite 103
Carson City, NV  89706

Las Vegas office:
3300 W. Sahara Ave., Suite 275
Las Vegas, NV 89102

Division of Insurance toll-free: (888) 872-3234

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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: Nev. Rev. Stat. Ann. § 688C.270(1).

WHEN DOES LICENSE NEED TO BE RENEWED?: Nev. Rev. Stat. Ann. § 688C.190(2). Application for a license must be made to the Commissioner on a form prescribed by the Commissioner, accompanied by all applicable fees. A license may be renewed from year to year on its anniversary by payment of all applicable fees. The license expires if all applicable fees are not paid by that date.

IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: Nev. Rev. Stat. Ann. § 688C.260(10).

IS THERE A MINIMUM PAYMENT REQUIREMENT?: YES. See: Nev. Rev. Stat. Ann. § 688C.150. Payment to viator: Minimum amount if insured is chronically ill or terminally ill; unjust or unreasonable amount. (NRS 679B.130, 688C.170).

1. If an insured is chronically ill or terminally ill, the minimum amount that may be paid to a viator under a viatical settlement is:
(a) If the life expectancy of the insured is less than 6 months, 80 percent of the net death benefit.
(b) If the life expectancy of the insured is at least 6 months but less than 12 months, 70 percent of the net death benefit.
(c) If the life expectancy of the insured is at least 12 months but less than 18 months, 65 percent of the net death benefit.
(d) If the life expectancy of the insured is at least 18 months but less than 25 months, 60 percent of the net death benefit.
(e) If the life expectancy of the insured is 25 months or more, an amount equal to the greater of: (1) The cash surrender value of the policy at the time the viator enters into the viatical settlement; or (2) The accelerated death benefit of the policy at the time the viator enters into the viatical settlement.

2. In addition to the requirements pursuant to subsection 1 regarding the minimum amount that may be paid to a viator pursuant to a viatical settlement, a viatical settlement must not provide for a payment to a viator of an amount that is unjust or unreasonable.

3. To determine if a payment to a viator pursuant to a viatical settlement is unjust or unreasonable, the Commissioner will consider:
(a) The face value of the benefit of the policy being purchased;
(b) The value of any loan against the value of the benefit of the policy;
(c) The life expectancy of the insured at the time the viator enters into the viatical settlement;
(d) The age of the insured at the time the viator enters into the viatical settlement;
(e) The premiums that must be paid after the time the viator enters into the viatical settlement to maintain the policy;
(f) The cash surrender value or accelerated death benefit of the policy;
(g) The costs that directly relate to the acquisition of the policy;
(h) The payment of any commission, fee or other compensation paid to a broker for viatical settlements or to any other third party;
(i) Any payments of interest on any loans against the value of the benefit of the policy that must be made after the time the viator enters into the viatical settlement;
(j) The applicable rating by a rating service recognized by the insurance industry of the insurance company that issued the policy at the time the viator enters into the viatical settlement;
(k) The prevailing rates of discount for viatical settlements in this State or, if insufficient data exists to determine the prevailing rates of discount in this State, the national prevailing rates of discount or the prevailing rates of discount for any other state that maintains data on the prevailing rates of discount for viatical settlements;
(l) Whether the policy is within the contestable period; and
(m) Any other charges or fees directly or indirectly related to the viatical settlement.

WHEN DOES THE MONEY NEED TO BE IN ESCROW?: Nev. Rev. Stat. Ann. § 688C.290(1). A provider of viatical settlements shall instruct the viator to send the executed documents required to effect the change in ownership or assignment or change of beneficiary of the affected policy to a designated independent escrow agent. Within 3 business days after the date the escrow agent receives the documents, or within 3 business days after the provider receives the documents if by mistake they are sent directly to the provider, the escrow agent shall deposit the proceeds of the settlement into an escrow or trust account maintained in a regulated financial institution whose deposits are insured by the Federal Deposit Insurance Corporation.

IS THERE A NOTICE REQUIREMENT TO THE INSURED AFTER THE SALE?: YES. Nev. Rev. Stat. Ann. § 688C.330. If a provider of viatical settlements transfers ownership or changes the beneficiary of a viaticated policy, the provider shall inform the insured of the transfer or change within 20 days after it occurs.

IS THERE A NOTICE REQUIREMENT TO THE CARRIER BEFORE/AFTER THE SALE?: YES. Nev. Rev. Stat. Ann. § 688C.280(2). Within 20 days after a viator executes documents necessary to transfer rights under a policy, or enters into an agreement in any form, express or implied, to viaticate the policy, the provider of viatical settlements shall give written notice to the issuer of the policy that the policy has or will become viaticated. The notice must be accompanied by:
(a) A copy of the release of medical records;
(b) The application for the viatical settlement; and
(c) A request for verification of coverage.

WHAT IS THE RESCISSION PERIOD?: Nev. Rev. Stat. Ann. § 688C.095 and § 688C.300). “Rescission period” means the shorter period of 60 days after the date on which a viatical settlement is signed by all parties thereto or 30 days after the viator receives the proceeds from that viatical settlement.
1. A viatical settlement entered into in this state must reserve to the viator an unconditional right to rescind the settlement within the rescission period. Rescission, if exercised by the viator, is effective only if the viator:
(a) Gives notice of the rescission to the provider or broker of viatical settlements; and
(b) Repays to the provider of viatical settlements all proceeds and any premiums, loans and loan interest paid on account of the viatical settlement or on behalf of the provider of viatical settlements, within the rescission period.

2. If the insured dies during the rescission period, the settlement is deemed rescinded and all proceeds and any premiums, loans and loan interest paid on account of the viatical settlement or on behalf of the provider of viatical settlements must be repaid to the provider of viatical settlements within 60 days after the death of the insured.

3. In the event of a rescission, if the provider of viatical settlements has paid commissions or other compensation to a broker of viatical settlements in connection with the rescinded transaction, the broker of viatical settlements shall refund all such commissions and compensation to the provider of viatical settlements within 5 business days following receipt of written demand from the provider of viatical settlements. The demand must be accompanied by:
(a) The viator’s notice of rescission, if the rescission was exercised by the viator; or
(b) Notice of the death of the insured, if the rescission was due to the death of the insured with-in the rescission period.

4. A purchaser of viatical settlements has the right to rescind an agreement to purchase a viatical settlement within 3 business days after the purchaser of viatical settlements receives the disclosures set forth in NRS 688C.262 and 688C.264.

IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – NAIC or OWN – State Approved. See: Nev. Rev. Stat. Ann. § 688C.210(1)(a).