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: ORC Ann. § 3916.16(B).
WHEN DOES LICENSE NEED TO BE RENEWED?:ORC Ann. § 3916.03(F). Except as otherwise provided in this division, a
license as a viatical settlement provider or viatical settlement broker expires on the last day of March next after its
issuance or continuance. A license as a viatical settlement provider or viatical settlement broker may, in the discretion of
the superintendent and the payment of an annual renewal fee established by the superintendent by rule adopted in
accordance with Chapter 119. of the Revised Code, be continued past the last day of March next after its issue and after
the last day of March in each succeeding year. Failure to pay the renewal fee by the required date results in the
expiration of the license.
IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: ORC Ann. § 3916.06(B)(1)(c).
IS THERE A MINIMUM PAYMENT REQUIREMENT?: YES. OAC Ann. 3901-9-01(L). Standards for Evaluation of
(1) In order to assure that viators receive a reasonable return for viaticating an insurance policy, the following shall be
the minimum payouts.
|“Viator’s or Insured Person’s Remaining Life Expectancy at Time of Viatication”||“Minimum Percentage of Expected Death Benefit (Net of Loans and Any Cash Surrender Value to be Received by Viator)”|
|Less than 6 months||80%|
|At least 6, but less than 12 months||75%|
|At least 12, but less than 18 months||70%|
|At least 18, but less than 24 months||65%|
(2) For viatical settlement transactions involving terminally or chronically ill viators, the payout shall be increased by one
hundred per cent of any net cash surrender value of the insurance policy at the time the viatical contract is issued.
(3) For viatical settlement transactions involving terminally or chronically ill viators, payouts may be reduced by the
minimum premium (including premiums payable for additional benefits retained at the option of the viator), if any,
required in order to keep the contract in force for the duration of the viator’s remaining life expectancy. Other than this
allowable reduction in payout, there shall be no other retention of funds for expenses or broker’s fees.
WHEN DOES THE MONEY NEED TO BE IN ESCROW?: ORC Ann. § 3916.09(A). 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 three business days after the date the escrow agent receives the
documents, 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 to be paid by the viatical settlement provider to the escrow agent for deposit in a trust or escrow account set up
for that purpose by the escrow agent in a regulated financial institution. 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 and any other person pursuant to the viatical settlement contract and the escrow
agreement. The escrow agent shall make payment within three business days of the date the escrow agent received the
acknowledged forms from the insurance company. Funds are considered sent 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. ORC Ann. § 3916.06(C). If the viatical
settlement provider transfers ownership or changes the beneficiary of the policy, the viatical settlement 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. ORC Ann. § 3916.07(B). Within
twenty days after a viator executes documents necessary to transfer any rights under a policy or within twenty days of
entering any expressed or implied agreement, option, promise, or other form of understanding to viaticate the policy,
the viatical settlement provider shall give written notice to the insurer that issued that policy that the policy has or will
become a viaticated policy. The notice shall be accompanied by the documents required by division (C) of this section.
WHAT IS THE RESCISSION PERIOD?: ORC Ann. § 3916.08. Each viatical settlement contract entered into in this state
shall provide the viator with an un-conditional right to rescind the contract for at least fifteen calendar days after the
receipt of the viatical settlement proceeds. If the insured dies during the rescission period, the viatical settlement
contract is deemed to have been rescinded, subject to repayment of all viatical settlement proceeds to the viatical
settlement provider. If a viatical settlement contract is rescinded by the viator pursuant to this section, ownership of the
insurance policy or certificate reverts to the viator or to the viator’s estate if the viator is deceased, irrespective of any
transfer of ownership of the policy or certificate by the viator, viatical settlement provider, or any other person.
IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – NAIC or OWN – State Approved. ORC Ann. §
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