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TYPE OF LICENSE (LIFE SETTLEMENT/VIATICAL SETTLEMENT): LIFE SETTLEMENT (USES VIATICAL TERMINOLOGY)
WHAT DOES THE STATE DEFINE AS CONTESTABLE?: 2 YEARS
WHAT IS THE REQUIRED HOLDING PERIOD?: 5 YEARS. See: W. Va. Code § 33-13C-11(a).
WHEN DOES LICENSE NEED TO BE RENEWED?: N/A
IS BROKER COMPENSATION DISCLOSURE REQUIRED?: YES. See: W. Va. Code § 33-13C-8(c)(4).
IS THERE A MINIMUM PAYMENT REQUIREMENT?: YES. W. Va. CSR § 114-80-5. Standards for Evaluation of Reasonable Payments for Terminally or Chronically Ill Insureds.
5.1. In order to assure that viators who are terminally or chronically ill receive a reasonable return for viaticating an insurance policy, the return for viaticating a policy shall be no less than the following payout:
5.1.a. If the life expectancy is less than six months, eighty percent of the net death benefit.
5.1.b. If the life expectancy is at least six months but less than twelve months, seventy percent of the net death benefit.
5.1.c. If the life expectancy is at least twelve months but less than eighteen months, sixty-five percent of the net death benefit.
5.1.d. If the life expectancy is at least eighteen months but less than twenty-five months, sixty percent of the net death benefit.
5.1.e. If the life expectancy is twenty-five months or more, the viator must receive at least the greater of the cash surrender value or accelerated death benefit in the policy.
5.2. Except where the cash surrender value is paid, the percentage may be reduced by five percent for viaticating a policy written by an insurer rated less than the highest four categories by A.M. Best, or a comparable rating by another rating agency.
WHEN DOES THE MONEY NEED TO BE IN ESCROW?: W. Va. Code § 33-13C-10(d). 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 escrow agent receives the document or, if the viator erroneously provides the documents directly to the provider, after the viatical settlement provider receives the documents, the provider shall pay or transfer the proceeds of the viatical settlement into an escrow or trust account maintained in a state or federally charted financial institution whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC). 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. W. Va. Code § 33-13C-8(d). 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. W. Va. Code § 33-13C-10(a)(2). Within twenty days after a viator executes documents necessary to transfer any rights under an insurance policy or within twenty days of entering any agreement, option, promise or any 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 shall be accompanied by the documents required by subdivision (3) of this subsection.
WHAT IS THE RESCISSION PERIOD?: W. Va. Code § 33-13C-10(c). 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 upon which the viatical settlement contract is executed by all parties or thirty calendar days after the viatical settlement pro ceeds have been sent to the viator as provided in subsection (e) of this section. Rescission by the viator may be conditioned upon 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 result of the viatical settlement. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment to the viatical settlement provider or purchaser of all viatical settlement proceeds, any premiums, loans and loan interest that have been paid by the viatical settlement provider or purchaser, which shall be paid within sixty calendar days of the death of the insured. 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 written demand from the viatical settlement provider, which demand shall be accompanied by either the viator’s notice of re-scission if rescinded at the election of the viator, or notice of the death of the insured if rescinded by reason of the death of the insured within the applicable rescission period.
IS THERE A VOC REQUIREMENT (OWN/STATE/NAIC FORM)?: YES – STATE or OWN – State Approved. W. Va. Code § 33-13C-10(a)(3) and W. Va. CSR §114-80-12.2.
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