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2. A written statement, signed by the person and witnessed by 2 disinterested
11adults, in which the person does all of the following:
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a. Consents to the viatical settlement contract.
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b. Acknowledges his or her catastrophic or life-threatening illness or condition.
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c. Releases his or her medical records to the viatical settlement provider.
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d. Represents that he or she understands the viatical settlement contract, the
16benefits under the life insurance policy or certificate and the relationship between
17the viatical settlement contract and the life insurance policy or certificate.
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e. Acknowledges that he or she is entering into the viatical settlement contract
19freely and voluntarily.
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f. Affirms that he or she has received financial advice from an individual or
21entity other than the viatical settlement provider or a viatical settlement broker
22regarding the effect of the viatical settlement on creditor claims, income taxes and
23government benefits.
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1(b) Before the execution of a viatical settlement contract, a viatical settlement
2provider or a viatical settlement broker shall disclose to the policyholder or
3certificate holder all of the following:
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1. That there may be alternatives to viatical settlements for persons with a
5catastrophic or life-threatening illness or condition and what those alternatives are,
6including accelerated benefits under the life insurance policy or certificate.
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2. That the policyholder or certificate holder should obtain financial advice
8from a financial counselor, a tax adviser or an appropriate agency.
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3. That some or all of the viatical settlement proceeds may be taxable and that
10he or she should seek advice from a personal tax adviser.
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4. That the viatical settlement proceeds may be subject to the claims of
12creditors.
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5. That receipt of a viatical settlement may adversely affect the recipient's
14eligibility for medicaid or other government benefits and that he or she should seek
15advice from any appropriate agencies.
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6. That the policyholder or certificate holder may rescind the viatical
17settlement contract as provided in par. (d).
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7. The frequency of and procedure for contacts by the provider or broker to
19determine the health status of the policyholder or certificate holder after the
20performance of the contract.
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8. The date by which the viatical settlement proceeds will be available to the
22policyholder or certificate holder and the bank from which the funds will be
23available.
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9. That, except for double or additional indemnity provisions for accidental
25death, as a result of the viatical settlement contract no beneficiary named by the
1policyholder or certificate holder will receive any insurance proceeds under the
2policy or certificate.
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10. The name of the new policyholder or certificate holder under the viatical
4settlement contract.
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(c) 1. Every viatical settlement shall be reasonable and shall meet the following
6minimum payment requirements:
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a. If the insured's life expectancy is 12 months or less, 75% of the policy or
8certificate face value.
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b. If the insured's life expectancy is more than 12 months but less than 24
10months, 65% of the policy or certificate face value.
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c. If the insured's life expectancy is 24 months or more, 55% of the policy or
12certificate face value.
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2. The minimum payment amount under subd. 1. shall be reduced by the
14amount of any outstanding loans against the policy or certificate.
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(d) Every viatical settlement contract entered into in this state shall provide
16that the policyholder or certificate holder entering into the contract has the
17unconditional right to rescind the contract within 30 days after the contract is
18entered into or 15 days after receiving the viatical settlement proceeds, whichever
19is sooner. If the policyholder or certificate holder wishes to rescind the contract after
20receipt of the viatical settlement proceeds, the policyholder or certificate holder must
21refund the proceeds.
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(e) If a policy or certificate that is the subject of a viatical settlement contract
23contains a provision for double or additional indemnity for accidental death, the
24viatical settlement contract shall provide for the same additional payment to a
1beneficiary named payable in the viatical settlement contract by the policyholder or
2certificate holder.
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(f) Upon receipt from the policyholder or certificate holder of all documents
4necessary for the transfer of the life insurance policy or certificate, the viatical
5settlement provider shall pay all of the proceeds of the settlement into a trust account
6or escrow account, to be managed by a trustee or escrow agent, in a bank that is
7approved by the commissioner. The trustee or escrow agent shall pay the proceeds
8to the former policyholder or certificate holder immediately upon receiving
9acknowledgement from the insurer issuing the life insurance policy or certificate
10that the policy or certificate has been transferred to the viatical settlement provider.
11Payment shall be made in a lump sum by certified check or by wire transfer to an
12account of the former policyholder or certificate holder.
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(g) If the viatical settlement proceeds are not paid to the policyholder or
14certificate holder by the date disclosed under par. (b) 8., the viatical settlement
15contract shall be void.
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16(10) General rules related to viatical settlements. (a) A viatical settlement
17provider or broker may not discriminate in the making of viatical settlements on the
18basis of race, age, sex, national origin, creed, religion, occupation, marital or family
19status, sexual orientation or whether the person whose life is insured under the
20policy or certificate has dependents.
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(b) A viatical settlement provider or broker may not pay or offer to pay a finder's
22fee, commission or other compensation to a physician, attorney, accountant or other
23person providing medical, legal or financial planning services to the policyholder or
24certificate holder of a policy or certificate that may be the subject of a viatical
1settlement contract, or to any other person acting as an agent of the policyholder or
2certificate holder with respect to a viatical settlement.
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(c) A viatical settlement provider or broker shall comply with the
4confidentiality requirements of ss. 146.82 and 252.15 with respect to any medical
5information obtained by the viatical settlement provider or broker concerning the
6person whose life is insured under the policy or certificate.
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(d) Contacts by a viatical settlement provider or broker for the purpose of
8determining the health status of a person whose life is insured under a policy or
9certificate that was the subject of a viatical settlement contract shall be limited to
10once every 3 months if the person's life expectancy was more than one year at the time
11that the viatical settlement contract was entered into and once per month if the
12person's life expectancy was one year or less at the time that the viatical settlement
13contract was entered into.
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(e) The owner of a life insurance policy or certificate may not be required to
15enter into a viatical settlement contract as a condition of eligibility for public
16assistance, or as a condition for receiving the full amount of public assistance
17benefits for which the person is otherwise eligible.
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(f) A viatical settlement provider or broker may not solicit as investors in a life
19insurance policy or certificate that is the subject of a viatical settlement contract
20persons who are in a position to influence the treatment of the catastrophic or
21life-threatening illness or condition of the person whose life is insured under the
22policy or certificate.
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(g) 1. Advertising related to viatical settlements shall be truthful and may not
24be misleading by fact or implication.
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12. If an advertisement emphasizes the speed with which a viatical settlement
2may occur, the advertisement shall disclose, by life expectancy category under sub.
3(9) (c), the average time between the completion of the application and the receipt of
4the settlement proceeds under contracts with the advertiser.
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3. If an advertisement emphasizes the amount of proceeds that may be
6received, the advertisement shall disclose, by life expectancy category under sub. (9)
7(c), the average purchase price as a percentage of policy face value that has been
8obtained under contracts with the advertiser during the past 6 months.
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9(11) Additional regulatory authority. (a) The commissioner may require the
10filing of a bond as a condition of licensure under this section.
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(b) The commissioner may promulgate rules that do any of the following:
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1. Establish standards for determining the reasonableness of payments under
13viatical settlement contracts that exceed the minimum percentages under sub. (9)
14(c).
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2. Establish the maximum fee that a viatical settlement provider may pay a
16viatical settlement broker for services provided.
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3. Establish any additional standards that may be necessary for the
18administration of this section.
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20(1)
Sales of certain insurance policies. The treatment of sections 71.05 (1)
21(f), 71.26 (3) (a) and (ag) and 71.45 (2) (a) 14. of the statutes first applies to taxable
22years beginning on January 1, 1996.