Viatical settlement contracts; required disclosures.

The viatical settlement broker, or the viatical settlement provider in transactions in which no broker is used, must inform the viator by the date of application for a viatical settlement contract:

(1) That there are possible alternatives to viatical settlement contracts for persons who have a catastrophic or life-threatening illness, including, but not limited to, accelerated benefits offered by the issuer of a life insurance policy.

(2) That proceeds of the viatical settlement could be taxable, and assistance should be sought from a personal tax advisor.

(3) That viatical settlement proceeds could be subject to the claims of creditors.

(4) That receipt of viatical settlement proceeds could adversely affect the recipient’s eligibility for Medicaid or other government benefits or entitlements, and advice should be obtained from the appropriate agencies.

(5) That all viatical settlement contracts entered into in this state must contain an unconditional rescission provision which allows the viator to rescind the contract within 15 days after the viator receives the viatical settlement proceeds, conditioned on the return of such proceeds.

(6) The name, business address, and telephone number of the independent third-party escrow agent, and the fact that the viator may inspect or receive copies of the relevant escrow or trust agreements or documents.