§ 508e-8

508E.8 Disclosure to viator. 1. With each application for a viatical settlement, a viatical settlement provider or viatical settlement broker shall provide the viator with at least the following disclosures no laterthan the time the application for the viatical settlement contract is signed by all parties. Thedisclosures shall be provided in a separate document that is signed by the viator and theviatical settlement provider or viatical settlement broker, and shall provide all of the followinginformation: a. There are possible alternatives to viatical settlement contracts including any accelerated death benefits or policy loans offered under the viator’s life insurance policy. b. That a viatical settlement broker represents exclusively the viator, and not the insurer or the viatical settlement provider, and owes a fiduciary duty to the viator, including a duty toact according to the viator’s instructions and in the best interest of the viator. c. Some or all of the proceeds of the viatical settlement may be taxable under federal income tax and state franchise and income taxes, and assistance should be sought from aprofessional tax advisor. d.

Some or all of the proceeds of the viatical settlement may be taxable under federal income tax and state franchise and income taxes, and assistance should be sought from aprofessional tax advisor. d. Proceeds of the viatical settlement could be subject to the claims of creditors.e. Receipt of the proceeds of a viatical settlement may adversely affect the viator’s eligibility for Medicaid or other government benefits or entitlements, and advice should beobtained from the appropriate government agencies. f. The viator has the right to rescind a viatical settlement contract before the earlier of thirty days after the date upon which the viatical settlement contract is executed by all partiesor fifteen days after the viatical settlement proceeds have been paid to the viator, as providedin section 508E.10, subsection 3. Rescission, if exercised by the viator, is effective only if bothnotice of the rescission is given, and the viator repays all proceeds and any premiums, loans,and loan interest paid on account of the viatical settlement within the rescission period. If theinsured dies during the rescission period, the viatical settlement contract shall be deemed tohave been rescinded,

erest paid on account of the viatical settlement within the rescission period. If theinsured dies during the rescission period, the viatical settlement contract shall be deemed tohave been rescinded, subject to repayment by the viator or the viator’s estate of all viaticalsettlement proceeds and any premiums, loans, and loan interest that have been paid by theviatical settlement provider or purchaser within sixty days of the insured’s death. g. Funds will be sent to the viator within three business days after the viatical settlement provider has received the insurer’s or group administrator’s written acknowledgment thatownership of the policy or interest in the certificate has been transferred and the beneficiaryhas been designated. h. Entering into a viatical settlement contract may cause other rights or benefits, including conversion rights and waiver of premium benefits, that may exist under the policy orcertificate, to be forfeited by the viator. Assistance should be sought from a financial adviser. i. Disclosure to a viator shall include distribution of a brochure describing the process of viatical settlements.

to be forfeited by the viator. Assistance should be sought from a financial adviser. i. Disclosure to a viator shall include distribution of a brochure describing the process of viatical settlements. The national association of insurance commissioners form for thebrochure shall be used unless another form is developed and approved by the commissioner. j. The disclosure document shall contain the following language: All medical, financial, or personal information solicited or obtained by a viatical settlement provider or viatical settlementbroker about an insured, including the insured’s identity or theidentity of family members, a spouse, or a significant other maybe disclosed as necessary to effect the viatical settlement betweenthe viator and the viatical settlement provider. If you are askedto provide this information, you will be asked to consent to thedisclosure. The information may be provided to someone who buysthe policy or provides funds for the purchase. You may be asked torenew your permission to share information every two years. k. Following execution of a viatical contract, the insured may be contacted for the purpose of determining the insured’s health status and to

new your permission to share information every two years. k. Following execution of a viatical contract, the insured may be contacted for the purpose of determining the insured’s health status and to confirm the insured’s residential or businessstreet address and telephone number, or as otherwise provided in this chapter. This contactshall be limited to once every three months if the insured has a life expectancy of more than Sat Dec 23 00:41:27 2023 Iowa Code 2024, Section 508E.8 (19, 0) §508E.8, VIATICAL SETTLEMENT CONTRACTS 2 one year, and no more than once per month if the insured has a life expectancy of one yearor less. All such contacts shall be made only by a duly licensed viatical settlement provideror by the authorized representative of a duly licensed viatical settlement provider. 2. A viatical settlement provider shall provide the viator with at least the following disclosures no later than the date the viatical settlement contract is signed by all parties.The disclosures shall be conspicuously displayed in the viatical settlement contract or in aseparate document signed by the viator and provide all of the following information: a.

gned by all parties.The disclosures shall be conspicuously displayed in the viatical settlement contract or in aseparate document signed by the viator and provide all of the following information: a. The affiliation, if any, between the viatical settlement provider and the issuer of the insurance policy to be viaticated. b. The name, business address, and telephone number of the viatical settlement provider.c. If an insurance policy to be viaticated has been issued as a joint policy or involves family riders or any coverage of a life other than the insured under the policy to be viaticated, a noticeof the viator’s possible loss of coverage on the other lives under the policy and to consult withthe viator’s insurance producer or the insurer issuing the policy for advice on the proposedviatical settlement. d. The dollar amount of the current death benefit payable to the viatical settlement provider under the policy or certificate. If known, the viatical settlement provider shall alsodisclose the availability of any additional guaranteed insurance benefits, the dollar amountof any accidental death and dismemberment benefits under the policy or certificate, and theextent to which the

close the availability of any additional guaranteed insurance benefits, the dollar amountof any accidental death and dismemberment benefits under the policy or certificate, and theextent to which the viator’s interest in those benefits will be transferred as a result of theviatical settlement contract. e. Whether the funds will be escrowed with an independent third party during the transfer process, and if so, provide the name, business address, and telephone number ofthe independent third-party escrow agent, and the fact that the viator or owner may inspector receive copies of the relevant escrow or trust agreements or documents. 3. A viatical settlement broker shall provide the viator with at least the following disclosures no later than the date the viatical settlement contract is signed by all parties.The disclosures shall be conspicuously displayed in the viatical settlement contract or in aseparate document signed by the viator and provide all of the following information: a. The name, business address, and telephone number of the viatical settlement broker.b. A full, complete, and accurate description of all offers, counteroffers, acceptances, and rejections relating to the

name, business address, and telephone number of the viatical settlement broker.b. A full, complete, and accurate description of all offers, counteroffers, acceptances, and rejections relating to the proposed viatical settlement contract. c. Any affiliations or contractual arrangements between the viatical settlement broker and any person making an offer in connection with the proposed viatical settlement contracts. d. The amount and method of calculating the broker’s compensation. As used in this paragraph, 'compensation' includes anything of value paid or given to a viatical settlementbroker for the placement of a policy. e. Where any portion of the viatical settlement broker’s compensation, as defined in paragraph 'd', is taken from a proposed viatical settlement offer, the broker shall disclosethe total amount of the viatical settlement offer and the percentage of the viatical settlementoffer comprised by the viatical settlement broker’s compensation. 4. If the viatical settlement provider transfers ownership or changes the beneficiary of the insurance policy, the viatical settlement provider shall communicate in writing the change inownership or beneficiary to the insured

ent provider transfers ownership or changes the beneficiary of the insurance policy, the viatical settlement provider shall communicate in writing the change inownership or beneficiary to the insured within twenty days after the change. 5. A viatical settlement provider shall provide the viatical settlement purchaser with at least the following disclosures prior to the date the viatical settlement purchase agreementis signed by all parties. The disclosures shall be conspicuously displayed in any viaticalpurchase contract or in a separate document signed by the viatical settlement purchaserand viatical settlement provider or viatical settlement investment agent, and shall make thefollowing disclosure to the viatical settlement purchaser: a. The viatical settlement purchaser will receive no returns including dividends and interest, until the insured dies and a death claim payment is made. b. The actual annual rate of return on a viatical settlement contract is dependent upon an accurate projection of the insured’s life expectancy, and the actual date of the insured’sdeath. An annual 'guaranteed' rate of return is not determinable. c.

settlement contract is dependent upon an accurate projection of the insured’s life expectancy, and the actual date of the insured’sdeath. An annual 'guaranteed' rate of return is not determinable. c. The viaticated life insurance contract should not be considered a liquid purchase since Sat Dec 23 00:41:27 2023 Iowa Code 2024, Section 508E.8 (19, 0) it is impossible to predict the exact timing of its maturity and the funds probably are notavailable until the death of the insured. There is no established secondary market for resaleof these products by the viatical settlement purchaser. d. The viatical settlement purchaser may lose all benefits or may receive substantially reduced benefits if the insurer goes out of business during the term of the viatical investment. e. The viatical settlement purchaser is responsible for payment of the insurance premium or other costs related to the policy, if required by the terms of the viatical purchase agreement.These payments may reduce the viatical settlement purchaser’s return. If a party other thanthe viatical settlement purchaser is responsible for the payment, the name and address of thatparty also shall be disclosed. f.

reduce the viatical settlement purchaser’s return. If a party other thanthe viatical settlement purchaser is responsible for the payment, the name and address of thatparty also shall be disclosed. f. The viatical settlement purchaser is responsible for payment of the insurance premiums or other costs related to the policy if the insured returns to health. The viatical settlementprovider shall disclose the amount of such premiums, if applicable. g. The name, business address, and telephone number of the independent third party providing escrow services and the relationship to the viatical settlement broker. h. The amount of any trust fees or other expenses to be charged to the viatical settlement purchaser shall be disclosed. i. Whether the viatical settlement purchaser is entitled to a refund of all or part of the viatical settlement purchaser’s investment under the viatical settlement contract if the policyis later determined to be null and void. j. That group policies may contain limitations or caps in the conversion rights, that additional premiums may have to be paid if the policy is converted, the name of the partyresponsible for the payment of the additional premiums, and,

imitations or caps in the conversion rights, that additional premiums may have to be paid if the policy is converted, the name of the partyresponsible for the payment of the additional premiums, and, if a group policy is terminatedand replaced by another group policy, that there may be no right to convert the originalcoverage. k. The risks associated with policy contestability including but not limited to the risk that the viatical settlement purchaser will have no claim or only a partial claim to death benefitsshould the insurer rescind the policy within the contestability period. l. Whether the viatical settlement purchaser will be the owner of the policy in addition to being the beneficiary, and if the viatical settlement purchaser is the beneficiary only and notalso the owner, the special risks associated with that status, including but not limited to therisk that the beneficiary may be changed or the premium may not be paid. m. The experience and qualifications of the person who determines the life expectancy of the insured, including in-house staff, independent physicians, and specialty firms that weighmedical and actuarial data; the information this projection is based on;

determines the life expectancy of the insured, including in-house staff, independent physicians, and specialty firms that weighmedical and actuarial data; the information this projection is based on; and the relationshipof the projection maker to the viatical settlement provider, if any. n. A brochure describing the process of investment in viatical settlements. The national association of insurance commissioners form for the brochure shall be used unless anotherform is developed and approved by the commissioner. 6. A viatical settlement provider shall provide the viatical settlement purchaser with at least the following disclosures no later than at the time of the assignment, transfer, or saleof all or a portion of an insurance policy. The disclosures shall be contained in a documentsigned by the viatical settlement purchaser and viatical settlement provider, and shall makeall of the following disclosures to the viatical settlement purchaser: a. All the life expectancy certifications obtained by the provider in the process of determining the price paid to the viator. b. Whether premium payments or other costs related to the policy have been escrowed.

ife expectancy certifications obtained by the provider in the process of determining the price paid to the viator. b. Whether premium payments or other costs related to the policy have been escrowed. If escrowed, state the date upon which the escrowed funds will be depleted and whether theviatical settlement purchaser will be responsible for payment of premiums thereafter and, ifso, the amount of the premiums. c. Whether premium payments or other costs related to the policy have been waived. If waived, disclose whether the viatical settlement purchaser will be responsible for paymentof the premiums if the insurer that wrote the policy terminates the waiver after purchase andthe amount of those premiums. d. The type of policy offered or sold, i.e., whole life, term life, universal life, or a group Sat Dec 23 00:41:27 2023 Iowa Code 2024, Section 508E.8 (19, 0) §508E.8, VIATICAL SETTLEMENT CONTRACTS 4 policy certificate, any additional benefits contained in the policy, and the current status of thepolicy. e. If the policy is term insurance, the special risks associated with term insurance including but not limited to the viatical settlement purchaser’s responsibility for

e current status of thepolicy. e. If the policy is term insurance, the special risks associated with term insurance including but not limited to the viatical settlement purchaser’s responsibility for additionalpremiums if the viator continues the term policy at the end of the current term. f. Whether the policy is contestable. g. Whether the insurer that wrote the policy has any additional rights that could negatively affect or extinguish the viatical settlement purchaser’s rights under the viatical settlementcontract, what these rights are, and under what conditions these rights are activated. h. The name and address of the person responsible for monitoring the insured’s condition. The viatical settlement provider shall describe how often the monitoring of the insured’scondition is done, how the date of death is determined, and how and when this informationwill be transmitted to the viatical settlement purchaser. 2008 Acts, ch 1155, §8; 2008 Acts, ch 1191, §130; 2018 Acts, ch 1041, §127Referred to in §508E.5, 508E.10 Sat Dec 23 00:41:27 2023 Iowa Code 2024, Section 508E.8 (19, 0)