NU Online News Service, July 17, 7:15 p.m. – Pennsylvania Gov. Mark Schweiker has signed S.B. 462, a bill that creates the Viatical Settlements Act.
The act gives the Pennsylvania Insurance Department the authority to regulate viatical and life settlements.
Viatical settlements arose in the 1980s as a way for terminally ill persons, especially people with AIDS, to raise immediate cash by selling the rights to life insurance policy benefits.
Today, companies in the viatical industry call the arrangements “life settlements” and make them available to the elderly as well as the sick.
Viatical settlement brokers, the companies that act as agents for ill or aging “viators,” sell the life insurance policies to viatical settlement providers. The viatical settlement providers then collect and pool the policies for the purpose of selling them to investors.
The new law regulates both the viatical brokers and the providers, according to Rosanne Placey, a spokeswoman for the Pennsylvania Insurance Department.
Brokers and providers must now get licenses from the state before they can engage in the viatical settlement business in Pennsylvania.