NU Online News Service, May 6, 2003, 5:23 p.m. EDT – Virginia Gov. Mark Warner, a Democrat, has signed a bill that explicitly authorizes and regulates the sale of viatical settlement contracts in Virginia.
The bill, H.B. 2613, was introduced by Rep. L. Preston Bryant Jr., R-Lynchburg, Va., chairman of the House Commerce and Labor employment subcommittee.
The act, which applies to any broker who buys the rights to life insurance policy benefits from chronically ill or terminally ill Virginia residents, lets both resident and nonresident life insurance agents apply for licenses to act as viatical settlement brokers in Virginia, according to the text.
In Virginia, the definition of “viatical settlement broker” does not include a lawyer, accountant or accredited financial planner who is paid solely to represent the individual selling the life benefits rights.
An agent who wants to act as a broker representing the individual policyholder must have a contract with the viator and receive compensation solely from the viator, not from the company supplying the cash for the viatical settlement, according to the act text.
The act requires brokers to give individuals notices discussing the risks of entering into viatical settlement contracts, and it gives individuals up to 15 days to rescind viatical settlement contracts. It also attempts to regulate advertising of viatical settlement contracts and related products and services.
The Life Insurance Consumers Alliance, Washington, a viatical industry group, has issued a statement praising the enactment of the bill.
The new law “allows people to recognize the true value of their policies and provide them with important consumer protections,” James Butera, LICA executive director, says in the statement.
The text of the act is available on the Web at http://leg1.state.va.us/cgi-bin/legp504.exe?031+ful+CHAP0717