Viatical Group Works On Accountability Standards

This is “so we can begin to build real-world accountable data sets we can look at in the association, so when I go on the road, I’m not in the awkward position of saying ,?We don’t have information on that,’ ” Head says.

If all members use a standard set of internal controls and methods of documentation, then the association can “certify companies and say, ?These people are in the proper posture,’ and eventually we will be able to approach the best-practices standard,” Head says. “It’s a process, and we’re committed to going to that end, but we have a lot of work ahead of us.”

A viatical settlement is a vehicle that a seriously ill person can use to sell the rights to life insurance death benefits. Life settlements work much the same way, but they usually serve as vehicles for seniors and wealthy individuals who are seeking to sell policy benefits rights for financial or estate-planning purposes. Increasingly, the term “life settlement” is used to refer to both types of transactions.

Companies created the modern viatical and life settlement industry in response to the AIDS pandemic. Previously, use of viatical settlements was rare.

Head says updated standards are needed because the viatical industry has been evolving so quickly. In a period of several years, the industry has moved from an environment of relatively little regulation to one of intensive and rapidly changing legislation and regulation, he says.