The percentage is based upon the terminally-ill person s reasonable life expectancy. The tax-free provision will apply only to people whose life expectancy is less than 24 months, and the purchasing company must be licensed by the state in which the viator resides. At this time only about ten states have license requirements but draft regulations are pending in several other states and more legislation is expected next year. Finally, a federal appeals court has ruled that the selling of shares in viators life insurance policies is not subject to regulation under federal securities laws. The Securities and Exchange Commission had sought to require Life Partners, one of the largest viatical settlement companies, to register as securities partial interests in those policies.
Registration is considered to be a time-consuming and costly process.
To fall under federal securities laws was considered to be a setback to the industry. The SEC had charged Life Partners with selling unregistered securities and making misleading statements about sales of viatical settlements. Our challenge now is to educate people about the viatical settlement product and process. 201 Walton Ferry Road, Hendersonville, Tennessee 37077-0364. Copyright 1996 by Timothy L. Takacs.