2023 Montana Code Annotated › Title 33. Insurance and Insurance Companies › Chapter 20. Life Insurance › Part 13. Viatical Settlements › 33-20-1317. Disclosure of information to viatical settlement purchasers

33-20-1317. Disclosure of information to viatical settlement purchasers.
(1) A viatical settlement provider shall disclose the information specified in this section to a viatical settlement purchaser prior to the date on which the parties sign the viatical settlement purchase agreement.
(2) The viatical settlement purchaser shall date and sign the information disclosure. The viatical settlement provider shall provide a copy of the information disclosure to the viatical settlement purchaser.
(3) The information disclosure must include the following:
(a) that the viatical settlement purchaser will not receive payment until the insured dies;
(b) that the actual annual rate of return on a viatical settlement purchase agreement is dependent upon an accurate projection of the insured's life expectancy and the actual date of the insured's death and that an annual guaranteed rate of return is not determinable;
(c) that the viatical insurance contract is not a liquid purchase since it is impossible to predict the exact timing of its maturity, that the funds are probably not available until the death of the insured, and that there is not an established secondary market for the resale of viatical settlement products by the viatical settlement purchaser;
(d) that 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 settlement investment;
(e) (i) that 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, and that these payments may reduce the viatical settlement purchaser's return and may continue beyond the insured's projected life expectancy; and
(ii) if a party other than the viatical settlement purchaser is responsible for the payment, that the name of that party must also be disclosed;
(f) the amount of the premium that a purchaser is required to pay, if applicable;
(g) that the viatical settlement purchaser may be responsible for payment of the insurance premium or other costs related to the policy if the insured returns to health;
(h) the amount of any fees or other expenses to be charged to the viatical settlement purchaser;
(i) whether or not the viatical settlement purchaser is entitled to a refund of all or part of the investment under the viatical settlement purchase agreement if the policy is later determined to be void;
(j) that group policies:
(i) may contain limitations on conversion rights;
(ii) may require additional premiums to be paid if the group policy is converted; and
(iii) may be terminated and replaced by another group policy, with benefits under the new policy that may be substantially less than those in the original coverage;
(k) for group policies, the name of the party responsible for the payment of any additional premiums;
(l) that there are risks associated with policy contestability, including the risk that the viatical settlement purchaser may not have a claim or may have only a partial claim to death benefits if the insurer rescinds the policy within the contestability period;
(m) whether or not the viatical settlement purchaser will be the beneficiary or owner of the policy and, if the viatical settlement purchaser is the beneficiary, the special risks associated with beneficiary status, including the risk that the beneficiary may be changed;
(n) a description of:
(i) the experience and qualifications of the person who has determined the life expectancy of the insured, such as in-house staff, independent physicians, or specialty firms that weigh medical and actuarial data;
(ii) the information on which the projection of life expectancy is based; and
(iii) the relationship of the person who has made the determination of life expectancy to the viatical settlement provider, if any;
(o) all of the life expectancies obtained in the process of determining the price paid to the policyholder or certificate holder;
(p) a description and amount of any loan or other encumbrance against or in connection with the policy; and
(q) that the viatical settlement purchaser is encouraged to consult with an attorney, accountant, or financial planner who is not affiliated with the viatical settlement broker or viatical settlement provider prior to purchase.
History: En. Sec. 4, Ch. 295, L. 2001; amd. Sec. 72, Ch. 114, L. 2003.