2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 42A - Viatical Settlements (§§ 4221 — 4235) › § 4228 - General rules

(a)
(1) A viatical settlement provider executing a viatical settlement shall first obtain:
(A) If the viator is the insured, a written statement from a attending physician with license in effect, that the viator is of sound mind and under no constraint or undue influence to enter into a viatical settlement, and
(B) A document in which the insured consents to the release of his or her medical records to a viatical settlement provider, viatical settlement broker and the insurance company that issued the life insurance policy covering the life of the insured.
(2) Within twenty (20) days of entering into any agreement, option, promise or any other form of understanding, expressed or implied, to viaticate the policy, the viatical settlement provider shall give written notice to the insurer that issued that insurance policy that the policy has or will become a viaticated policy and said notice shall be accompanied by the documents required by clause (3) of this subsection.
(3) The viatical settlement provider shall deliver a copy of the medical release required under clause (1)(B) of this subsection, a copy of the viator’s application for the viatical settlement, the notice required under clause (2) of this subsection and a request for verification, unless other standards are developed by the Commissioner.
(4) The insurer shall respond to a request for verification of coverage submitted on an approved form by a viatical settlement provider within thirty (30) calendar days of the date the request is received and shall indicate whether, based on the medical evidence and documents provided, the insurer intends to pursue an investigation at this time regarding the validity of the insurance contract.
(5) Prior to or at the time of execution of the viatical settlement, the viatical settlement contract provider under the jurisdiction of the Commonwealth of Puerto Rico, shall obtain a sworn statement in which the viator consents to the viatical settlement, represents that the viator has a full and complete understanding of the viatical settlement, that he or she has a full and complete understanding of the benefits of the life insurance policy, acknowledges that he or she is entering into the viatical settlement freely and voluntarily and, for persons with a terminal or chronic illness or condition, acknowledges that the insured has a terminal or chronic illness and that the terminal or chronic illness or condition was diagnosed after the life insurance policy was issued.
(6) If a viatical settlement broker performs any of these activities required of the viatical settlement provider, the provider is deemed to have fulfilled the requirements of this section.
(b) All medical information solicited or obtained by any authorized person or entity shall be subject to the applicable provisions of state law related to confidentiality of medical information.
(c) All viatical settlements executed in the Commonwealth of Puerto Rico shall provide the viator with an unconditional right to rescind the settlement for at least fifteen (15) calendar days from the receipt of the viatical settlement proceeds. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment to the provider of viatical settlements subscribed in the jurisdiction of the Commonwealth of Puerto Rico, of all viatical settlement proceeds, and any premiums, loans, and loan interest that have been paid by the viatical settlement provider or purchaser.
(d) The viatical settlement provider shall instruct the viator to send the executed documents required to effect the change in ownership, assignment or change in beneficiary directly to the independent escrow agent. Within three (3) business days after the date the escrow agent receives the document (or from the date the viatical settlement provider receives the documents, if the viator erroneously provides the documents directly to the provider), the provider shall pay or transfer the proceeds of the viatical settlement executed in the jurisdiction of the Commonwealth of Puerto Rico, into an escrow or trust account maintained in a state or federally-chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC). Upon payment of the settlement proceeds into the escrow account, the escrow agent shall deliver the original change in ownership, assignment or change in beneficiary forms to the viatical settlement provider’s or related provider trust. Upon the escrow agent’s receipt of the acknowledgment of the properly completed transfer of ownership, assignment or designation of beneficiary from the insurance company, the escrow agent shall pay the settlement proceeds to the viator.
(e) Failure to tender consideration to the viator for the viatical settlement within the time disclosed pursuant to Section 8A(6) [sic] renders the viatical settlement voidable by the viator for lack of consideration until the time consideration is tendered to and accepted by the viator.
(f) Contacts with the insured for the purpose of determining the health status of the insured by the viatical settlement provider or viatical settlement broker after the viatical settlement is effectuated, shall only be made by the viatical settlement provider or broker licensed in Puerto Rico or its authorized representatives and shall be limited to once every three (3) months for insureds with a life expectancy of more than one year, and to no more than once per month for insureds with a life expectancy of one year or less. The provider or broker shall explain the procedure for these contacts at the time the viatical settlement is entered into. The limitations set forth in this subsection shall not apply to any contacts with an insured for reasons other than determining the insured’s health status. Viatical settlement providers and viatical settlement brokers shall be responsible for the actions of their authorized representatives.
History —Ins. Code, added as § 43.080 on Dec. 28, 2005, No. 164, § 2; Aug. 4, 2006, No. 147, § 26.