California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 12.9 - Life Settlements › Section 2548.28 - Life Settlement Licensee Disclosure to Life Settlement Applicant

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
State of California Department of Insurance Life
					 Settlement Licensee Disclosure to Life Settlement Applicant (To be provided no
					 later than at time of application for any life settlement
					 contract)
IMPORTANT: READ THIS DISCLOSURE FORM BEFORE SIGNING
					 ANY LIFE SETTLEMENT CONTRACT.
You should carefully read all of the following points
					 and seek financial, insurance, tax and other advice where
					 appropriate.
1. There may be
				  possible alternatives to life settlements which exist and include, but are not
				  limited to, accelerated benefits options that may be offered by your life
				  insurer.
2. Some or all of the
				  proceeds of a life settlement may be taxable. Assistance should be sought from
				  a professional tax adviser.
3.
				  There may be an impact on the receipt of public assistance. The recipient
				  should contact the State Department of Health Care Services and the State
				  Department of Social Services under Section
				  11022
				  of the Welfare and Institutions Code for further information.
4. Proceeds from a life settlement could be
				  subject to the claims of creditors.
5. Entering into a life settlement contract
				  may cause other rights or benefits, including conversion rights and waiver of
				  premium benefits that may exist under the policy or certificate of a group
				  policy to be forfeited. Assistance should be sought from a financial
				  adviser.
6. Entering into a life
				  settlement could limit the insured's ability to purchase life insurance in the
				  future because there is a limit to how much coverage insurers will issue on one
				  life.
7. The owner has a right to
				  rescind a life settlement contract within thirty (30) days of the date it is
				  executed by all parties and the owner has received all required disclosures, or
				  fifteen (15) days from receipt by the owner of the proceeds of the life
				  settlement, whichever is sooner. Rescission will only be effective if both
				  notice of rescission is given and all proceeds and any premiums, loans, and
				  loan interest paid on account of the provider are repaid within the rescission
				  period. If the insured dies during the rescission period, the contract shall be
				  deemed to have been rescinded subject to repayment by the owner or the owner's
				  estate of all proceeds and any premiums, loans, and loan interest to the
				  provider.
8. Proceeds will be sent
				  to the owner within three (3) business days after the provider has received the
				  insurer or group administrator's acknowledgement that ownership of the policy
				  of the interest in the certificate has been transferred and the beneficiary has
				  been designated in accordance with the terms of the life settlement
				  contract.
9. All medical,
				  financial, or personal information solicited or obtained by a provider or
				  broker about an insured, including the insured's identity or the identity of
				  family members, a spouse, or a significant other may be disclosed as necessary
				  to effect the life settlement contract between the owner and provider. If you
				  are asked to provide this information, you will be asked to consent to the
				  disclosure. The information may be provided to someone who buys the policy or
				  provides funds for the purchase. You may be asked to renew your permission to
				  share information every two (2) years.
10. The insured may be contacted by either
				  the provider or the broker or its authorized representative for the purpose of
				  determining the insured's health status or to verify the insured's address.
				  This contact is limited to once every three (3) months if the insured has a
				  life expectancy of more than one (1) year, and no more than once per month if
				  the insured has a life expectancy of one (1) year or less.
11. The broker represents the owner,
				  exclusively, and not the insurer or the provider or any other person, and owes
				  a fiduciary duty to the owner, including a duty to act at any times according
				  to the owners' instructions and in the best interest of the owner.
12. The name, business address, and telephone
				  number of the life settlement broker are as follows:
___________________________
(brokers' printed name)
___________________________
(address)
___________________________
___________________________
___________________________
(telephone number)
13. The following affiliation(s) or
				  contractual relation(s) exists between the provider and the broker:
___________________________
14. The following affiliation(s) or
				  contractual relation(s) exists between the provider and with the issuer of the
				  policy to be settled:__________.
LIFE INSURANCE POLICY OWNER'S ACKNOWLEDGMENT: I have
					 read and fully understand this disclosure form. I have received a copy of this
					 disclosure to keep for my records.
LIFE INSURANCE POLICY OWNER
LIFE SETTLEMENT PROVIDER OR BROKER
By: ___________________________
By: _______________________________
Printed Name:__________________
Printed Name:_______________________
Date:_________________________
Date:______________________________
1. New
					 section filed 7-29-2010 as an emergency; operative 7-29-2010. Emergency
					 regulation shall remain in effect, not to be repealed by the Office of
					 Administrative Law, unless repealed by the Department of Insurance pursuant to
					 Insurance Code section
					 10113.35
					 (Register 2010, No. 31).
2. Change without regulatory effect
					 amending NOTE filed 1-24-2012 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2012, No. 4).
3. Renumbering of former section
					 2548.28 to section
					 2548.29 and renumbering and
					 amendment of former section
					 2548.27 to new section
					 2548.28 filed 11-25-2014;
					 operative 1-1-2015 (Register 2014, No. 48).
Note: Authority cited: Section
						10113.35,
						Insurance Code; CalFarm Ins. Co. v. Deukmejian, 48 Cal.3d 805 (1989); 20th
						Century Ins. Co. v. Garamendi, 8 Cal.4th 216 (1994). Reference: Section
						10113.2,
						Insurance Code.