THE SENATE

S.B. NO.

3062

TWENTY-SIXTH LEGISLATURE, 2012

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to insurance.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. Chapter 431, article 8, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"431:8- Viatical settlements. (a) No person shall act as, be appointed as, or hold oneself out to be a viatical settlement provider without first obtaining a viatical settlement provider license from the commissioner.

(b) The commissioner shall:

(1) Establish appropriate licensing requirements, fees, and standards for licensure for viatical settlement providers;

(2) Establish standards for evaluating the reasonableness of payments under a viatical settlement contract. The standards shall include regulation of discount rates used to determine the amount paid in exchange for assignment, transfer, sale, devise, or bequest of a benefit under a policy;

(3) Require a bond or other mechanism for financial accountability for a viatical settlement provider;

(4) Adopt rules governing the relationship and responsibilities of an insurer, a viatical settlement provider, and others in the business of viatical settlements during the period of consideration or effectuation of a viatical settlement contract; and

(5) Adopt other rules as necessary to carry out the purposes of this section.

(c) As used in this section:

"Viatical settlement contract" means a written agreement entered into between a viatical settlement provider and a viator in which the provider will pay consideration that is less than the expected death benefit of the viator's policy in return for the viator's assignment, transfer, sale, devise, or bequest of the death benefit or ownership of the policy to the provider.

"Viatical settlement provider" means a person or entity, other than a viator, who enters into or effectuates a viatical settlement contract.

"Viator" means the owner or holder of a policy who has a terminal illness or condition and who enters into a viatical settlement contract."

SECTION 2. Section 431:2-303, Hawaii Revised Statutes, is amended to read as follows:

"431:2-303 Examination of producers, adjusters, promoters, [and] independent bill reviewers[.], and viatical settlement providers. For the purpose of ascertaining its condition, or compliance with this code, the commissioner may as often as the commissioner deems advisable examine the insurance accounts, records, documents, and transactions of:

(1) Any insurance producer, adjuster, or independent bill reviewer, including insurance agencies and surplus lines agencies; [or]

(2) Any person engaged in, proposing to be engaged in, or assisting in the promotion or formation of a domestic insurer, a stock corporation to finance a domestic mutual insurer or the production of its business, or a corporation to be attorney-in-fact for a domestic reciprocal insurer[.]; or

(3) Any viatical settlement provider who enters into or effectuates a viatical settlement contract."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Insurance; Insurance Commissioner; Viatical Settlements

 

Description:

Requires viatical settlement providers to be licensed by the insurance commissioner. Requires the insurance commissioner to establish licensing requirements, fees, and standards for viatical settlement providers. Permits the commissioner to examine the insurance accounts, records, documents, and transactions of viatical settlement providers.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.