SB 185 (BR 1620) - C. Borders
AN ACT relating to life insurance.
Amend KRS 304.15-020 to define terms; amend KRS 304.15-700 to set forth certain requirements for applicants for a viatical settlement broker license; to require the Commissioner of the Department of Insurance to promulgate administrative regulations; to require a provider to give a copy of any trust agreement to the commissioner; to establish a fiduciary responsibility for the viatical settlement broker to the viator; create new sections of subtitle 15 of KRS Chapter 304 to establish that the provider is responsible for the actions of the broker; amend KRS 304.15-705 to require that viatical records transactions be maintained for 5 years; to establish that the Kentucky Secretary of State receive service of lawful process; amend KRS 304-15-715 to require all parties to give prior written notice before assignment; to require a provider to notify the insurer when a policy has been viaticated within 10 days of the rescission period; create new sections of subtitle 15 of KRS Chapter 304 to require the department to issue cease and desist orders for cause; to allow the department to impose and collect administrative fines for violations of a cease and desist order; to establish what are unlawful acts regarding viaticals; to disallow a broker from receiving a finder's fee and commission; to require a viatical settlement transaction to be completed through an independent third-party trustee; to establish that a viatical settlement contract is rescinded if the insured dies during the rescission period; to establish that if the time or amount under an accelerated benefits provision is equal to or greater than the viatical settlement the settlement is prohibited from being negotiated; to allow the commissioner to seek an injunction to prevent further violations; to allow a civil cause of action; to establish that the 2 year incontestability period does not apply to viatical transactions if all medical conditions are not disclosed; amend KRS 304.15-710 to require full disclosure and a consumer guide to be provided on the date the contract is signed and additional disclosures required; create a new section of subtitle 15 of KRS Chapter 304 to establish that only 1 trust can be utilized and that the trustee will be the settlement provider and will be liable and responsible for the performance of all obligations of the trust; amend KRS 304.42-190 to prohibit the use of the Kentucky Guaranty Association as an inducement to purchase; create new sections of subtitle 99 of KRS Chapter 304 to require that a licensee will conclude affairs and will not solicit, negotiate, or effectuate new contracts in the event of suspension of the license; to establish that civil fines for each violation can range from $1,000 to $25,000; to require the department to refer violations to the Division of Insurance Fraud Investigation if appropriate.
Feb 2-introduced in Senate
Feb 4-to Banking and Insurance (S)