408-D:11 General Rules. –
I. (a) A life settlement provider entering into a life settlement contract shall first obtain:
(1) If the viator is the insured, a written statement from a licensed attending physician that the viator is of sound mind and under no constraint or undue influence to enter into a life settlement contract; and
(2) A document in which the insured consents to the release of his or her medical records to a licensed life settlement provider, life settlement producer, and the insurance company that issued the life insurance policy covering the life of the insured.
(b) Within 20 days after a viator executes documents necessary to transfer any rights under an insurance policy or within 20 days of entering any agreement, option, promise, or any other form of understanding, expressed or implied, to viaticate the policy, the life settlement provider shall give written notice to the insurer that issued that insurance policy that the policy has or will become a viaticated policy. The notice shall be accompanied by the documents required by subparagraph (c).
(c) The life settlement provider shall deliver a copy of the medical release required under subparagraph (a)(2), a copy of the viator's application for the life settlement contract, the notice required under subparagraph (b) and a request for verification of coverage to the insurer that issued the life policy that is the subject of the life transaction. The NAIC's form for verification of coverage shall be used unless another form is developed and approved by the commissioner.
II. The insurer shall respond to a request for verification of coverage submitted on an approved form by a life settlement provider or life settlement producer or life insurance producer within 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 or possible fraud. The insurer shall accept a request for verification of coverage made on an NAIC form or any other form approved by the commissioner. The insurer shall accept an original or facsimile or electronic copy of such request and any accompanying authorization signed by the viator. Failure by the insurer to meet its obligations under this paragraph shall be a violation of RSA 408-D:12 and RSA 408-D:16.
III. Prior to or at the time of execution of the life settlement contract, the life settlement provider shall obtain a witnessed document in which the viator consents to the life settlement contract, represents that the viator has a full and complete understanding of the life settlement contract, 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 life settlement contract 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.
IV. A life settlement producer may perform any of the requirements of this section on behalf of the life settlement provider.
V. All medical information solicited or obtained by any licensee shall be subject to the applicable provisions of state law relating to confidentiality of medical information.
VI. All life settlement contracts entered into in this state shall provide the viator with an absolute right to rescind the life settlement contract before the earlier of 30 calendar days after the date upon which the life settlement contract is executed by all parties or 15 calendar days after the life settlement proceeds have been sent to the viator as provided in RSA 408-D:9, I(f). Rescission by the viator may be conditioned upon the viator both giving notice and repaying to the life settlement provider within the rescission period all proceeds of the settlement and any premiums, loans, and loan interest paid by or on behalf of the life settlement provider in connection with or as a consequence of the life settlement contract. If the insured dies during the rescission period, the life settlement contract shall be deemed to have been rescinded, subject to repayment to the life settlement provider or life settlement purchaser of all life settlement proceeds, and any premiums, loans, and loan interest that have been paid by the life settlement provider or life settlement purchaser, which shall be paid within 60 calendar days of the death of the insured. In the event of any rescission, if the life settlement provider has paid commissions or other compensation to a life settlement producer in connection with the rescinded transaction, the life settlement producer shall refund all such commissions and compensation to the life settlement provider within 5 business days following receipt of written demand from the life settlement provider, which demand shall be accompanied by either the viator's notice of rescission if rescinded at the election of the viator, or notice of the death of the insured if rescinded by reason of the death of the insured within the applicable rescission period.
VII. The life 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.
VIII. Within 3 business days after the date the escrow agent receives the document, (or from the date the life settlement provider receives the documents), if the viator erroneously provides the documents directly to the life settlement provider, the life settlement provider shall pay or transfer the proceeds of the life settlement 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 life settlement provider or related provider trust or other designated representative of the life settlement provider. 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.
IX. Failure to tender consideration to the viator for the life settlement contract within the time set forth in the disclosure pursuant to RSA 408-D:9, I(f) renders the life settlement contact voidable by the viator for lack of consideration until the time consideration is tendered to and accepted by the viator. Funds shall be deemed sent by a life settlement provider to a viator as of the date that the escrow agent either releases funds for wire transfer to the viator or places a check for delivery to the viator via United States Postal Service or other nationally recognized delivery service.
X. Contacts with the insured for the purpose of determining the health status of the insured by the life settlement provider or life settlement producer after the life settlement has occurred shall only be made by the life settlement provider or life settlement producer licensed in this state or its authorized representatives and shall be limited to once every 3 months for insureds with a life expectancy of more than one year, and to no more than once a month for insureds with a life expectancy of one year or less. The life settlement provider or life settlement producer shall explain the procedure for these contacts at the time the life settlement contract 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. Life settlement providers and life settlement producers shall be responsible for the actions of their authorized representatives.