(a) It is a violation of this chapter for any person to enter into a viatical settlement contract at any time prior to the application or issuance of a policy that is the subject of viatical settlement contract or within a period of time established by rule, unless the viator certifies to the viatical settlement provider that one (1) or more of the following conditions have been met within the prescribed period:

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Terms Used In Tennessee Code 56-50-111

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Chronically ill: means :
    (A) Being unable to perform at least two (2) activities of daily living. See Tennessee Code 56-50-102
  • Commissioner: means the commissioner of commerce and insurance. See Tennessee Code 56-50-102
  • Contract: A legal written agreement that becomes binding when signed.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Person: means a natural person or a legal entity, including, but not limited to, an individual, partnership, limited liability company, association, trust or corporation. See Tennessee Code 56-50-102
  • Policy: means an individual or group policy, group certificate, contract or arrangement of life insurance owned by a resident of this state, regardless of whether delivered or issued for delivery in this state. See Tennessee Code 56-50-102
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Trustee: A person or institution holding and administering property in trust.
  • Viatical settlement broker: means a person, including a life insurance producer, as provided for in §. See Tennessee Code 56-50-102
  • Viatical settlement contract: includes a premium finance loan made for a life insurance policy by a lender to a viator on, before or after the date of issuance of the policy where:
    (i) The viator or the insured receives on the date of the premium finance loan a guarantee of a future viatical settlement value of the policy. See Tennessee Code 56-50-102
  • Viatical settlement provider: means a person, other than a viator, that enters into or effectuates a viatical settlement contract with a viator resident in this state. See Tennessee Code 56-50-102
  • viator: includes , but is not limited to, an owner of a life insurance policy or a certificate holder under a group policy insuring the life of an individual with a terminal or chronic illness or condition except where specifically addressed. See Tennessee Code 56-50-102
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) The policy was issued upon the viator’s exercise of conversion rights arising out of a group or individual policy; provided, that the total of the time covered under the conversion policy plus the time covered under the prior policy is at least the prescribed period. The time covered under a group policy shall be calculated without regard to any change in insurance carriers; provided, that the coverage has been continuous and under the same group sponsorship;
(2) The viator submits independent evidence to the viatical settlement provider that one (1) or more of the following conditions have been met within the prescribed period:

(A) The viator or insured is terminally or chronically ill;
(B) The viator’s spouse dies;
(C) The viator divorces the viator’s spouse;
(D) The viator retires from full-time employment;
(E) The viator becomes physically or mentally disabled and a physician determines that the disability prevents the viator from maintaining full-time employment; or
(F) A final order, judgment or decree is entered by a court of competent jurisdiction, on the application of a creditor of the viator, adjudicating the viator bankrupt or insolvent, or approving a petition seeking reorganization of the viator or appointing a receiver, trustee or liquidator to all or a substantial part of the viator’s assets; or
(3) Such other exemptions as may be prescribed by rule.
(b) Copies of the independent evidence described in subdivision (a)(2) and documents required by § 56-50-110(a) shall be submitted to the insurer when the viatical settlement provider submits a request to the insurer for verification of coverage. The copies shall be accompanied by a letter of attestation from the viatical settlement provider that the copies are true and correct copies of the documents received by the viatical settlement provider.
(c) If the viatical settlement provider submits to the insurer a copy of the owner or insured’s certification described in and the independent evidence required by subdivision (a)(2) when the provider submits a request to the insurer to effect the transfer of the policy or certificate to the viatical settlement provider, the copy shall be deemed to conclusively establish that the viatical settlement contract satisfies the requirements of this section and the insurer shall timely respond to the request.
(d) No insurer may, as a condition of responding to a request for verification of coverage or effecting the transfer of a policy pursuant to a viatical settlement contract, require that the viator, insured, viatical settlement provider or viatical settlement broker sign any forms, disclosures, consent or waiver form that has not been expressly approved by the commissioner for use in connection with viatical settlement contracts in this state.
(e) Upon receipt of a properly completed request for change of ownership or beneficiary of a policy, the insurer shall respond in writing within thirty (30) calendar days with written acknowledgement confirming that the change has been effected or specifying the reasons why the requested change cannot be processed. The insurer shall not unreasonably delay effecting change of ownership or beneficiary and shall not otherwise seek to interfere with any viatical settlement contract lawfully entered into in this state.
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