Or. Admin. Code § 836-014-0250

Current through Register Vol. 63, No. 12, December 1, 2024

Section 836-014-0250 - Contents of Life Settlement Contracts

(1) In addition to the requirements of ORS 744.341, each life settlement contract must be in writing, in a type size of not less than 12 points, and written in clear, understandable and straightforward wording.

(2) A life settlement contract may not contain any limitation or restriction on the use of the proceeds by the policyholder or certificate holder.

(3) Each life settlement contract shall specify any effect that entering into the contract will have upon the continuation or continued availability of supplemental benefits or riders that are or may be attached to the life insurance policy that is the subject of the life settlement contract, including assignment of the responsibility for the continued payment of premiums. The contract must require the provider to pay the premium on supplemental benefits and riders added to the policy before the life settlement contract was entered, when so elected according to OAR 836-014-0260, and must require the provider to notify the former policyholder or certificate holder of any option that may arise to select any supplemental benefits or riders. The benefits and riders considered shall include, but need not be limited to, the following:

(a) Guaranteed insurability options;

(b) Accidental death benefits, or accidental death and dismemberment benefits;

(c) Disability income or loss of income protection; and

(d) Family, spousal or children's riders or benefits.

(4) The life settlement contract must provide for rescission by the policyholder or certificate holder entering the life settlement contract as set forth in ORS 744.341. The rescission provision must appear on the first page of the contract. The rescission period specified in 744.341 may not be less than 60 days after the date on which the contract is executed by all parties or less than 30 days after the date on which the policyholder or certificate holder receives the life settlement proceeds, whichever is the lesser period. The rescission provision must also provide that if the insured dies during the period of time for rescission:

(a) The contract is rescinded effective on the date of application; and

(b) The provider will return the amount by which the insurance proceeds according to the terms of the policy exceed the compensation paid by the provider pursuant to the life settlement contract and any premiums paid by the provider on the policy so that all parties, including any beneficiaries, are returned to their original positions under the insurance policy.

(5) A life settlement contract must provide a method for giving notice of rescission, including but not limited to the address or addresses to which the rescission notice must be sent, and a telephone number that the insured may call for information.

(6) All life settlement contracts, purchase agreement forms and applications for life settlements must contain the following statement or a substantially similar statement approved by the Director: "Any person who knowingly presents false information in this application is guilty of a crime and may be subject to fines and confinement in prison."

Or. Admin. Code § 836-014-0250

ID 3-1996, f. & cert. ef. 2-26-96; ID 14-1997, f. & cert. ef. 10-17-97; ID 15-2006, f. & cert. ef. 7-27-06; ID 1-2010, f. & cert. ef. 1-5-10

Stat. Auth.: ORS 744.358

Stats. Implemented: ORS 744.341