Or. Admin. Code § 836-014-0260

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

Section 836-014-0260 - Rights and Duties of Parties to Life Settlement Contract

(1) A policyholder or certificate holder who has entered a life settlement contract has the right to retain additional benefits or optional riders that were part of the life insurance policy, including but not limited to disability income, accidental death and dismemberment and spouse, children and family riders, but not including term riders. Any premiums payable on the insurance policy or certificate that is the subject of the life settlement contract, including premiums payable for additional benefits retained at the option of the policyholder or certificate holder, shall be paid by the life settlement provider when due, for the remaining duration of the life that is the subject of the life settlement contract.

(2) Except as provided in this section (2), any additional benefit or optional rider that the policyholder or certificate holder elects not to continue must be terminated when the life settlement takes place. A waiver of premium provision may be continued by the life settlement provider.

(3) The life settlement provider does not have the right to any cash surrender value unless all additional benefits retained by the policyholder or certificate holder, whether by rider or endorsement, are in a paid-up status and will be unaffected by any change in cash surrender value.

(4) The life settlement provider shall make the payment of proceeds of a life settlement to an escrow agent as required in Section 13, chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973) by means of wire transfer or by cashier's check.

(5) Any policyholder or certificate holder who enters into a life settlement contract has the right to rescind the contract not later than the 60th day after the date on which the contract is executed by all parties or not later than the 30th day after the date the policyholder or certificate holder receives the life settlement proceeds, whichever is the lesser period. Not later than the date on which the life settlement proceeds are paid to the policyholder or certificate holder, the life settlement provider must give the policyholder or certificate holder a written statement of the date on which the rescission period expires. The statement must include a notice to the policyholder or certificate holder that a rescission is not complete until the full payment, including any premiums paid by the life settlement provider, is returned to the life settlement provider and that the full payment must be returned not later than the 30th day after the date specified for expiration of the rescission period.

(6) If the statement required in section (5) of this rule is given by mail, it shall be considered to be given when deposited in the United States mail, first class postage prepaid.

(7) If notice of rescission is given by mail, it shall be considered to be given when deposited in the United States mail, first class postage prepaid.

(8) A life settlement broker represents exclusively the owner, and not the insurer or the life settlement provider, and owes a fiduciary duty to the owner, including a duty to act according to the owner's instructions and in the best interest of the owner.

(9) The life settlement investment agent does not have the right to have any contact with the owner or insured under a policy or to any knowledge of the identity of the owner or insured.

Or. Admin. Code § 836-014-0260

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, Sec. 11, Ch. 711, OL 2009