Section 626.8 - General rules(a) General rules.--A viatical settlement provider entering into a viatical settlement contract shall first obtain: (1) Prior to or at the time of execution of the viatical settlement contract, a witnessed document: (i) in which the viator consents to the viatical settlement contract;(ii) represents that the viator has a full and complete understanding of the viatical settlement contract, that he or she has a full and complete understanding of the benefits of the life insurance policy;(iii) acknowledges that he or she has entered into the viatical settlement contract freely and voluntarily;(iv) if applicable for the purposes of determining payments for persons who are terminally ill or chronically ill, acknowledges that the insured is terminally ill or chronically ill and that the terminal or chronic illness or condition was diagnosed after the life insurance policy was issued; and(v) acknowledges that he or she is of sound mind, under no constraint or undue influence.(2) A document in which the insured consents to the release of his or her medical records to a viatical settlement provider, viatical settlement broker and the insurance company that issued the life insurance policy covering the life of the insured. All records shall remain confidential.(3) If the viatical contract involves a life insurance policy that is being viaticated within the two-year period commencing with the date of the issuance of the insurance policy or certificate pursuant to section 9(2) , a document in which the insured consents to the tolling of the running of the policy's contestable period until after the insurer has completed its good faith investigation regarding the validity of the insurance contract.(b) Notice to insurer.--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 viatical settlement provider shall give written notice to the insurer that issued that insurance policy that the policy has or will become a viaticated policy. If the viator is terminally or chronically ill, the notice must be accompanied by a written statement from the viator required by subsection (a)(1)(iv).(c) Multiple viators.--If there is more than one viator on a single policy and the viators are residents of different states, the viatical settlement shall be governed by the law of the state in which the viator having the largest percentage ownership resides or, if the viators hold equal ownership, the state of residence of one viator agreed upon in writing by all viators.(d) Fiduciary responsibility of viatical settlement broker.--Notwithstanding the manner in which the viatical settlement broker is compensated, a viatical settlement broker is deemed to represent only the viator and owes a fiduciary duty to the viator to act according to the viator' s instructions and in the best interest of the viator.(e) Verification of coverage.-- (1) A viatical settlement provider or viatical settlement broker shall deliver a copy of the medical release required by subsection (a)(2), a copy of the viator's application for the viatical settlement contract, a copy of the notice required by subsection (b) and a request for verification of coverage to the insurer that issued the life insurance policy that is the subject of the viatical settlement transaction. The verification of coverage request shall be on a form substantially similar to the form developed by the department.(2) The insurer shall complete the verification of coverage form submitted by the viatical settlement provider or viatical settlement broker and transmit to the requesting party the completed verification of coverage form within a reasonable time frame, not to exceed 30 calendar days of the date the request is received. The completed verification of coverage form shall indicate whether, based on the medical evidence and documents provided, the insurer intends in good faith to pursue an investigation at that time regarding the validity of the insurance contract because of an actual or potential fraudulent viatical settlement act or other fraud.(3) Nothing in this section shall prohibit an insurer from exercising its right to contest the validity of any policy on the grounds of fraud.(f) Viatical settlement broker's performance acceptable.--If a viatical settlement broker performs the provisions enumerated in this section on behalf of a viatical settlement provider, the viatical settlement provider is deemed to have fulfilled the requirements of this section, provided that the viatical settlement provider shall remain responsible for any failure of the viatical settlement broker to have fulfilled the requirements of this section.(g) Health and financial information.--All health or financial information solicited or obtained by any licensee shall be subject to the applicable provision of Federal and State law relating to confidentiality and disclosure of such information.(h) Rescission.--All viatical settlement contracts entered into in this State shall provide the viator with an unconditional right to rescind the contract for 30 days from the date of contract and at least 15 calendar days from the receipt of the viatical settlement proceeds by the viator. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment to the viatical settlement provider of all viatical settlement proceeds.(i) Transfer of proceeds.--The viatical 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. Within three business days after the date the escrow agent receives the document, the proceeds of the viatical settlement shall be placed into an escrow or trust account maintained in a federally or State- 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 viatical settlement provider or related provider trust. Upon the licensed provider's receipt of the properly completed acknowledgment of the transfer of ownership, assignment or designation of beneficiary from the insurance company, the licensed provider shall instruct the escrow agent to pay the settlement proceeds to the viator. Payment shall be made within three business days of the date the provider received the acknowledged forms from the insurance company.(j) Deadline.--Failure to tender consideration to the viator for the viatical settlement contract within the time disclosed pursuant to section 7(a) or at all renders the viatical settlement contract voidable by the viator for lack of consideration until the time consideration is tendered to and accepted by the viator.(k) Health status.-- (1) Contacts with the insured for the purpose of determining the health status of the insured by the viatical settlement provider or viatical settlement broker after the viatical settlement has occurred shall only be made by the viatical settlement provider or broker licensed in this Commonwealth or its authorized representative and shall be limited to once every three months for insureds with a life expectancy of more than one year and to no more than once per month for insureds with a life expectancy of one year or less.(2) The viatical settlement provider or viatical settlement broker shall explain the procedure for these contacts at the time the viatical settlement contract is entered into.(3) 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.(l) Commission.--No viatical settlement broker shall receive from a viatical settlement provider a fee, commission or other valuable consideration for services rendered to or in connection with viators residing in this Commonwealth unless the viatical settlement provider is licensed in this Commonwealth.(m) Prohibition.--No person who invests in a viaticated policy or broker or provider, including, but not limited to, a participant in a financing transaction, shall influence the treatment of the insured's illness.2002, July 4, P.L. 699, No. 107, § 8, effective in 180 days.