Section 626.9 - Prohibited practicesIt is a violation of this act for any person to:
(1) Enter into a viatical settlement contract the subject of which is a life insurance policy that the licensee knew or should have known was obtained by means of a false, deceptive or misleading application for the life insurance policy.(2) Enter into a viatical settlement contract within a two-year period commencing with the date of issuance of the insurance policy or certificate unless the viator certifies to the viatical settlement provider that one of the following conditions has been met within the two-year period:(i) The policy was issued upon the owner's exercise of conversion rights arising out of a group or individual policy, provided the total of the time covered under the conversion policy plus the time covered under the group policy is at least 24 months. The time covered under the group or individual policy shall be calculated without regard to any change in insurance carriers, provided the coverage has been continuous and under the same group sponsorship.(ii) The viator is not a natural person (e.g., the viator is a corporation, limited liability company, partnership, etc.).(iii) A sworn statement by the viator and insured is submitted to the viatical settlement provider, certifying that one or more of the following conditions have been met within the two-year period:(A) The viator or insured is terminally or chronically ill.(B) The viator's or insured's spouse dies.(C) The viator or insured divorces his or her spouse.(D) The viator was the insured's employer at the time the policy or certificate was issued and the employment relationship has terminated.(E) The viator experiences a significant decrease in income that impairs the viator's reasonable ability to pay the policy premium.(F) The viator or insured disposes of his or her ownership interests in a closely held corporation. The sworn statement shall be submitted by the viator or insured to the insurer when the viatical settlement provider submits a request to the insurer for verification of coverage pursuant to section 8(d) . The documents shall be accompanied by a letter of attestation from the viatical settlement provider that the copies are true and correct copies received by the viatical settlement provider.
(iv) The viatical settlement provider submits to the insurer a copy of the owner or insured's certification described in subparagraph (iii) when the provider submits a request to the insurer to effect the transfer of the policy or certificate to the viatical settlement provider. The certification 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.(v) A financing entity is a party to a viatical settlement contract to which a licensed viatical settlement provider is not a party or to a viatical settlement purchase agreement.(vi) A special purpose entity enters into a viatical settlement contract.2002, July 4, P.L. 699, No. 107, § 9, effective in 180 days.