Disclaimer: The following is an overview of the laws pertaining to the VSP licensing requirements.  Refer to the OSCN webpage to research all the statues pertaining to the Viatical Settlement Act of 2008.

Regulations 36 O.S. § 4055.1 – 4055.17 and Rules 365:25-11

Statutes

Definitions 36 O.S. § 4055.2 and 365:25-11

As used in the Viatical Settlements Act of 2008:

“Business of viatical settlements” means an activity involved in, but not limited to, the offering, soliciting, negotiating, procuring, effectuating, purchasing, investing, financing, monitoring, tracking, underwriting, selling, transferring, assigning, pledging, hypothecating or in any other manner acquiring an interest in a life insurance policy by means of a viatical settlement contract;

“Commissioner” means the Insurance Commissioner of the State of Oklahoma;

“Life insurance producer” means any person licensed in this state as a resident or nonresident insurance producer who has received qualification or authority for life insurance coverage or a life line of coverage pursuant to the Oklahoma Producer Licensing Act;

“Person” means a natural person or a legal entity, including, without limitation, an individual, partnership, limited liability company, association, trust, or corporation;

“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;

“Related provider trust” means a titling trust or other trust established by a licensed viatical settlement provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction.

“Terminally ill” means having an illness or sickness that can reasonably be expected to result in death in twenty-four (24) months or less;

“Viatical settlement broker” means a person, including a life insurance producer as provided for in Section 3 of Enrolled Senate Bill No. 1980 of the 2nd Session of the 51st Oklahoma Legislature, who working exclusively on behalf of a viator and for a fee, commission or other valuable consideration, offers or attempts to negotiate viatical settlement contracts between a viator and one or more viatical settlement providers or one or more viatical settlement broker.

“Viatical settlement contract” means a written agreement between a viator and a viatical settlement provider or any affiliate of the viatical settlement provider establishing the terms under which compensation or anything of value is or will be paid, which compensation or value is less than the expected death benefits of the policy, in return for the viator’s present or future assignment, transfer, sale, devise or bequest of the death benefit or ownership of any portion of the insurance policy or certificate of insurance. Viatical settlement contract also means the transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns such policy if the trust or other entity was formed or availed of for the principal purpose of acquiring one or more life insurance contracts, which life insurance contracts insure the life of a person residing in this state.

“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.

“Viatical settlement purchaser” means a person who provides a sum of money as consideration for a life insurance policy or an interest in the death benefits of a life insurance policy, or a person who owns or acquires or is entitled to a beneficial interest in a trust that owns a viatical settlement contract or is the beneficiary of a life insurance policy that has been or will be the subject of a viatical settlement contract, for the purpose of deriving an economic benefit.

“Viaticated policy” means a life insurance policy or certificate that has been acquired by a viatical settlement provider pursuant to a viatical settlement contract; and

“Viator” means the owner of a life insurance policy or a certificate holder under a group policy who resides in this state and enters or seeks to enter into a viatical settlement contract.

Definitions 365:25-11

1. “Act” means the Viatical Settlements Act of 2008.
2. “Insured” means the person covered under the policy being considered for viatication.
3. “Life expectancy” means the mean of the number of months the individual insured under the life insurance policy to be viaticated can be expected to live as determined by the viatical settlement provider considering medical records and appropriate experiential data.
4. “Net death benefit” means the amount of the life insurance policy or certificate to be viaticated less any outstanding debts or liens.
5. “Patient identifying information” means an insured’s address, telephone number, facsimile number, electronic mail address, photograph or likeness, employer, employment status, social security number, or any other information that is likely to lead to the identification of the insured.

License Fees:

Cycle – Annual

Fees

Initial Licensure $500
Renewal Licensure $500

Licensing Requirements 36 O.S. § 4055.3.

A person shall not operate as a viatical settlement provider without first obtaining a license from the Insurance Commissioner of the state of residence of the viator.

• Provided a detailed plan of operation.
• Applicant is competent and trustworthy and intends to act in good faith and has a good business reputation and has had experience, training, or education so as to be qualified in the business for which the license is applied for.
• Provide evidence of one of the financial responsibilities listed below.  The policy, bond, deposit or combination thereof shall not be terminated without thirty (30) days prior written notice to the licensee and the commissioner.

1. 1. a surety bond executed and issued by an insurer authorized to issue surety bonds in this state,
   2. a policy of errors and omissions insurance issued in accordance with Oklahoma law by an insurer authorized to do business in Oklahoma, or
   3. a deposit of cash, certificates of deposit or securities or any combination thereof in the amount of Fifty Thousand Dollars ($50,000.00).

• A license issued to a legal entity authorizes all partners, officers, members and designated employees to act as viatical settlement providers, under the license, and all those persons shall be named in the application and any supplements to the application;
• Submit an antifraud plan that meets the requirements of subsection G of Section 13 of Enrolled Senate Bill No. 1980 of the 2nd Session of the 51st Oklahoma Legislature.
• Provide a list of officers, ten percent (10%) or more stockholders, partners, directors, members, or designated employees. Entity is required to notify the OID within thirty (30) days of any change to this information.

Additional requirement for a non-resident entity:

• Provide a certificate of good standing from the state of its domicile.
• Complete the NAIC UCAA 12 Service of Process form and pay the $10.00 fee with Initial application or later within 30 days of any changes to the information.

Requirements for Renewal 36 O.S. § 4055.3(C) (365:25-11-3)

The license shall be renewed annually prior to the expiration date on the license, along with a fee of Five Hundred Dollars ($500.00).  Application is required to be submitted electronically via OPTins.   Failure to submit a renewal application prior to the expiration date will result in the license expiring.

Annual Statement Filing & Confidentiality 36 O.S. § 4055.6 and 365:25-11-5.

Due date – March 1^st annually

Each viatical settlement provider shall file with the Insurance Commissioner on or before March 1 of each year an annual statement filing. The information shall be limited to only those transactions where the viator is a resident of this state.  Individual transaction data regarding the business of viatical settlements or data that could compromise the privacy of personal, financial and health information of the viator or insured shall be filed with the Commissioner on a confidential basis.

The following is required for any policy settled within five (5) years of the date of issuance of the policy:

• the total number of policies
• aggregate face amount and life settlement proceeds of policies settled during the immediately preceding calendar year
• breakdown of the information by policy-issue year
• A report of the individual mortality of Oklahoma insureds
• A certification of the information contained in the reports

Records Retention 36 O.S. § 4055.7

Retain for five (5) years for all settled policies and for two (2) years for all policies which are not settled retain copies of all:

• proposed, offered or executed contracts, purchase agreements, underwriting documents, policy forms, and applications from the date of the proposal, offer or execution of the contract or purchase agreement, whichever is later,
• all checks, drafts, electronic payment or other evidence and documentation related to the payment, transfer, deposit or release of funds from the date of the transaction, and
• all other records and documents related to the requirements of the Viatical Settlements Act of 2008.

This subsection does not relieve a person of the obligation to produce these documents to the Commissioner after the retention period has expired if the person has retained the documents.

Records required to be retained by this subsection must be legible and complete and may be retained in paper, photograph, microprocess, magnetic, mechanical, or electronic media, or by any process that accurately reproduces or forms a durable medium for the reproduction of a record.

Anti-Fraud Initiative 36 O.S. 4055.13.

Viatical settlement providers shall have in place antifraud initiatives reasonably calculated to detect, prosecute and prevent fraudulent viatical settlement acts. At the discretion of the Commissioner, the Commissioner may order, or a licensee may request and the Commissioner may grant, such modifications of the following required initiatives as necessary to ensure an effective antifraud program. The modifications may be more or less restrictive than the required initiatives so long as the modifications may reasonably be expected to accomplish the purpose of this section.

Antifraud initiatives shall include:

• fraud investigators, who may be viatical settlement provider or viatical settlement broker employees or independent contractors, and
• an antifraud plan, which shall be submitted to the Commissioner. The antifraud plan shall include, but not be limited to:
  1. a description of the procedures for detecting and investigating possible fraudulent viatical settlement acts and procedures for resolving material inconsistencies between medical records and insurance applications,
  2. a description of the procedures for reporting possible fraudulent viatical settlement acts to the Commissioner,
  3. a description of the plan for antifraud education and training of underwriters and other personnel, and
  4. a description or chart outlining the organizational arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent viatical settlement acts and investigating unresolved material inconsistencies between medical records and insurance applications.

Antifraud plans submitted to the Commissioner shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action.

Standards for evaluation of reasonable payments for terminally ill insureds 365:25-11-4.1.

To assure that viators receive a reasonable return for viaticating an insurance policy, the return for viaticating a policy shall be no less than the following payouts for insureds who are terminally ill:

Insured’s Life Expectancy	Minimum Percentage of Face Value Less Outstanding Loans Received by Viator
Less than 6 months	80%
At least 6 but less than 12 months	70%
At least 12 but less than 18 months	65%
At least 18 but less than 25 months	60%

Viatical Settlement Provider Forms

Viatical Settlement Provider Application
Initial Application Checklist
Renewal Application Checklist
VSP Surety Bond
License Surrender Form