Current through Register Vol. 24-06, March 15, 2024
All life settlement contracts as defined in
RCW
48.102.006(12) and
disclosure forms required by
RCW
48.102.080 must be filed with and be approved
by the commissioner prior to use in this state. No other forms shall be filed
with the commissioner.
(1)
(a) Life settlement providers must file with
the commissioner:
(i) Their life settlement
contract form completed in John Doe fashion; and
(ii) The disclosure form required by
RCW
48.102.080(1).
(b) The life settlement contract
form and disclosure form must be submitted as separate documents.
(c) Life settlement providers shall not file
any other forms with the commissioner.
(d) Life settlement providers must submit the
life settlement contract and disclosure forms filing through SERFF.
The SERFF filing instructions are in the SERFF Industry
Manual on the SERFF web site at www.serff.com and the Washington state SERFF Life
and Disability Rate and Form Filing General Instructions on the commissioner's
web site at: www.insurance.wa.gov.
(2)
(a)
Life settlement brokers must file with the commissioner:
(i) The disclosure form required by
RCW
48.102.080(1); and
(ii) The disclosure form required by
RCW
48.102.080(3).
(b) These two disclosure forms
must be submitted as separate documents.
(c) Life settlement brokers shall not file
any other forms with the commissioner.
(d) Life settlement brokers must submit their
disclosure form filings only in paper format.
(3)
(a)
Every life settlement contract shall be in writing, in a type size of no less
than ten points, shall be identified by a form number in the lower left-hand
corner of the first page, and include the terms under which the life settlement
provider will pay compensation (called by whatever name) to the owner in
exchange for the assignment, transfer, sole devise, or bequest of the death
benefit or assignment of ownership of the life insurance policy or certificate
to the life settlement provider.
(b) Every life settlement contract shall
provide for payment to the owner in a lump sum and shall be voidable at the
option of the owner if the agreed value is not paid in full within fifteen days
of the date the life settlement contract is executed by all parties
thereto.
(c) Every life settlement
contract shall provide for transfer of the entire life insurance policy:
Provided, however, That if agreed to in writing by both the insurer and the
owner, a stated dollar value which is less than the full face amount of the
life insurance policy (less any outstanding loans) may be transferred if:
(i) The life settlement provider obtains a
bond in favor of all beneficiaries of the policy other than the life settlement
provider in an amount sufficient to guarantee the payment of all premium for
the balance of the premium-paying period as calculated on the effective date of
the life insurance policy; or
(ii)
Another arrangement acceptable to the commissioner is made which guarantees
that the insurance policy will remain in full force and effect for the
protection of beneficiaries designated by the owner (other than the life
settlement provider) until the death of the insured.
(4) The life settlement contract
shall provide for rescission no less favorable to the owner than as set forth
in RCW
48.102.110(9). It shall
provide that if the insured dies during the period of time allowed for
rescission, the contract is considered rescinded subject to repayment by the
owner or the owner's estate of all proceeds and any premiums, loans, and loan
interest to the life settlement provider. The contract shall provide a method
for giving notice of rescission. If notice of rescission is given by mail, it
shall be deemed given when deposited in the United States mail, first class
postage prepaid.
(5) The life
settlement contract shall specify any effect entering into the contract will
have upon the 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 assigning the responsibility for the
continued payment of premiums. 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;
(d) Waiver of premium
or monthly deduction waiver; and
(e) Family, spousal, or children's riders or
benefits.
(6) No life
settlement contract may contain any limitation or restriction on the use of the
proceeds by the owner.
Statutory Authority:
RCW
48.02.060,
48.102.011,
48.102.046,
48.102.100,
48.102.170,
48.102.021,
48.102.041, and
48.102.080. 10-04-042 (Matter No.
R 2009-14), §
284-97-040, filed 1/27/10,
effective 2/27/10. Statutory Authority:
RCW
48.02.060,
48.30.010 and 1995 c 161
§§ 2, 4, 5 and 10. 95-22-016 (Order R 95-2), §
284-97-040, filed 10/20/95,
effective 11/20/95.
