The primary subject matter of this case concerns viatical settlements
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) established guidelines that make the proceeds from a viatical settlement
federal income tax free.
The DOI revoked the provider's license to operate as a viatical settlement
Virginia enacted its Viatical Settlements
Act in 1997 to address the state's concern with the "potential for exploitation of vulnerable and seriously ill individuals.
5) If the insured actually lives months, years, or decades longer than expected, the accelerated benefits or viatical settlement
continue to be excluded from income.
The settlement process begins when the viator executes a viatical settlement
application and provides authorization to the insured's attending physician and the issuing insurance company to disclose confidential information pertaining to the insured's health and insurance coverage.
As in all markets for mortality contingent contracts, viatical settlement
firms need to know the health of consumers to derive the actuarially fair price.
One way to defraud the investor is to sell a viatical knowing that the insured lied about his or her health condition when applying for the policy, as did one Florida viatical settlement
Senior Life Benefits and viatical settlements
were introduced to the membership a year ago.
Nearly every type of life insurance policy qualifies for a viatical settlement
, providing it's been in force for at least two years.
8) The initial sale of life insurance policies by terminally ill policyholders, known as viators,(9) to viatical settlement
companies is subject to varying amounts of regulation at the state level, typically by a state's insurance department.
Prior to the insurance industry entering into this market, private investors formed groups commonly known as Viatical settlement
companies for the purpose of purchasing, or taking assignments of, policies at a discount owned by the terminally ill.