BILL NUMBER: SB 98	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Calderon

                        JANUARY 26, 2009

   An act to amend Section 10113.1 of the Insurance Code, relating to
viatical settlements.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 98, as introduced, Calderon. Viatical settlements.
   Existing law excludes from the definition of a viatical settlement
an assignment of a life insurance policy to a licensed lending
institution or credit union as collateral for a loan.
   This bill would specify that an assignment of a life insurance
policy to a licensed lending institution or credit union as
collateral for loans is also excluded from the definition of a
viatical settlement.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 10113.1 of the Insurance Code is amended to
read:
   10113.1.  (a) (1) As used in this section, a "viatical settlement"
means an agreement entered into between a person owning a life
insurance policy upon the life of a person with a catastrophic or
life-threatening illness or condition and another person by which the
policy owner receives compensation or anything of value less than
the death benefits of the insurance policy in return for an
assignment, transfer, sale, devise, or bequest of the death benefits
or ownership of the insurance policy, but does not include an
assignment of a life insurance policy to a licensed lending
institution or credit union as collateral for a loan  or loans
 .
   (2) As used in this section, "person" means any natural person or
legal entity including, but not limited to, individuals,
partnerships, associations, trusts, or corporations including a
resident or nonresident life and disability insurance agent licensed
by the commissioner.
   The life and disability insurance agents shall file with the
commissioner a declaration that the person's life and disability
agent license is valid and in good standing. The life and disability
insurance agent shall provide copies of all endorsements and
appointments received by the agent to engage in the business of
viatical settlements. If the commissioner determines that the agent's
life and disability agent license is invalid or not in good
standing, or the agent has failed to submit any fees or proper
endorsements or appointments, the commissioner may suspend the agent'
s ability to transact or otherwise be involved in viatical
settlements.
   (b) A viatical settlement shall not include a provision for
payment of cash surrender values, loans or other benefits made by an
insurer in accordance with the policy provisions.
   (c) Any person entering into a viatical settlement with any person
with a catastrophic or life-threatening illness or condition shall
first obtain the following:
   (1) A written statement from a licensed medical practitioner
attending the person that the person is of sound mind and under no
constraint or undue influence.
   (2) A duly witnessed signed document in which the person consents
to the viatical settlement, acknowledges the catastrophic or
life-threatening illness, represents that he or she has a full and
complete understanding of the viatical settlement, that he or she has
a full and complete understanding of the benefits of the life
insurance policy, a release of his or her medical records, and
acknowledges that he or she has entered into the settlement freely
and voluntarily.
   (d) No person domiciled, residing or conducting business in
California may do any of the following unless he or she has complied
with subdivision (c):
   (1) Enter into a viatical settlement with any person, domiciled or
residing in California.
   (2) Execute a viatical settlement in whole or in part in this
state.
   (e) A violation of this section is a misdemeanor.