SB 66 — AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO VIATICAL AND LIFE SETTLEMENTS.
Last action — Signed by Governor
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✓Introduced
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✓In Committee
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✓Passed Senate
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✓Passed House
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✓To Executive
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6Enacted
This bill has been enacted into law. Introduced April 25, 2017. Enacted.
Odds of enactment
High chanceBased on the sponsor, cosponsors, and committee posture, this bill has a high chance of becoming law.
Upgrade to see the exact probability and what's driving it.
A statistical estimate from our own model of past outcomes — an insight, not a guarantee. Policymaking is volatile.
Prognosis
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Enacted
Current position in the legislative process.
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3 sponsors
2 primary, 1 co-sponsors signed on.
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Cleared a recorded vote
Passed 2 recorded votes so far.
Based on stage, sponsorship breadth, committee status, recorded votes, and cross-state momentum — a description of the observable signals, not a prediction.
Summary
On June 30, 2016, the Delaware State Senate adopted Senate Resolution No. 19 (“S.R. 19”), requesting the Delaware Department of Insurance (the “Department”) to examine the secondary market for life insurance policies and make recommendations for possible legislation. In response to S.R. 19, the Department issued a report in December 2016 recommending the adoption of the Model Viatical Settlements Act adopted by the National Association of Insurance Commissioners (“NAIC”). This bill significantly modifies 18 Del. C. Chapter 75, the Delaware Viatical Settlements Act by adopting the NAIC Model. This bill establishes strong consumer protections while protecting policyholder rights. Key provisions include: • The bill significantly expands the class of persons, known as “viators,” who are permitted to enter into viatical settlement contracts. Under present law, viators are defined as individuals with a catastrophic, life threatening or chronic illness or condition. This physical condition restriction is eliminated in this bill (Section 7502(20)). • A limited 5 year settlement prohibition targeting transactions with characteristics of stranger-originated life insurance, such as non-recourse financing, settlement guarantees, or life expectancy valuations. (Section 7511). • Protection of consumer property rights by permitting any-time settlements for cause such as death of spouse, divorce, disability, bankruptcy, loss of job, or chronic or terminal illness (Section 7511), and by requiring full disclosure to the prospective viator (Section 7508). • Expanded consumer right to rescind a settlement contract for up to 60 days (Section 7510(c)). • Settlement reporting requirements to enable regulators to identify and stop stranger-originated life insurance (Section 7506). • Prohibition on advertising representing that insurance is “free” or at “no cost” (Sections 7512(d) and 7513(e)). • Disclosure to insurers of any plan to originate, renew, or finance a policy prior to or within 5 years of policy issue (Section 7509). • A comprehensive definition of “viatical settlement contract” which includes policy transfers regardless of when they occur if they include indicia of stranger-originated life insurance, and transfers which do not fall within a legitimate settlement exception, such as non-recourse financing arrangements, debt forgiveness, or settlement guarantees (Section 7502(15)). • The bill contains fraud prevention and control measures, grants regulatory authority to the Insurance Commissioner to address violations of the Act through the issuance of cease and desist orders, imposition of civil penalties, petitions for injunctive relief, and other enforcement measures. The bill also allows persons injured by violations of the Act to bring civil actions, and allows the Attorney General to seek criminal penalties for “fraudulent viatical acts,” as defined in the Act. The criminal penalties in the current version of the bill are based on the penalties for theft in 11 Del. C. § 841. The bill expressly states that it does not preempt the authority or relieve the duty of the Attorney General or any other law enforcement or regulatory agencies to investigate, examine, and prosecute suspected violations of law. • Section 7518 of the bill provides that nothing in this chapter preempts any provision of the Delaware Securities Act, as amended, including the regulation of securities transactions in viatical settlement investments and the licensing of any person or entity engaged in the sale of securities. Enactment of the NAIC Model will provide regulators with strong and important tools to combat stranger-originated life insurance and the fraudulent behavior it engenders, while continuing to allow honest policyholders to exercise all of their individual and contractual rights.
Bill Text
- Bill Text View text Current pdf
Action History
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Signed by Governor
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Passed By House. Votes: 41 YES
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Reported Out of Committee (Economic Development/Banking/Insurance/Commerce) in House with 10 On Its Merits
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Assigned to Economic Development/Banking/Insurance/Commerce Committee in House
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Passed By Senate. Votes: 20 YES 1 ABSENT
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Passed By Senate. Votes: 20 YES 1 ABSENT
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Reported Out of Committee (Banking, Business & Insurance) in Senate with 1 Favorable, 3 On Its Merits
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Introduced and Assigned to Banking, Business & Insurance Committee in Senate
Sponsors
- Bruce C. Ennis · Cosponsor
- Bryon H. Short · Primary
- Brian J. Bushweller · Primary
Sponsorship breakdown
Export CSV (upgrade) →2 sponsors · 1 co-sponsors · 59 not signed on
Sponsors (2)
Co-sponsors (1)
Not signed on (59)
59 members have not signed on to this bill.
Show all 59 →"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.
Votes
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 25 | 0 | 0 | 0 |
| Democratic | 7 | 0 | 0 | 0 |
| Republican | 9 | 0 | 0 | 0 |
| Total | 41 | 0 | 0 | 0 |
| % of votes cast | 100% | 0% | 0% | 0% |
How each member voted (41)
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 11 | 0 | 0 | 1 |
| Democratic | 5 | 0 | 0 | 0 |
| Republican | 4 | 0 | 0 | 0 |
| Total | 20 | 0 | 0 | 1 |
| % of votes cast | 95% | 0% | 0% | 5% |
How each member voted (21)
| Member | Party | Vote |
|---|---|---|
| Anthony Delcollo | — | Yea |
| Brian J. Bushweller | — | Yea |
| Bruce C. Ennis | — | Yea |
| Catherine Cloutier | — | Yea |
| Colin Bonini | — | Not Voting |
| David B. McBride | — | Yea |
| Ernesto B Lopez | — | Yea |
| F. Gary Simpson | — | Yea |
| Gregory F. Lavelle | — | Yea |
| Harris B. McDowell | — | Yea |
| Margaret Rose Henry | — | Yea |
| Robert Marshall | — | Yea |
| Bryan Townsend | Democratic | Yea |
| David P. Sokola | Democratic | Yea |
| John "Jack" Walsh | Democratic | Yea |
| Nicole Poore | Democratic | Yea |
| Stephanie L. Hansen | Democratic | Yea |
| Brian Pettyjohn | Republican | Yea |
| Bryant L. Richardson | Republican | Yea |
| Dave G. Lawson | Republican | Yea |
| Gerald W. Hocker | Republican | Yea |
Subjects
Frequently asked questions
- What does SB 66 do?
- On June 30, 2016, the Delaware State Senate adopted Senate Resolution No. 19 (“S.R. 19”), requesting the Delaware Department of Insurance (the “Department”) to examine the secondary market for life insurance policies and make recommendations for possible legislation. In response to S.R. 19, the Department issued a report in December 2016 recommending the adoption of the Model Viatical Settlements Act adopted by the National Association of Insurance Commissioners (“NAIC”). This bill significantly modifies 18 Del. C. Chapter 75, the Delaware Viatical Settlements Act by adopting the NAIC Model. This bill establishes strong consumer protections while protecting policyholder rights. Key provisions include: • The bill significantly expands the class of persons, known as “viators,” who are permitted to enter into viatical settlement contracts. Under present law, viators are defined as individuals with a catastrophic, life threatening or chronic illness or condition. This physical condition restriction is eliminated in this bill (Section 7502(20)). • A limited 5 year settlement prohibition targeting transactions with characteristics of stranger-originated life insurance, such as non-recourse financing, settlement guarantees, or life expectancy valuations. (Section 7511). • Protection of consumer property rights by permitting any-time settlements for cause such as death of spouse, divorce, disability, bankruptcy, loss of job, or chronic or terminal illness (Section 7511), and by requiring full disclosure to the prospective viator (Section 7508). • Expanded consumer right to rescind a settlement contract for up to 60 days (Section 7510(c)). • Settlement reporting requirements to enable regulators to identify and stop stranger-originated life insurance (Section 7506). • Prohibition on advertising representing that insurance is “free” or at “no cost” (Sections 7512(d) and 7513(e)). • Disclosure to insurers of any plan to originate, renew, or finance a policy prior to or within 5 years of policy issue (Section 7509). • A comprehensive definition of “viatical settlement contract” which includes policy transfers regardless of when they occur if they include indicia of stranger-originated life insurance, and transfers which do not fall within a legitimate settlement exception, such as non-recourse financing arrangements, debt forgiveness, or settlement guarantees (Section 7502(15)). • The bill contains fraud prevention and control measures, grants regulatory authority to the Insurance Commissioner to address violations of the Act through the issuance of cease and desist orders, imposition of civil penalties, petitions for injunctive relief, and other enforcement measures. The bill also allows persons injured by violations of the Act to bring civil actions, and allows the Attorney General to seek criminal penalties for “fraudulent viatical acts,” as defined in the Act. The criminal penalties in the current version of the bill are based on the penalties for theft in 11 Del. C. § 841. The bill expressly states that it does not preempt the authority or relieve the duty of the Attorney General or any other law enforcement or regulatory agencies to investigate, examine, and prosecute suspected violations of law. • Section 7518 of the bill provides that nothing in this chapter preempts any provision of the Delaware Securities Act, as amended, including the regulation of securities transactions in viatical settlement investments and the licensing of any person or entity engaged in the sale of securities. Enactment of the NAIC Model will provide regulators with strong and important tools to combat stranger-originated life insurance and the fraudulent behavior it engenders, while continuing to allow honest policyholders to exercise all of their individual and contractual rights.
- Who sponsors SB 66?
- SB 66 is sponsored by Bruce C. Ennis, Bryon H. Short, and Brian J. Bushweller.
- What is the current status of SB 66?
- This bill has been enacted into law. Introduced April 25, 2017. Enacted.
- Where can I track SB 66?
- Track SB 66 free on One Click Politics — get push/email alerts when it moves.
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