{"data":{"id":"us-ky/krs-304.15-710","jurisdiction":"us-ky","citation":"KRS 304.15-710","heading":"Life settlement provider's duties of disclosure to owner.","body":"(1) With each application for a life settlement contract, a life settlement provider or life\nsettlement broker shall provide the owner a copy of the department's consumer\nguide relating to life settlements. The provider shall provide in writing, in a separate\ndocument that is signed by the owner and provider the information in this\nsubsection to the owner no later than the date the life settlement contract is signed\nby all parties. The written disclosures shall be conspicuously displayed in any life\nsettlement contract or in a separate document furnished to the owner by a provider\nincluding any affiliations or contractual arrangements between the provider and the\nbroker and shall provide the following information:\n(a) That there are possible alternatives to life  settlement contracts including but\nnot limited to accelerated benefits or policy loans offered under the owner's\npolicy;\n(b) That some or all of the proceeds of the life settlement may be taxable under\nfederal income tax laws and state franchise and incom e tax laws, and that\nassistance should be sought from a personal tax advisor;\n(c) That proceeds of the life settlement contract could be subject to the claims of\ncreditors;\n(d) That receipt of the proceeds of a life settlement contract may adversely affect\nthe owner's eligibility for Medicaid or other government benefits or\nentitlements, and that advice should be obtained from the appropriate\ngovernment agencies;\n(e) That the owner has a right to rescind a life settlement contract before the\nearlier of thir ty (30) calendar days of the date it is executed by all parties or\nfifteen (15) calendar days after the receipt of the proceeds of the life\nsettlement contract by the owner. If exercised by the owner, rescission is\neffective only if both notice of the resc ission is given, and within the\nrescission period all proceeds, and any premiums, loans, and loan interest are\nrepaid to the settlement provider. If the insured dies during the rescission\nperiod, the settlement contract shall be deemed to have been rescind ed,\nsubject to repayment of all life settlement proceeds and any premiums, loans,\nand loan interest to the life settlement provider. The life settlement provider\nshall effectuate the change of ownership of the policy or certificate to the\nowner immediately upon effective rescission by the owner;\n(f) That entering into a life settlement contract may cause other rights or benefits,\nincluding conversion rights and waiver of premium benefits that may exist\nunder the policy, to be forfeited by the owner and that  assistance should be\nsought from a financial adviser;\n(g) That funds will be sent to the owner within three (3) business days after the\nlife settlement provider has received the insurer's or group administrator's\nacknowledgment that ownership of the polic y has been transferred and the\nbeneficiary has been designated pursuant to the life settlement contract;\n(h) That the disclosure document shall contain the following language:\n\"All medical, financial, or personal information solicited or obtained by a lif e\nsettlement provider or life settlement broker about an insured, including the\ninsured's identity or the identity of family members, a spouse, or a significant\nother may be disclosed as necessary to effect the life settlement between the\nowner and the lif e settlement provider. If you are asked to provide this\ninformation, you will be asked to consent to the disclosure. The information\nmay be provided to someone who buys the policy or provides funds for the\npurchase. You may be asked to renew your permissio n to share information\nevery two (2) years.\"; and\n(i) That the insured may be contacted by the life settlement provider or its\nauthorized representative for the purpose of determining the insured's health\nstatus or to verify the insured's address. This con tact shall be limited to once\nevery three (3) months if the insured has a life expectancy of more than one\n(1) year, and no more than once per month if the insured has a life expectancy\nof one (1) year or less.\n(2) A life settlement provider shall provide the owner with at least the following\ndisclosures no later than the date the life settlement contract is signed by all parties.\nThe disclosures shall be conspicuously displayed in the life settlement contract or in\na separate document signed by the owner a nd the life settlement provider and\nprovide the following information:\n(a) State the affiliation, if any, between the life settlement provider and the issuer\nof the policy to be acquired pursuant to a settlement contract;\n(b) State the name, address and telephone number of the life settlement provider;\n(c) If a policy to be acquired pursuant to a life settlement contract has been issued\nas a joint policy or involves family riders or any coverage of a life other than\nthe insured under the policy to be acquired pursuant to a settlement contract,\nthe owner shall be informed of the possible loss of coverage on the other lives\nand shall be advised to consult with his insurance producer or the company\nissuing the policy for advice on the proposed life settlement contract;\n(d) State the dollar amount of the current death benefit payable to the life\nsettlement provider under the policy. The life settlement provider shall, if\nknown, also disclose the availability of any additional guaranteed insurance\nbenefits, the dollar amount of any accidental death and dismembermen t\nbenefits under the policy, and the life settlement provider's interest in those\nbenefits;\n(e) State the name, business address, and telephone number of the independent\nthird party escrow agent, and the fact that the owner may inspect or receive\ncopies of the relevant escrow or trust agreements or documents;\n(f) The date by which the funds will be available to the owner and the transmitter\nof the funds;\n(g) That a consumer guide shall be delivered to owners with each application as\nrequired in this subsection;\n(h) That applications and life settlement contracts shall contain the statement as\nrequired in KRS 304.15-717(2);\n(i) That a broker represents exclusively the owner, and not the insurer or the\nprovider or any other person, and owes a fiduciary duty to  the owner,\nincluding a duty to act according to the owner's instructions and in the best\ninterests of the owner; and\n(j) The fact that a change in ownership could in the future limit the insured's\nability to purchase future insurance on the insured's life  because there is a\nlimit to how much coverage insurers will issue on one (1) life.\n(3) If the life settlement provider transfers ownership or changes the beneficiary of the\npolicy, the life settlement provider shall communicate the change in ownership or\nbeneficiary to the insured within twenty (20) days after the change.\n(4) A broker shall provide the owner and the provider with at least the following\ndisclosures no later than the date the life settlement contract is signed by all parties.\nThe disclosures shall be conspicuously displayed in the life settlement contract or in\na separate document signed by the owner and provide the following information:\n(a) The name, business address, and telephone number of the broker;\n(b) A full, complete, and accurate de scription of all the offers, counter -offers,\nacceptances, and rejections relating to the proposed life settlement contract;\n(c) The name of each broker who receives compensation and the amount of\ncompensation received by the broker, which compensation incl udes anything\nof value paid or given to the broker in connection with the life settlement\ncontract;\n(d) A complete reconciliation of the gross offer or bid by the provider to the net\namount of proceeds or value to be received by the owner. For the purposes  of\nthis paragraph, \"gross offer or bid\" means the total amount or value offered by\nthe provider for the purchase of one (1) or more life insurance policies,\ninclusive of the commissions and fees; and\n(e) The failure to provide the disclosures or rights de scribed in this section shall\nbe deemed an unfair trade practice.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=17252","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:44Z","sha256":"4e2b3c478f1e544de75c2566e74e6ad887617988941d4e9c51ee2b8b88393dd2","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.15-709","next":"us-ky/krs-304.15-712"},"notice":"GroundRules: Original legal text. Not legal advice."}