California Corporations Code 25023 – (a) Except as provided in subdivision (b), “viatical settlement …
(a) Except as provided in subdivision (b), “viatical settlement contract” 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, and “life settlement contract” means an agreement, other than a viatical settlement contract, for the purchase, sale, assignment, transfer, devise, or bequest of any portion of the death benefit or ownership of a life insurance policy or certificate for consideration that is less than the expected death benefit of the life insurance policy or certificate.
(b) “Viatical settlement contract” and “life settlement contract” do not include any of the following:
Terms Used In California Corporations Code 25023
- Bequest: Property gifted by will.
- Contract: A legal written agreement that becomes binding when signed.
- Devise: To gift property by will.
- Person: includes a corporation as well as a natural person. See California Corporations Code 18
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: means the State of California, unless applied to the different parts of the United States. See California Education Code 77
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
(1) The assignment, transfer, sale, devise, or bequest of a death benefit, life insurance policy, or certificate of insurance by the insured or the original owner to any person if the assignment, transfer, sale, devise, or bequest (A) is not accompanied by the publication of any advertisement and (B) is not effected by or through a broker-dealer (Section 25004).
(2) The assignment of a life insurance policy to a bank, savings bank, savings association, credit union, or other lender (either licensed or not required to be licensed) as collateral for a loan, or to a stop-loss insurer or reinsurer.
(3) The exercise of accelerated benefits pursuant to the terms of a life insurance policy issued in accordance with the insurance laws of this state.
(4) The assignment, transfer, sale, devise, or bequest of any undivided death benefit, life insurance policy, or certificate of insurance by an entity licensed pursuant to § 10113.2 of the Insurance Code, or a viatical or life settlement provider licensed from another state, to one individual or entity, provided that the individual or entity represents that the individual or entity is purchasing for its own account (or trust account, if the entity is a trustee) and not with a view to or for sale in connection with a distribution of the individual death benefit, life insurance policy, or certificate of insurance.
(Amended by Stats. 2019, Ch. 143, Sec. 43. (SB 251) Effective January 1, 2020.)