What types of misrepresentations, omissions, or fraud in connection with viatical settlements have been identified?
A. The Washington Securities Division has identified instances where it appears that sales agents are misrepresenting or failing to disclose material information, including, but not limited to: • The policy to be assigned to the investor was fraudulent obtained by the insured, whereby the insured misrepresented his/her health condition by concealing his or her terminally illness; • The risk of the insured living much longer than his or her estimated life expectancy, thereby greatly reducing the investor’s annual yield; • The risk of the viatical settlement company and/or the insurer becoming insolvent; • The risk of the assigned life insurance policy lapsing; • The source of the funds to pay the premiums on the policies assigned to investors; • The financial condition and financial statements of the viatical settlement company; • The sales commission the sales agent receives; • The percentage of the investor’s funds the viator actually receives as a result of viaticating the insured’s
