Viatical settlement brokers and providers in Nebraska will need to post an increased surety bond following revisions to the Nebraska Revised Statutes (NRS). Their required surety bond amount increased from $50,000 to $250,000.
There is a small difference between viatical settlement brokers and providers, as defined in the NRS. Viatical settlement brokers are licensed both as brokers and as life insurance producers in Nebraska. Providers are not licensed insurance producers, however both brokers and providers offer the same services.
Viatical settlement brokers and providers facilitate the sale of terminally ill patient’s life insurance policy to a third-party for more than its cash surrender value, but less than its death benefit. The terminally ill patient can then benefit from the policy during their lifetime. The policy is sold to a third-party who will begin paying the monthly premium and will receive the policy’s benefits when the insured patient dies.
The required $250,000 surety bond ensures that viatical settlement brokers and providers are conducting business in accordance with the NRS, Sections 41-1101 through 41-1117. Violations of these laws, collectively called the Viatical Settlement Act, can result in misdeameanor charges and fines ranging from $1,000 to $15,000 per violation.
The Nebraska Department of Insurance issues licenses for viatical settlement brokers and providers. Along with their application, brokers must submit their $250,000 surety bond and the $40 application fee. Business entities can also register multiple employees as viatical settlement brokers (if they qualify) and providers using this application form. Viatical settlement providers must also submit an application, though their application fee is $1,000.