GALLAGHER LAUDS COMMITTEE PASSAGE OF VIATICAL LEGISLATION
Florida’s Chief Financial Officer Tom Gallagher applauded lawmakers for approving legislation to better protect consumers from fraudulent viatical companies. The legislation, House Bill 1437, was unanimously approved by the House Commerce Committee. The bill would define viatical settlements as “securities” and place regulatory authority over this industry with the Office of Financial Regulation.
Viatical settlement providers match those who want to sell their life insurance policies at a discount to investors willing to buy the rights to those policies.
“The House Commerce Committee has done the right thing in approving this measure,” said Gallagher. “Far too many Floridians have lost their life savings for this measure to fail. I am pleased by the vote today and I encourage the full House and Senate to follow the lead of their colleagues, and approve this common sense legislation on behalf of all Floridians.”
House Bill 1437 by Rep. Dudley Goodlette would require investments in viatical settlements to be regulated as “securities.” For investors, this would mean access to company information, any promises made to investors would have to be documented and approved by state regulators, and a determination of the investment’s suitability would have to be considered, including the purchaser’s financial and tax status, and the purchaser’s investment objectives.
To also better protect investors from fraud, the bill also requires individuals who estimate the life expectancies on policies purchased by investors to be registered with state regulators. Viatical settlement companies would also be required to provide regulators the names of the life expectancy providers it has used. The legislation would also require brokers selling viaticals to be licensed.
Fraud in this industry has potentially cost investors up to $2 billion in losses since 1996. The average age of the investor defrauded is 70 years old and the average loss is $40,000.
Currently, Florida is one of only four states that does not regulate viaticals as securities.
Gadsden, Florida's fifth county, was formed in 1823. It once ran from Georgia to the Gulf of Mexico, from the Suwannee River to the Apalachicola River. Quincy, the county seat, was incorporated in 1828. The courthouse, above, was built in 1912.