Sec. 1. 24-A MRSA §6809, sub-§4, as enacted by PL 1997, c. 430, §1 and affected by §2, is amended to read:

4. Transfer of insurance policy. Immediately upon receipt from the viator of documents to effect the transfer of the insurance policy, the viatical settlement provider shall pay the proceeds of the settlement to an escrow or trust account managed by an independent trustee or escrow agent in a state- chartered or federally chartered financial institution that is a member of the federal reserve system, whose deposits are insured by the Federal Deposit Insurance Corporation or its successor, pending acknowledgment of the transfer by the issuer of the policy. The trustee or escrow agent shall transfer the proceeds due to the viator or otherwise according to the viator's written instructions immediately upon receipt of acknowledgment of the transfer from the insurer.

SUMMARY

This bill replaces a reference to the state-chartered and federally chartered financial institutions that are members of the federal reserve system with a reference to institutions whose deposits are insured by the Federal Deposit Insurance Corporation. This change makes state law consistent with the National Association of Insurance Commissioners' model law and allows a greater number of state-chartered financial institutions to manage escrow or trust accounts containing viatical settlement proceeds.