1. A viator may not enter into a viatical settlement within 5 years after the issuance of the policy to which the settlement relates unless one or more of the following conditions is or has been satisfied:

(a) The policy was issued upon the owner’s exercise of a right of conversion arising out of a group policy if the total of the time covered under the policy plus the time covered under the group policy is at least 60 months. The time covered under the group policy must be calculated without regard to a change in insurance carriers if the coverage has been continuous.

(b) The viator or owner submits to the provider of viatical settlements independent evidence that within the 5-year period:

(1) The owner or insured has been diagnosed as terminally ill;

(2) The owner or insured has been diagnosed as chronically ill or has an illness or condition that is life-threatening or requires a course of treatment for at least 2 years, long-term care or health care at home, or any combination of these;

(3) The spouse of the owner or insured has died;

(4) The owner or insured has divorced his or her spouse;

(5) The owner or insured has retired from full-time employment;

(6) The owner or insured has become physically or mentally disabled and a physician determines that the disability precludes the owner or insured from maintaining full-time employment;

(7) A final judgment or order has been entered or issued by a court of competent jurisdiction, on the application of a creditor or owner of the insured, adjudging the owner or insured bankrupt or insolvent, or approving a petition for reorganization of the owner or insured or appointing a receiver, trustee or liquidator for all or a substantial part of the assets of the owner or insured; or

(8) The owner of the policy experiences a significant decrease in income which is unexpected by the owner and impairs the reasonable ability of the owner to pay the premium on the policy.

2. The independent evidence must be submitted to the insurer when the provider of viatical settlements submits a request to the insurer to effect transfer of the policy to the provider of viatical settlements. The insurer shall respond timely to the request. This section does not prohibit an insurer from exercising its right to contest a policy on the ground of fraud.

3. If a provider of viatical settlements submits to an insurer a copy of the owner’s or insured’s certification that one of the events described in paragraph (b) of subsection 1 has occurred, the certification conclusively establishes that the viatical settlement is valid, and the insurer shall timely respond to the provider’s request to effect a transfer of the policy.

(Added to NRS by 2001, 2173; A 2009, 1798)