State RegulationsIL specificDifficulty 3/5
In an Illinois viatical settlement, a person negotiates with providers on behalf of a policyowner who wants to sell her policy. Under 215 ILCS 5/159, what is this person's role and for whom does he act?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
215 ILCS 5/159 draws a role distinction: the provider is the party that effectuates the settlement and becomes the new owner and beneficiary, while the broker is the person who negotiates a settlement on behalf of the viator — the policyowner selling the policy. A broker who claims to represent the buyer's side, or who is not licensed, violates the structure Illinois built into the Act.
Why the other options are wrong
- A) The provider is the buyer that ends up owning the policy; a person negotiating for the seller is not the provider.
- B) The issuing insurer has no role in negotiating the sale of its own policy to a third party.
- D) The guaranty association protects policyholders against insolvency and plays no part in viatical negotiations.
Memory hook
Broker works for the seller; provider is the buyer.