viatical settlement provider
(2) Treatment of viatical settlements (A) In general If any portion of the death benefit under a life insurance contract on the life of an insured described in paragraph (1) is sold or assigned to a viatical settlement provider, the amount paid for the sale or assignment of such portion shall be treated as an amount paid under the life insurance contract by reason of the death of such insured. (B) Viatical settlement provider (i) In general The term “viatical settlement provider” means any person regularly engaged in the trade or business of purchasing, or taking assignments of, life insurance contracts on the lives of insureds described in paragraph (1) if— (I) such person is licensed for such purposes (with respect to insureds described in the same subparagraph of paragraph (1) as the insured) in the State in which the insured resides, or (II) in the case of an insured who resides in a State not requiring the licensing of such persons for such purposes with respect to such insured, such person meets the requirements of clause (ii) or (iii), whichever applies to such insured. (ii) Terminally ill insureds A person meets the requirements of this clause with respect to an insured who is a terminally ill individual if such person— (I) meets the requirements of sections 8 and 9 of the Viatical Settlements Model Act of the National Association of Insurance Commissioners, and (II) meets the requirements of the Model Regulations of the National Association of Insurance Commissioners (relating to standards for evaluation of reasonable payments) in determining amounts paid by such person in connection with such purchases or assignments. (iii) Chronically ill insureds A person meets the requirements of this clause with respect to an insured who is a chronically ill individual if such person— (I) meets requirements similar to the requirements referred to in clause (ii)(I), and (II) meets the standards (if any) of the National Association of Insurance Commissioners for evaluating the reasonableness of amounts paid by such person in connection with such purchases or assignments with respect to chronically ill individuals.
Source
26 USC § 101(g)(2)
Scoping language
None identified, default scope is assumed to be the parent (part III) of this section.