06 LC 28
2908S
The
Senate Insurance and Labor Committee offered the following substitute to SB
406:
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Chapter 59 of Title 33 of the Official Code of Georgia Annotated, relating
to life settlements, so as to revise certain definitions; to provide additional
grounds for the suspension, revocation, or refusal to renew the license of life
insurance producers; to make editorial revisions; to provide for related
matters; to repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Chapter
59 of Title 33 of the Official Code of Georgia Annotated, relating to life
settlements, is amended by striking paragraphs (5), (8), and (13) and inserting
in lieu thereof new paragraphs (5), (8), and (13) to read as
follows:
"(5)
'Fraudulent life settlement act' includes:
(A)
Acts or omissions committed by a person who, knowingly or with intent to
defraud, for the purpose of depriving another of property or for pecuniary gain,
commits, engages, or permits its employees or its agents to
engage,
in acts including:
(i)
Presenting, causing to be presented, or preparing with knowledge or belief that
it will be presented to or by a life settlement provider, financing entity,
insurer, insurance producer, or another
person,
false material information, or concealing material information, as part of, in
support of, or concerning a fact material to one or more of the
following:
(I)
An application for the issuance of a life settlement contract or
policy;
(II)
The underwriting of a life settlement contract or policy;
(III)
A claim for payment or benefit pursuant to a life settlement contract or
policy;
(IV)
Premiums paid on a policy;
(V)
Payments and changes in ownership or beneficiary made in accordance with the
terms of a life settlement contract or policy;
(VI)
The reinstatement or conversion of a policy;
(VII)
The
In
the solicitation, offer, effectuation, or
sale of a life settlement contract or policy;
(VIII)
The issuance of written evidence of a life settlement contract or insurance;
or
(IX)
A financing transaction;
or
(ii)
Employing any device, scheme, or artifice to defraud related to purchased
policies;
or
(B)
In the
furtherance of a fraud or to prevent the detection of a fraud a person commits
or permits its employees or its agents to commit any of the following
acts:
Any of the
following acts when committed or permitted by any person or its employees or
agents in the furtherance of a fraud or to prevent the detection of a
fraud:
(i)
Removing,
concealing, altering, destroying, or
sequestering
Remove,
conceal, alter, destroy, or sequester from
the Commissioner the assets or records of a licensee or other person engaged in
the business of life settlements;
(ii)
Misrepresenting
or concealing
Misrepresent
or conceal the financial condition of a
licensee, financing entity, insurer, or other person;
(iii)
Transacting
Transact
the business of life settlements in violation of laws requiring a license,
certificate of authority, or other legal authority for the transaction of the
business of life settlements; or
(iv)
Filing
File
with the Commissioner or the chief insurance regulatory official of another
jurisdiction a document containing false information or otherwise
conceal
concealing
information about a material fact from the Commissioner;
(C)
Embezzlement, theft, misappropriation, or conversion of moneys, funds, premiums,
credits, or other property of a life settlement provider, life insurance
producer, insurer, insured, seller, policy owner, or another person engaged in
the business of life settlements or insurance;
(D)
Recklessly entering into, negotiating, or otherwise dealing in a life settlement
contract, the subject of which is a policy that was obtained by presenting false
information concerning a fact material to the policy, or by concealing, for the
purpose of misleading another, information concerning a fact material to the
policy, where the seller or the
selleŕs
agent intended to defraud the insurance company that issued the policy. As used
in this subparagraph, 'recklessly' means engaging in the conduct in conscious
and clearly unjustifiable disregard of a substantial likelihood of the existence
of the relevant facts or risks, this disregard involving a gross deviation from
acceptable standards of conduct;
or
(E)
Facilitating
the change of state of residency of a policy or seller to avoid the provisions
of this chapter; or
(F)
Attempting to commit, assist, aid, or abet in the commission of, or conspiracy
to commit, the acts or omissions specified in this
paragraph."
"(8)
'Life settlement provider' means a person, other than a seller, who
in this state,
from this state, or with a seller who is a resident of this
state enters into or effectuates a life
settlement contract. Life settlement provider does not include:
(A)
A bank, savings bank, savings and loan association, credit union, or other
licensed lending institution that takes an assignment of a policy as collateral
for a loan;
(B)
The issuer of a policy providing accelerated benefits pursuant to the
policy;
(C)
An authorized or eligible insurer that provides stop-loss coverage to a life
settlement provider, financing entity, special purpose entity, or related
provider trust;
(D)
A natural person who enters into or effectuates no more than one agreement in a
calendar year for the transfer of policies for any value less than the expected
death benefit;
(E)
A financing entity;
(F)
A special purpose entity;
(G)
A related provider trust; or
(H)
An accredited investor or qualified institutional buyer as defined,
respectively, in Regulation D, Rule 501, or Rule 144A of the Federal Securities
Act of 1933, as amended, and who purchases a purchased policy from a life
settlement
provider."
"(13)
'Seller' means the owner of a policy
who is a
resident of this state who enters or seeks
to enter into a life settlement contract. For the purposes of this chapter, a
seller is not limited to an owner of a policy insuring the life of an individual
with a terminal or chronic illness or condition except where specifically
addressed. If there is more than one owner on a single policy and the owners
are residents of different states, the transaction shall be governed by the law
of the state in which the owner having the largest percentage ownership resides
or, if the owners hold equal ownership, the state of residence of one owner
agreed upon in writing by all owners. Seller does not include:
(A)
A licensee as provided by this chapter, including a life insurance
producer;
(B)
A qualified institutional buyer as defined, respectively, in Regulation D, Rule
501, or Rule 144A of the Federal Securities Act of 1933, as
amended;
(C)
A financing entity;
(D)
A special purpose entity; or
(E)
A related provider
trust."
SECTION
2.
Said
chapter is further amended by striking subsection (b) of Code Section 33-59-4,
relating to denial, revocation, suspension, or refusal of licensees, and
inserting in lieu thereof a new subsection (b) to read as follows:
"(b)
The Commissioner may suspend, revoke, or refuse to renew the license of a life
insurance producer if the Commissioner finds that such life insurance producer
has:
(1)
violated
Violated
the provisions of this
chapter;
or
(2)
Received a fee, commission, or other valuable consideration for his or her
services with respect to life settlement transactions that involved unlicensed
life settlement providers or persons who offered or attempted to negotiate on
behalf of another person a life settlement contract and who were not life
insurance
producers."
SECTION
3.
All
laws and parts of laws in conflict with this Act are repealed.