07 LC
36 0395
House
Bill 172
By:
Representatives Willard of the
49th,
Knox of the
24th,
Jacobs of the
80th,
and Coan of the
101st
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Code Section 10-5-2 of the Official Code of Georgia Annotated, relating to
definitions and rules of construction of the "Georgia Securities Act of 1973,"
so as to provide for changes to the terms "securities" and "viatical investment"
for purposes of clarification and to conform to federal standards; to repeal
conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Code
Section 10-5-2 of the Official Code of Georgia Annotated, relating to
definitions and rules of construction of the "Georgia Securities Act of 1973,"
is amended by revising paragraph (26) of subsection (a) as follows:
"(26)
'Security' means any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of indebtedness, investment certificate, certificate
of interest or participation in any profit-sharing agreement, certificate of
interest in oil, gas, or other mineral rights, collateral trust certificates,
preorganization certificate or subscription, transferable share, investment
contract, viatical investment, voting-trust certificate, limited partnership
interest, or beneficial interest in profits or earnings, or any other instrument
commonly known as a security, including any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guaranty
of, or warrant or right to subscribe to or purchase, any of the foregoing. The
term 'investment contract' shall include but is not limited to an investment
which holds out the possibility of return on risk capital even though the
investor´s efforts are necessary to receive such return if:
(A)
Such return is dependent upon essential managerial or sales efforts of the
issuer or its affiliates;
(B)
One of the inducements to invest is the promise of promotional or sales efforts
of the issuer or its affiliates in the investor´s behalf; and
(C)
The investor shall thereby acquire the right to earn a commission or other
compensation from sales of rights to sell goods, services, or other investment
contracts of the issuer or its affiliates.
Security
shall not
mean:
(i) any insurance or endowment policy or
annuity contract under which an insurance company promises to pay a fixed number
of dollars either in a lump sum or periodically for life or some other specified
period nor any variable annuity contract as provided for and regulated under
Title 33 and issued by a life insurance company licensed to do business in the
State of
Georgia;
(ii)
nor shall
it mean any interest in a residential unit
and a rental management arrangement relating to such residential unit so long as
the owner-participants under the rental management arrangement, whether optional
or mandatory, do not participate directly in the income derived from the rental
of units owned by
others; or
(iii) those investments that would be considered viatical investments but for
the exclusions provided in subparagraphs (a)(32)(A) through (a)(32)(D) of this
Code section."
SECTION
2.
Said
Code section is further amended by revising paragraph (32) of subsection (a) as
follows:
"(32)
'Viatical investment' means the contractual right to receive any portion of the
death benefit or ownership of a life insurance policy or certificate for
consideration that is less than the expected death benefit of the life insurance
policy or certificate. Viatical investment does not include:
(A)
Any sale or transfer of any portion of the death benefit or ownership of a life
insurance policy or
certificate:
(i) by the insured or policy owner to a
viatical issuer or to any person or entity regularly engaged in the business of
reselling or transferring such benefits to viatical
issuers; (ii)
that is a federal covered security under Section 18(b)(3) or (4) of the federal
Securities Act of 1933; or (iii) that is deemed to be an offshore transaction
occurring outside the United States pursuant to Regulation S promulgated under
the federal Securities Act of
1933;
(B)
The assignment of a life insurance policy to a bank, savings bank, savings and
loan association, credit union, or other institution licensed under the laws of
any state or the United States as collateral for a loan;
(C)
The obtaining of accelerated benefits from the issuer pursuant to the terms of a
life insurance policy issued in accordance with the laws of this or another
state; or
(D)
The sale or transfer of any portion of the death benefit or ownership of a life
insurance policy by an individual who enters into no more than one agreement in
a calendar year regarding the transfer of life insurance policies insuring the
life of only one person for consideration that is less than the death benefit,
unless any third party receives, directly or indirectly, any fee, commission, or
other remuneration in connection with said assignment."
SECTION
3.
All
laws and parts of laws in conflict with this Act are repealed.