sb499.html

Senate Bill 499

By: Senator Hudgens of the 47th

AS PASSED SENATE

A BILL TO BE ENTITLED
AN ACT

To amend Chapter 59 of Title 33 of the Official Code of Georgia Annotated, relating to life settlements, so as to provide a short title; to provide for definitions; to provide for license requirements for providers and registration requirements for life settlement brokers; to provide suspension, revocation, and refusal to renew of such licenses; to provide for requirements for life settlement contracts; to provide for certain reporting requirements; to provide for certain privacy requirements; to provide for the examination of licensees; to provide for the authority of the Commissioner of Insurance to investigate persons involved in the life settlement business and in suspected fraudulent practices; to provide for restrictions on advertising; to provide for certain disclosures; to provide for requirements and procedures for life settlement contracts; to authorize the Commissioner of Insurance to promulgate rules and regulations; to provide for prohibited acts concerning life settlement contracts; to provide for fraud prevention and control; to provide for certain immunities from liability; to provide for confidentiality; to provide for injunctions and other civil remedies; to provide for criminal sanctions and penalties; to provide that violations of the chapter shall constitute unfair trade practices; to provide for related matters; to provide for effective dates and applicability; 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 revising the chapter as follows:

"CHAPTER 59

33-59-1.

This chapter shall be known and may be cited as the 'Life Settlements Act.'

33-59-2.

As used in this chapter, the term:

(1) 'Advertising Advertisement' means any written, electronic, or printed communication or any communication by means of recorded telephone messages or any communication transmitted on radio, television, the Internet, or similar communications media, including film strips, motion pictures, and videos, published, disseminated, circulated, or placed directly before the public, directly or indirectly, in this state for the purpose of creating an interest in or inducing a person to purchase or sell, assign, devise, bequeath bequest, or transfer the death benefit or ownership of a life insurance policy or an interest in a life insurance policy pursuant to a life settlement contract.

(2) 'Business of life settlements' means an activity including involved in, but not limited to, the offering to enter into, solicitation, negotiation, procurement, effectuation, purchasing, investing, financing soliciting, negotiating, procuring, effectuating, monitoring, or tracking, underwriting, selling, transferring, assigning, pledging, hypothecating, or in any other manner involving, of life settlement contracts.

(3) 'Chronically ill' or 'having a chronic illness' means:

(A) Being unable to perform at least two activities of daily living including, but not limited to, such as eating, toileting, transferring, bathing, dressing, or continence;

(B) Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment; or

(C) Having a level of disability similar to that described in subparagraph (A) of this paragraph as determined by the United States Secretary of the United States Department of Health and Human Services.

(4)(A) 'Financing entity' means an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a life settlement provider, credit enhancer, or an any entity that has a direct ownership in a policy or certificate that is the subject of a life settlement contract, but:

(i)(A) Whose principal activity related to the transaction is providing funds to effect the life settlement contract or purchase of one or more purchased policies; and

(ii)(B) Who has an agreement in writing with one or more licensed life settlement providers to finance the acquisition of life settlement contracts or to provide stop-loss insurance.

(B) 'Financing entity' does not include a nonaccredited investor or purchaser.

(5) 'Financing transaction' means a transaction in which a licensed provider obtains financing from a financing entity including, without limitation, any secured or unsecured financing, any securitization transaction, or any securities offering which either is registered or exempt from registration under federal and state securities law.

(5)(6) 'Fraudulent life settlement act' includes:

(A) Acts or omissions committed by a any person who, knowingly or and with intent to defraud, for the purpose of depriving another of property or for pecuniary gain, commits, engages in acts, or permits its employees or its agents to engage, in acts, including, but not limited to:

(i) Presenting, causing to be presented, or preparing with knowledge or and belief that it will be presented to or by a life settlement provider, financing entity, premium finance lender, life settlement broker, insurer, insurance producer, or another any other 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 insurance policy;

(II) The underwriting of a life settlement contract or insurance policy;

(III) A claim for payment or benefit pursuant to a life settlement contract or insurance policy;

(IV) Premiums paid on a an insurance policy;

(V) Payments and changes in ownership or beneficiary made in accordance with the terms of a life settlement contract or insurance policy;

(VI) The reinstatement or conversion of a an insurance policy;

(VII) In the solicitation, offer to enter into, or effectuation, or sale of a life settlement contract or insurance policy;

(VIII) The issuance of written evidence of a life settlement contract contracts or insurance; or

(IX) A financing transaction Any application for or the existence of or any payments related to a loan secured directly or indirectly by an interest in a life insurance policy; or

(X) Enter into any practice or plan which involved stranger originated life insurance;

(ii) Failing to disclose to the insurer where the request for such disclosure has been asked for by the insurer that the prospective insured has undergone a life expectancy evaluation by any person or entity other than the insurer or its authorized representatives in connection with the issuance of the policy;

(ii)(iii) Employing any device, scheme, or artifice to defraud related to purchased policies in the business of life settlements; or

(iv) In the solicitation, application, or issuance of a life insurance policy, employing any device, scheme, or artifice in violation of state insurable interest laws; and

(B) In the furtherance of a fraud or to prevent the detection of a fraud, acts or omissions of any a person, commits or permits its employees, or its agents to commit any of the following acts acting with such person´s permission, to:

(i) 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) Misrepresent or conceal the financial condition of a licensee, financing entity, insurer, or other person;

(iii) 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) 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)(v) Embezzlement Engage in embezzlement, theft, misappropriation, or conversion of moneys, funds, premiums, credits, or other property of a life settlement provider, life insurance producer, insurer, insured, seller, insurance policy owner, or another any other person engaged in the business of life settlements or insurance;

(D)(vi) Recklessly entering into, negotiating, Knowingly and with intent to defraud, enter into, broker, or otherwise dealing deal in a life settlement contract, the subject of which is a life insurance policy that was obtained by presenting false information concerning a any fact material to the policy, or by concealing, for the purpose of misleading another, information concerning a any fact material to the policy, where the seller owner or the seller´s owner´s agent intended to defraud the policy´s issuer; 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)(vii) Attempting Attempt to commit, assist, aid, or abet in the commission of, or conspiracy to commit, the acts or omissions specified in this paragraph; or

(viii) Misrepresent the state of residence of an owner to be a state or jurisdiction that does not have a law substantially similar to this chapter for the purpose of evading or avoiding the provisions of this chapter.

(7) 'Insured' means the person covered under the policy being considered for sale in a life settlement contract.

(8) 'Life expectancy' means the arithmetic mean of the number of months the insured under the life insurance policy to be settled can be expected to live as determined by a life expectancy company considering medical records and appropriate experiential data.

(6)(9) 'Life insurance producer' means a any person licensed in this state as a resident or nonresident insurance producer pursuant to Chapter 23 of this title who has received qualification or authority for life insurance coverage or a life line of coverage pursuant to Chapter 23 of this title.

(10) 'Life settlement broker' means a person who, on behalf of an owner and for a fee, commission, or other valuable consideration, offers or attempts to negotiate life settlement contracts between an owner and providers. A life settlement broker represents only the owner and owes a fiduciary duty to the owner to act according to the owner´s instructions, and in the best interest of the owner, notwithstanding the manner in which the life settlement broker is compensated. A life settlement broker does not include an attorney, certified public accountant, or financial planner retained in the type of practice customarily performed in their professional capacity to represent the owner whose compensation is not paid directly or indirectly by the provider or any other person, except the owner.

(7)(11)(A) 'Life settlement contract' means a written agreement entered into between a provider and an owner establishing the terms under which compensation or anything any thing of value is will be paid, which compensation or thing of value is less than the expected death benefit of the insurance policy or certificate, in return for the seller´s owner´s assignment, transfer, sale, devise, or bequest of the death benefit or ownership of any portion of the an insurance policy or certificate of insurance for compensation; provided, however, that the minimum value for a life settlement contract shall be greater than a cash surrender value or accelerated death benefit available at the time of an application for a life settlement contract. A life Life settlement contract also includes the transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns such policy if the trust or other entity was formed or availed of for the principal purpose of acquiring one or more life insurance contracts, which life insurance contract insures the life of a person residing in this state.

(B) Life settlement contract also includes:

(i) A written agreement a contract for a loan or other financing lending transaction, with a seller secured primarily by an individual or group life insurance policy, other than a loan by a life insurance company pursuant to the terms of the policy or a loan secured by the cash value of a policy.; and

(ii) A premium finance loan made for a policy on or before the date of issuance of the policy where:

(I) The loan proceeds are not used solely to pay premiums for the policy and any costs or expenses incurred by the lender or the borrower in connection with the financing;

(II) The owner receives on the date of the premium finance loan a guarantee of the future life settlement value of the policy; or

(III) The owner agrees on the date of the premium finance loan to sell the policy or any portion of its death benefit on any date following the issuance of the policy.

A life settlement contract includes an agreement with a seller to transfer ownership or change the beneficiary designation at a later date regardless of the date that compensation is paid to the seller. A life settlement contract does not mean a written agreement entered into between a seller and a person having an insurable interest in the insured´s life.

(i) A policy loan by a life insurance company pursuant to the terms of the life insurance policy or accelerated death provisions contained in the life insurance policy, whether issued with the original policy or as a rider;

(ii) A premium finance loan, as defined in paragraph (18) of this Code section, or any loan made by a bank or other licensed financial institution, provided that neither default on such loan nor the transfer of the policy in connection with such default is pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this chapter;

(iii) A collateral assignment of a life insurance policy by an owner;

(iv) A loan made by a lender that does not violate Chapter 22 of this title, provided such loan is not described in this paragraph as being included in the definition of a life settlement contract, and is not otherwise within the definition of life settlement contract;

(v) An agreement where all the parties are closely related to the insured by blood or law or have a lawful substantial economic interest in the continued life, health, and bodily safety of the person insured or are trusts established primarily for the benefit of such parties;

(vi) Any designation, consent, or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee;

(vii) A bona fide business succession planning arrangement between:

(I) One or more shareholders in a corporation or between a corporation and one or more of its shareholders or one or more trust established by its shareholders;

(II) One or more partners in a partnership or between a partnership and one or more of its partners or one or more trust established by its partners; or

(III) One or more members in a limited liability company or between a limited liability company and one or more of its members or one or more trust established by its members;

(viii) An agreement entered into by a service recipient, or a trust established by the service recipient, and a service provider or a trust established by the service provider, who performs significant services for the service recipient´s trade or business; or

(ix) Any other contract, transaction, or arrangement from the definition of life settlement contract that the Commissioner determines is not of the type intended to be regulated by this chapter.

(8) 'Life settlement provider' means a person, other than a seller, who 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.

(12) 'Net death benefit' means the amount of the life insurance policy or certificate to be settled less any outstanding debts or liens.

(13) 'Owner' means the owner of a life insurance policy or a certificate holder under a group policy, with or without a terminal illness, who enters or seeks to enter into a life settlement contract. For the purposes of this chapter, an owner shall not be limited to an owner of a life insurance policy or a certificate holder under a group policy that insures the life of an individual with a terminal or chronic illness or condition except where specifically addressed. Owner does not include:

(A) Any provider or other licensee under this chapter;

(B) A qualified institutional buyer as defined in Rule 144A of the federal Securities Act of 1933, as amended;

(D) A special purpose entity; or

(E) A related provider trust.

(14) 'Patient identifying information' means an insured´s address, telephone number, facsimile number, e-mail address, photograph or likeness, employer, employment status, social security number, or any other information that is likely to lead to the identification of the insured.

(9)(15) 'Person' means a any natural person or a legal entity, including, but not limited to, an individual, a partnership, limited liability company, association, trust, or corporation.

(10)(16) 'Policy' means an individual or group policy, group certificate, contract, or arrangement of life insurance affecting the rights of owned by a resident of this state or bearing a reasonable relation to this state, regardless of whether delivered or issued for delivery in this state.

(17) 'Premium finance loan' is a loan made primarily for the purposes of making premium payments on a life insurance policy, which loan is secured by an interest in such life insurance policy.

(18) 'Provider' means a person, other than an owner, who enters into or effectuates a life settlement contract with an owner. A provider does not include:

(A) Any bank, savings bank, savings and loan association, or credit union;

(B) A licensed lending institution or creditor or secured party pursuant to a premium finance loan agreement which takes an assignment of a life insurance policy or certificate issued pursuant to a group life insurance policy as collateral for a loan;

(C) The insurer of a life insurance policy or rider to the extent of providing accelerated death benefits or riders under this title or cash surrender value;

(D) Any natural person who enters into or effectuates no more than one agreement in a calendar year for the transfer of a life insurance policy or certificate issued pursuant to a group life insurance policy for compensation or any thing of value less than the expected death benefit payable under the policy;

(E) A purchaser;

(F) Any authorized or eligible insurer that provides stop loss coverage to a provider, purchaser, financing entity, special purpose entity, or related provider trust;

(G) A financing entity;

(H) A special purpose entity;

(I) A related provider trust;

(J) A life settlement broker; or

(K) An accredited investor or qualified institutional buyer as defined in, respectively, Regulation D, Rule 501, or Rule 144A of the federal Securities Act of 1933, as amended, who purchases a life settlement policy from a provider.

(11)(19) 'Purchased policy' means a policy or group certificate that has been acquired by a life settlement provider pursuant to a life settlement contract.

(20) 'Purchaser' means a person who pays compensation or any thing of value as consideration for a beneficial interest in a trust which is vested with, or for the assignment, transfer, or sale of, an ownership or other interest in a life insurance policy or a certificate issued pursuant to a group life insurance policy which has been the subject of a life settlement contract.

(12)(21) 'Related provider trust' means a titling trust or other trust established by a licensed life settlement provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction. The In order to qualify as a related provider trust, the trust shall must have a written agreement with the licensed life settlement provider under which the licensed life settlement provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files related relating to life settlement transactions available to the Commissioner department as if those records and files were maintained directly by the licensed life settlement provider.

(22) 'Settled policy' means a life insurance policy or certificate that has been acquired by a provider pursuant to a life settlement contract.

(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) 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;

(D) A special purpose entity; or

(E) A related provider trust.

(14)(23) 'Special purpose entity' means a corporation, partnership, trust, limited liability company, or other similar legal entity formed only solely to provide either, directly or indirectly, access to institutional capital markets for a financing entity or licensed life settlement provider; or in connection with a transaction in which the securities in the special purpose entity are acquired by the owner or by a qualified institutional buyer as defined in Rule 144 promulgated under the federal Securities Act of 1933, as amended, or the securities pay a fixed rate of return commensurate with established asset-backed institutional capital markets.

(24) 'Stranger originated life insurance' is a practice or plan to initiate a life insurance policy for the benefit of a third party investor who, at the time of policy origination, has no insurable interest in the insured. Stranger originated life insurance practices include, but are not limited to, cases in which life insurance is purchased with resources or guarantees from or through a person or entity who, at the time of policy inception, could not lawfully initiate the policy himself or herself or itself, and where, at the time of inception, there is an arrangement or agreement, whether oral or written, to directly or indirectly transfer the ownership of the policy or the policy benefits to a third party. Trusts that are created to give the appearance of insurable interest and are used to initiate policies for investors violate insurable interest laws and the prohibition against wagering on life. Stranger originated life insurance arrangements do not include those practices set forth in subparagraph (C) of paragraph (11) of this Code section.

(15)(25) 'Terminally ill' or 'having a terminal illness' means having an illness or sickness that can reasonably is be expected to result in death in 24 months or less.

33-59-3.

(a)(1) A No person, wherever located, shall not negotiate life settlement contracts between a seller and one or more life settlement providers or otherwise act on behalf of a seller unless such person is a life insurance producer act as a provider or life settlement broker with an owner or multiple owners who are residents of this state without first having obtained a license or acknowledgment of registration from the Commissioner. If there is more than one owner on a single policy and the owners are residents of different states, the life settlement contract 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.

(2) A life insurance producer, as defined in paragraph (10) of subsection (a) of Code Section 33-23-1, who has been licensed for at least one year, shall be permitted to negotiate, as defined in paragraph (11) of subsection (a) of Code Section 33-23-1, life settlement contracts between a seller residing in this state and one or more life settlement providers. For purposes of this Code section, the one-year requirement is deemed to be satisfied if such person has been licensed as a resident life insurance producer in his or her home state for at least one year.

(b) Application for a provider license or life settlement broker registration shall be made to the Commissioner by the applicant on a form prescribed by the Commissioner and the application shall be accompanied by a fee in an amount established by the Commissioner; provided, however, that the license and renewal fees for a provider license shall be reasonable and that the registration and renewal fees for a life settlement broker registration shall not exceed those established for an insurance producer, as such fees are otherwise provided for in this title.

(c) A life insurance producer who has been duly licensed as a resident insurance producer with a life line of authority in this state or his or her home state for at least one year and is licensed as a nonresident producer in this state shall be deemed to meet the licensing and registration requirements of this Code section and shall be permitted to operate as a life settlement broker.

(d)(3) Not later than 30 days from the first day of negotiating a life settlement on behalf of a seller operating as a life settlement broker, the life insurance producer shall notify the Commissioner of the activity that he or she is acting as a life settlement broker on a form prescribed by the Commissioner and shall pay any applicable fees fee to be determined by the Commissioner. Notification shall include an acknowledgment by the life insurance producer that he or she operates will operate as a life settlement broker in accordance with this chapter.

(e)(4) Irrespective of the manner in which the life insurance producer is compensated, a life insurance producer is deemed to represent only the seller and not the life settlement provider or any insurer, and the The insurer that issued the seller´s policy that is the subject of a life settlement contract shall not be liable responsible for any act or omission of the life insurance producer or the a life settlement broker, provider, or purchaser arising out of or in connection with the life settlement transaction, provided that the insurer shall remain liable for any of its own acts or omissions unless the insurer receives compensation for the placement of a life settlement contract from the provider, purchaser, or life settlement broker in connection with the life settlement contract.

(f)(5) Notwithstanding paragraph (1) of this subsection, a A person licensed as an attorney, certified public accountant, or financial planner accredited by a nationally recognized accreditation agency, who is retained to represent the seller, owner and whose compensation is not paid directly or indirectly by the life settlement provider, or purchaser may negotiate life settlement contracts on behalf of the owner without having to obtain a license as a life insurance producer settlement broker.

(b)(1) A person may not operate as a life settlement provider without first obtaining a life settlement provider license from the insurance commissioner of the state of residence of the seller.

(2) Application for a life settlement provider license shall be made to the Commissioner by the applicant on a form prescribed by the Commissioner, and an application shall be accompanied by the fees to be determined by the Commissioner. Applications for license under this Code section shall be approved or denied by the Commissioner within 60 calendar days following receipt of a completed application by the Commissioner. The Commissioner shall notify applicants that the application is complete. Applications for such license shall be deemed approved after such time if not disapproved.

(3)(g) Licenses A license may be renewed from year to every year on the anniversary date May 1 upon payment of the annual periodic renewal fees to be determined by the Commissioner fee. Failure to pay the fees by the renewal date fee within the terms prescribed shall result in the expiration automatic revocation of the license requiring periodic renewal.

(4) Notwithstanding paragraphs (2) and (3) of this subsection, the license and renewal fees for a life settlement provider license may not exceed that established for an insurer as provided in Code Section 33-8-1.

(h) The term of a provider license shall be equal to that of a domestic stock life insurance company and the term of a life settlement broker registration shall be equal to that of an insurance producer license. Licenses or registrations requiring periodic renewal may be renewed on their anniversary date upon payment of the periodic renewal fee as specified in subsection (b) of this Code section. Failure to pay the fees on or before the renewal date shall result in expiration of the license or registration.

(i)(5) The applicant for a life settlement provider license shall provide such information as the Commissioner may require on forms prescribed prepared by the Commissioner. The Commissioner has shall have the authority, at any time, to require the such applicant to fully disclose the identity of all its stockholders, except stockholders owning fewer than 10 percent of the shares of an applicant whose shares are publicly traded, partners, officers, members, and employees, except stockholders owning fewer than 5 percent of the shares of an applicant whose shares are publicly traded, and the Commissioner may, in the exercise of the Commissioner´s sole discretion, refuse to issue such a license in the name of a legal entity any person if not satisfied that any officer, employee, stockholder, or partner, or member of it thereof who may materially influence the applicant´s conduct meets the standards of this chapter.

(j)(6) A license issued to a legal partnership. corporation, or other entity authorizes all partners, members, officers, members, and designated employees to act as life settlement providers, as applicable, as a licensee under the license, and all if those persons shall be are named in the application and any supplements to the application.

(k)(7) Upon the filing of an application and the payment of the license fee, the Commissioner shall make an investigation of each applicant for a license as a life settlement provider and may issue a license if the Commissioner finds that the applicant:

(A)(1) Has If a provider, has provided a detailed plan of operation;

(B)(2) Is competent and trustworthy and intends to act transact its business in good faith in the capacity involved by the license for which he or she has applied;

(C)(3) Has a good business reputation and has had experience, training, or education so as to be qualified in the business for which the license for which he or she has is applied;

(D)(4) If the applicant is a legal entity, has provided is formed or organized pursuant to the laws of this state or is a foreign legal entity authorized to transact business in this state or provides a certificate of good standing from the state of its domicile; and

(E)(5) Has provided to the Commissioner an antifraud plan that meets the requirements of this chapter. Code Section 33-59-14 and includes:

(A) A description of the procedures for detecting and investigating possible fraudulent acts and procedures for resolving material inconsistencies between medical records and insurance applications;

(B) A description of the procedures for reporting fraudulent insurance acts to the Commissioner;

(D) A written description or chart outlining the arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent insurance acts and investigating unresolved material inconsistencies between medical records and insurance applications.

(l)(8) The Commissioner may shall not issue a any license to a any nonresident applicant unless a written designation of an agent for service of process is filed and maintained with the Commissioner or unless the applicant has filed with the Commissioner the applicant´s written irrevocable consent that any action against the applicant may be commenced against the applicant by service of process on the Commissioner.

(m) The Commissioner shall not issue a license to any applicant unless the applicant has an adequate net worth as prescribed by order, rule, or regulation.

(n) Each licensee shall file with the Commissioner on or before the first day of May of each year an annual statement containing such information as the Commissioner by rule may prescribe.

(o) A provider may not use any person to perform the functions of a life settlement broker as defined in paragraph (10) of Code Section 33-59-2 unless the person holds a current, valid registration as a life settlement broker and as provided in this Code section.

(p) A life settlement broker may not use any person to perform the functions of a provider as defined in paragraph (18) of Code Section 33-59-2 unless such person holds a current, valid license as a provider and as provided in this Code section.

(q)(9) A life settlement provider and a life settlement broker shall provide to the Commissioner new or revised information about officers, stockholders of 10 percent or more stockholders, partners, directors, members, or and designated employees within 30 days of the any change.

(r) An individual registered as a life settlement broker shall complete on a biennial basis 15 hours of training related to life settlements and life settlement transactions as required by the Commissioner; provided, however, that a life insurance producer who is operating as a life settlement broker pursuant to this Code section shall not be subject to the requirements of this subsection. Any person failing to meet the requirements of this subsection shall be subject to the penalties imposed by the Commissioner.

33-59-4.

(a) The Commissioner may refuse to issue, suspend, revoke, or refuse to renew the license of a life settlement provider any licensee if the Commissioner finds that:

(1) There was any material misrepresentation in the application for the license;

(2) The licensee or any officer, partner, member, or key management personnel director has been convicted guilty of fraudulent or dishonest practices, is subject to a final administrative action, or is otherwise shown to be untrustworthy or incompetent to act as a licensee;

(3) The licensee provider demonstrates a pattern of unreasonable unreasonably withholding payments to sellers policy owners;

(4) The licensee no longer meets the requirements for initial licensure;

(4)(5) The licensee or any officer, partner, member, or key management personnel director has been found guilty convicted of, or has pleaded guilty or nolo contendere to, any a felony, or to a any misdemeanor of which criminal fraud is an element; or the licensee has pleaded guilty or nolo contendere with respect to any felony or any misdemeanor of which criminal involving fraud or moral turpitude, is an element regardless of whether a judgment or of conviction has been entered by the court;

(5)(6) The licensee provider has entered into any life settlement contract that has not been approved pursuant to this chapter;

(6)(7) The licensee provider has failed to honor contractual obligations set out in a life settlement contract;

(7) The licensee no longer meets the requirements for initial licensure;

(8) The licensee provider has assigned, transferred, or pledged a purchased settled policy to a person other than a life settlement provider licensed in this state, purchaser, an accredited investor or qualified institutional buyer as defined, respectively, in Regulation D, Rule 501, or Rule 144A of the Federal federal Securities Act of 1933, as amended, a financing entity, a special purpose entity, or a related provider trust; or

(9) The applicant or licensee or any officer, partner, member, or key management personnel or any life insurance producer has violated a provision any of the provisions of this chapter; or

(10) The provider has failed to maintain an adequate net worth.

(b) The Before the Commissioner may suspend, revoke, or refuse denies a license application or suspends, revokes, or refuses to renew the license of a life insurance producer if the Commissioner finds that such life insurance producer has violated the provisions of any licensee under this chapter, the Commissioner shall conduct a hearing in accordance with Chapter 2 of this title.

(c) If the Commissioner denies a license application or suspends, revokes, or refuses to renew the license of a life settlement provider or suspends, revokes, or refuses to renew a license of a life insurance producer pursuant to this chapter, the Commissioner shall conduct a hearing in accordance with Chapter 13 of Title 50.

33-59-5.

(a) A No person may not use a any form of life settlement contract or provide to a seller a disclosure statement form in this state unless it has been filed with and approved, if required, by the Commissioner in a manner that conforms with the filing procedures and any time restrictions or deeming provisions, if any, for life insurance forms, policies, and contracts.

(b) No insurer may, as a condition of responding to a request for verification of coverage or in connection with the transfer of a policy pursuant to a life settlement contract, require that the owner, insured, provider, or life settlement broker sign any form, disclosure, consent, waiver, or acknowledgment that has not been expressly approved by the Commissioner for use in connection with life settlement contracts in this state.

(c) A person shall not use a life settlement contract form or provide to an owner a disclosure statement form in this state unless first filed with and approved by the Commissioner. The Commissioner shall disapprove a Any life settlement contract form or disclosure statement form filed with the Commissioner shall be deemed approved if it has not been disapproved within 60 days of the filing. The Commissioner shall disapprove a life settlement contract form or disclosure statement form if, in the Commissioner´s opinion, the contract or provisions contained in it therein fail to meet the requirements of Code Sections 33-59-8, 33-59-9, 33-59-11, and 33-59-15 or are unreasonable, contrary to the interests of the public, or otherwise misleading or unfair to the seller owner. At the Commissioner´s discretion, the Commissioner may require the submission of advertising material.

33-59-6.

(a)(1) Each life settlement For any policy settled within five years of policy issuance, each provider shall file with the Commissioner by March first on or before May 1 of each year an annual statement containing such information as the Commissioner prescribes may prescribe by rule or regulation. In addition to any other requirements, the annual statement shall specify the total number, aggregate face amount, and life settlement proceeds of policies settled during the immediately preceding calendar year, together with a breakdown of the information by policy issue year. The annual statement shall also include the names of the insurance companies whose policies have been settled and the life settlement brokers that have settled said policies.

(2) Such This information is shall be limited to only those transactions where the seller insured is a resident of this state and does shall not include individual transaction data regarding the business of life settlements or data which compromises the privacy of personal, financial, and health information of the seller information that there is a reasonable basis to believe could be used to identify the owner or the insured.

(3) Every provider that willfully fails to file an annual statement as required in this Code section or willfully fails to reply within 30 days to a written inquiry by the Commissioner in connection therewith, shall, in addition to other penalties provided by this chapter, be subject, upon due notice and opportunity to be heard, to a penalty of up to $250.00 per day of delay, not to exceed $25,000.00 in the aggregate, for each such failure.

(b) Except as otherwise allowed or required by law, a life settlement provider, life settlement broker, insurance company, life insurance producer, information bureau, rating agency or company, or another any other person with actual knowledge of a seller´s or an insured´s identity may shall not disclose that the identity as a seller or of an insured or the seller´s or insured´s financial or medical information that there is a reasonable basis to believe could be used to identify the insured or the insured´s financial or medical information to another any other person unless the disclosure is:

(1) Necessary Is necessary to effect a life settlement contract between the seller owner and a life settlement provider and the seller or owner and insured or both, as may be required, have provided prior written consent to the disclosure;

(2) Is necessary to effectuate the sale of life settlement contracts, or interests therein, as investments, provided that the sale is conducted in accordance with applicable state and federal securities law and provided further that the owner and the insured have both provided prior written consent to the disclosure;

(2)(3) Provided Is provided in response to an investigation or examination by the Commissioner or another any other governmental officer or agency or pursuant to the requirements of Code Section 33-59-7;

(3)(4) A Is a term of or condition to the transfer of a policy by one life settlement provider to another life settlement provider, in which case the receiving provider shall be required to comply with the confidentiality requirements of this subsection;

(4) Necessary to permit a financing entity, related provider trust, or special purpose entity to finance the purchase of policies by a life settlement provider and the seller and insured have provided prior written consent to the disclosure;

(5) Necessary Is necessary to allow the life settlement provider or life settlement broker or its their authorized representatives to make contacts for the purpose of determining health status. For the purposes of this paragraph, the term 'authorized representative' shall not include any person who has or may have any financial interest in the settlement contract other than a provider, registered life settlement broker, financing entity, related provider trust, or special purpose entity. A provider or life settlement broker shall require its authorized representative to agree in writing to adhere to the privacy provisions of this chapter; or

(6) Required Is required to purchase stop-loss coverage.

(c) Nonpublic personal information solicited or obtained in connection with a proposed or actual life settlement contract shall be subject to the provisions applicable to financial institutions under the federal Gramm-Leach-Bliley Act, P.L. 106-102 (1999), and all other state and federal laws relating to confidentiality of nonpublic personal information.

33-59-7.

(a) Authority, scope, and scheduling of examinations.

(1) The Commissioner may, when the Commissioner deems it reasonably necessary to protect the interests of the public, conduct an examination under this chapter of a licensee as often as the Commissioner in his or her sole discretion deems appropriate examine the business and affairs of any licensee or applicant for a license. The Commissioner may order any licensee or applicant to produce any records, books, files, or other information reasonably necessary to ascertain whether such licensee or applicant is acting or has acted in violation of the law or otherwise contrary to the interests of the public. The expenses incurred in conducting any examination shall be paid by the licensee or applicant.

(2) For purposes of completing an examination of a licensee under this chapter, the Commissioner may examine or investigate any person, or the business of any person, in so far as the examination or investigation is, in the sole discretion of the Commissioner, necessary or material to the examination of the licensee.

(3)(b) In lieu of an examination under this chapter of any foreign or alien licensee licensed in this state, the Commissioner may, at the Commissioner´s discretion, accept an examination report on the licensee as prepared by the commissioner Commissioner for the licensee´s state of domicile or port-of-entry state.

(c) Names of and individual identification data for all owners and insureds shall be considered private and confidential information and shall not be disclosed by the Commissioner unless required by law.

(b)(d) Record retention requirements. Records of all consummated transactions and life settlement contracts shall be maintained by the provider for three years after the death of the insured and shall be available to the Commissioner for inspection during reasonable business hours.

(1) A person required to be licensed by this chapter shall for five years retain copies of all:

(A) Proposed, offered, or executed contracts, underwriting documents, policy forms, and applications from the date of the proposal, offer, or execution of the contract, whichever is later;

(B) All checks, drafts, or other evidence and documentation related to the payment, transfer, deposit, or release of funds from the date of the transaction; and

(2) This Code section does not relieve a person of the obligation to produce these documents to the Commissioner after the retention period has expired if the person has retained the documents.

(3) Records required to be retained by this Code section shall be legible and complete and may be retained in paper, photograph, micro process, magnetic, mechanical, or electronic media or by any process that accurately reproduces or forms a durable medium for the reproduction of a record.

(c)(e) Conduct of examinations.

(1) Upon determining that an examination should be conducted, the Commissioner shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Examiners´ Handbook adopted by the National Association of Insurance Commissioners. The Commissioner may also employ such other guidelines or procedures as the Commissioner may deem appropriate use methods common to the examination of any life settlement licensee and should use those guidelines and procedures set forth in an examiners´ handbook adopted by a national organization. The Commissioner may also employ such other guidelines as the Commissioner may deem appropriate.

(2) Every licensee or person from whom information is sought, and its officers, directors, and agents shall provide to the examiners timely, convenient, and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, assets, and computer or other recordings relating to the property, assets, business, and affairs of the licensee being examined. The officers, directors, employees, and agents of the licensee or person shall facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of a licensee, by its officers, directors, employees, or agents, to submit to examination or to comply with any reasonable written request of the Commissioner shall be grounds for suspension or refusal of or nonrenewal of any license or authority held by the licensee to engage in the life settlement business or other business subject to the Commissioner´s jurisdiction. Any proceedings for suspension, revocation, or refusal of any license or authority shall be conducted pursuant to Code Section 33-2-24 Chapter 2 of this title.

(3) The Commissioner shall have the power to issue subpoenas, to administer oaths, and to examine under oath any person as to any matter pertinent to the examination. Upon the failure or refusal of a person to obey a subpoena, the Commissioner may petition a court of