As Introduced

127th General Assembly Regular Session 2007-2008

H. B. No. 404

Representatives Hottinger, Barrett 

---

A BILL

To amend sections 3916.01 to 3916.20 and to enact

1

sections 3916.031 and 3916.161 of the Revised Code

2

to make changes to the law governing viatical

3

settlements.

4

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 3916.01, 3916.02, 3916.03, 3916.04,	5
3916.05, 3916.06, 3916.07, 3916.08, 3916.09, 3916.10, 3916.11,	6
3916.12, 3916.13, 3916.14, 3916.15, 3916.16, 3916.17, 3916.18,	7
3916.19, and 3916.20 be amended and sections 3916.031 and 3916.161	8
of the Revised Code be enacted to read as follows:	9

Sec. 3916.01.  As used in this chapter:

10

(A) "Advertising" means any written, electronic, or printed	11
communication or any communication by means of recorded telephone	12
messages or transmitted on radio, television, the internet, or	13
similar communications media, including, but not limited to, film	14
strips, motion pictures, and videos, that is directly or	15
indirectly published, disseminated, circulated, or placed directly	16
before the public for the purpose of creating an interest in or	17
inducing a person to sell, assign, devise, bequest, or transfer	18
the death benefit or ownership of a life insurance policy pursuant	19
to a viatical settlement contract.	20

(B) "Business of viatical settlements" means an activity	21
involved in the offering, solicitation, negotiation, procurement,	22
effectuation, purchasing, investing, financing, monitoring,	23
tracking, underwriting, selling, transferring, assigning,	24
pledging, or hypothecating or in any other manner acquiring an	25
interest in a life insurance policy by means of viatical	26
settlement contracts or purchase agreements or any similar	27
activity related to viatical settlement contracts or purchase	28
agreements.	29

(C) "Chronically ill" means certified, at least annually, by	30
a licensed health professional as having any of the following	31
conditions:	32

(1) Being unable to perform, for at least ninety days without	33
substantial assistance from another individual due to a loss of	34
functional capacity, at least two activities of daily living,	35
including, but not limited to, eating, toileting, transferring,	36
bathing, dressing, or continence;	37

(2) Requiring substantial supervision to protect the	38
individual from threats to health and safety due to severe	39
cognitive impairment;	40

(3) Having a level of disability similar to that described in	41
division (C)(1) of this section, as determined by the United	42
States secretary of health and human services;	43

(D) "Escrow agent" means an independent third-party person	44
who, pursuant to a written agreement, controls and effects, in an	45
escrow transaction, the delivery of the escrow transaction related	46
to the acquisition of a life insurance policy pursuant to a	47
viatical settlement contract. "Escrow agent" does not include any	48
person associated, affiliated with, or under the control of a	49
person licensed under this chapter.	50

(E)(1) "Financing entity" means an underwriter, placement	51
agent, lender, purchaser of securities, purchaser of a policy or	52
certificate from a viatical settlement provider, credit enhancer,	53
or any other person that has a direct ownership interest in a	54
policy or certificate that is the subject of a viatical settlement	55
contract and to which both of the following apply:	56

(a) Its principal activity related to the transaction is	57
providing funds to effect the viatical settlement or the purchase	58
of one or more viaticated policies.	59

(b) It has an agreement in writing with one or more licensed	60
viatical settlement providers to finance the acquisition of	61
viatical settlement contracts.	62

(2) "Financing entity" does not include a non-accredited	63
investor or viatical settlement purchaser.	64

(E)(F) "Fraudulent viatical settlement act" means an act or	65
omission committed by any person who, knowingly or with intent to	66
defraud and for the purpose of depriving another of property or	67
for pecuniary gain, commits, or permits any of its employees or	68
agents to commit, any of the following acts:	69

(1) Presenting, causing to be presented, or preparing with	70
knowledge or belief that it will be presented to or by a viatical	71
settlement provider, viatical settlement broker, life expectancy	72
provider, viatical settlement purchaser, financing entity,	73
insurer, insurance broker, insurance agent, or any other person,	74
any false material information, or concealing any material	75
information, as part of, in support of, or concerning a fact	76
material to, one or more of the following:	77

(a) An application for the issuance of a viatical settlement	78
contract or insurance policy or certificate;	79

(b) The underwriting of a viatical settlement contract or	80
insurnaceinsurance policy or certificate;	81

(c) A claim for payment or benefit pursuant to a viatical	82
settlement contract or insurnaceinsurance policy or certificate;	83

(d) Any premiums paid on an insurance policy or certificate;

84

(e) Any payments and changes in ownership or beneficiary made	85
in accordance with the terms inof a viatical settlement contract	86
or insurance policy or certificate;	87

(f) The reinstatement or conversion of an insurance policy or	88
certificate;	89

(g) The solicitation, offer, effectuation, or sale of a	90
viatical settlement contract or insurance policy or certificate;	91

(h) The issuance of written evidence of a viatical settlement	92
contract or insurance policy or certificate;	93

(i) A financing transaction.

94

(2) In the furtherance of a fraud or to prevent the detection	95
of a fraud, doing any of the following:	96

(a) Removing, concealing, altering, destroying, or	97
sequestering from the superintendent of insurance the assets or	98
records of a licensee or another person engaged in the business of	99
viatical settlements;	100

(b) Misrepresenting or concealing the financial condition of	101
a licensee, financing entity, insurer, or any other person;	102

(c) Transacting the business of viatical settlements in	103
violation of any law of this state requiring a license,	104
certificate of authority, or other legal authority for the	105
transaction of the business of viatical settlements;	106

(d) Filing with the superintendent of insurance or the chief	107
insurance regulatory official of another jurisdiction a document	108
containing false information or otherwise concealing from the	109
superintendent any information about a material fact.	110

(3) Presenting, causing to be presented, or preparing with	111
knowledge or reason to believe that it will be presented, to or by	112
a viatical settlement provider, viatical settlement broker,	113
insurer, insurance agent, financing entity, viatical settlement	114
purchaser, or any other person, in connection with a viatical	115
settlement transaction or insurance transaction, an insurance	116
policy or certificate that the actor knows was fraudulently	117
obtained by the insured, the owner, or any agent of the insured or	118
ownerRecklessly entering into, negotiating, brokering, or	119
otherwise dealing in a viatical settlement contract involving a	120
life insurance policy that was obtained by presenting false	121
information of any fact material to the policy, or by concealing	122
information concerning any fact material to the policy for the	123
purpose of misleading and with the intent to defraud the insurer	124
of the policy, the viatical settlement provider, or the viator;	125

(4) Committing any embezzlement, theft, misappropriation, or	126
conversion of moneys, funds, premiums, credits or other property	127
of a viatical settlement provider, insurer, insured, viator,	128
insurance policyowner, or any other person engaged in the business	129
of viatical settlements or insurance;	130

(5) Employing any plan, financial structure, device, scheme,	131
or artifice to defraud in relation to a viaticated policy;	132

(6) Facilitating the change of the state in which a person	133
owns a policy or the state of residency of a viator to a state or	134
jurisdiction that does not have laws similar to this chapter for	135
the express purposes of evading or avoiding the provisions of this	136
chapter;	137

(7) Attempting to commit, assisting, aiding or abetting in	138
the commission of, or conspiracy to commit any act or omission	139
specified in divisions (E)(1) to (4)(6) of this section.	140

(F)(G) "Recklessly" has the same meaning as in section	141
2901.22 of the Revised Code.	142

(H) "Defraud" has the same meaning as in section 2913.01 of	143
the Revised Code.	144

(I) "Life expectancy" means an opinion or evaluation as to	145
how long a particular person is going to live.	146

(J) "Life expectancy provider" means a person who determines,	147
or claims to have the necessary education, training, and expertise	148
to determine life expectancies or mortality ratings used to	149
determine life expectancies on behalf of or in connection with any	150
of the following:	151

(1) A viatical settlement provider, viatical settlement	152
broker, or person engaged in the business of viatical settlements;	153

(2) A viatical settlement investment as defined by section	154
1707.01 of the Revised Code;	155

(3) A viatical settlement contract or viatical settlement	156
investment.	157

(K) Notwithstanding section 1.59 of the Revised Code,	158
"person" means a natural person or a legal entity, including, but	159
not limited to, an individual, partnership, limited liability	160
company, association, trust, or corporation.	161

(G)(L) "Policy" means an individual or group policy, group	162
certificate, contract, or arrangement of insurance affecting the	163
rights of a resident of this state or bearing a reasonable	164
relation to this state, regardless of whether delivered or issued	165
for delivery in this state.	166

(H)(M) "Related provider trust" means a titling trust or any	167
other trust established by a licensed viatical settlement provider	168
or a financing entity for the sole purpose of holding ownership or	169
beneficial interest in purchased policies in connection with a	170
financing transaction, provided that the trust has a written	171
agreement with the licensed viatical settlement provider under	172
which the licensed viatical settlement provider is responsible for	173
ensuring compliance with all statutory and regulatory requirements	174
and under which the trust agrees to make all records and files	175
related to viatical settlement transactions available to the	176
superintendent as if those records and files were maintained	177
directly by the licensed viatical settlement provider.	178

(I)(N) "Special purpose entity" means a corporation,	179
partnership, trust, limited liability company or other similar	180
entity formed solely to provide access, either directly or	181
indirectly, to institutional capital markets for a financing	182
entity or licensed viatical settlement provider or in connection	183
with a transaction in which the securities in the special purpose	184
entity meet either of the following standards:	185

(1) The securities are acquired by the viator or by qualified	186
institutional buyers as defined in 17 C.F.R. 230.144A, as amended.	187

(2) The securities pay a fixed rate of return commensurate	188
with established asset-backed institutional capital markets.	189

(J)(O) "Terminally ill" means certified by a physician as	190
having an illness or sicknessphysical condition that can	191
reasonably be expected to result in death in twenty-four months	192
or less.	193

(K)(P) "Viatical settlement broker" means a person that, on	194
behalf of a viator and for a fee, commission, or other valuable	195
consideration, offers or attempts to negotiate viatical	196
settlements between a viator and one or more viatical settlement	197
providers or viatical settlement brokers. "Viatical settlement	198
broker" does not include an attorney, a certified public	199
accountant, or a financial planner accredited by a nationally	200
recognized accreditation agency, who is retained to represent the	201
viator and, whose compensation is not paid directly or indirectly	202
by the viatical settlement provider or purchaser, and whose	203
viatical settlement activities are incidental to the practice of	204
the person's profession.	205

(L)(Q)(1) "Viatical settlement contract" means any of the	206
following:	207

(1)(a) A written agreement establishingbetween a viator and	208
a viatical settlement provider or any affiliate of the viatical	209
settlement provider that establishes the terms under which	210
compensation or any thing of value, that is less than the expected	211
death benefit of the insurance policy or certificate will be paid	212
in return for the viator's present or future assignment, transfer,	213
sale, devise, or bequest of the death benefit or ownership of any	214
portion of the insurance policy or certificate of insurance;	215

(2) A contract for a loan or any other financing transaction	216
secured primarily by an individual or group life insurance policy	217
or certificate, other than a loan by a life insurance company	218
pursuant to the terms of the life insurance contract or a loan	219
secured by the cash value of a policy or certificate;	220

(3) An agreement to transfer ownership or change the	221
beneficiary designation of the policy or certificate at a later	222
date, regardless of the date that compensation is paid to the	223
viator(b) A premium finance loan made for a life insurance policy	224
by a lender to a viator on, before, or after the date of issuance	225
of the policy in either of the following situations:	226

(i) The viator or the insured receives on the date of the	227
premium finance loan a guarantee of a future viatical settlement	228
value of the policy.	229

(ii) The viator or the insured agrees on the date of the	230
premium finance loan to sell the policy or any portion of the	231
policy's death benefit on any date following the issuance of the	232
policy.	233

(2) "Viatical settlement contract" does not include any of	234
the following:	235

(a) A policy loan or accelerated death benefit made by the	236
insurer pursuant to the policy's terms;	237

(b) Loan proceeds that are used solely to pay premiums for	238
the policy and the costs of the loan including interest,	239
arrangement fees, utilization fees and similar fees, closing	240
costs, legal fees and expenses, trustee fees and expenses, and	241
third-party collateral provider fees and expenses, including fees	242
payable to letter of credit issuers.	243

(c) A loan made by a regulated financial institution in which	244
the lender takes an interest in a life insurance policy solely to	245
secure repayment of a loan or, if there is a default on the loan	246
and the policy is transferred, the transfer of such a policy by	247
the lender, provided that neither the default itself nor the	248
transfer is pursuant to an agreement or understanding with any	249
other person for the purpose of evading regulation under this	250
chapter;	251

(d) A premium finance loan made by a lender that does not	252
violate sections 1321.71 to 1321.83 of the Revised Code, if the	253
premium finance loan is not described in division (Q)(1)(b) of	254
this section;	255

(e) An agreement where all parties are closely related to the	256
insured by blood or law or have a lawfully substantial economic	257
interest in the continued life, health, and bodily safety of the	258
person insured, or are trusts established primarily for the	259
benefit of such parties;	260

(f) Any designation, consent, or agreement by an insured who	261
is an employee of an employer in connection with the purchase by	262
the employer, or trust established by the employer, of life	263
insurance on the life of the employee;	264

(g) Any of the following bona fide business succession	265
planning arrangements:	266

(i) An arrangement between one or more shareholders in a	267
corporation or between a corporation and one or more of its	268
shareholders or one or more trusts established by its	269
shareholders;	270

(ii) An arrangement between one or more partners in a	271
partnership or between a partnership and one or more of its	272
partners or one or more trusts established by its partners;	273

(iii) An arrangement between one or more members in a limited	274
liability company or between a limited liability company and one	275
or more of its members or one or more trusts established by its	276
members.	277

(h) An agreement entered into by a service recipient, a trust	278
established by the service recipient and a service provider, or a	279
trust established by the service provider who performs significant	280
services for the service recipient's trade or business;	281

(i) Any other contract, transaction, or arrangement exempted	282
from the definition of viatical settlement contract by rule	283
adopted by the superintendent of insurance based on the	284
superintendent's determination that the contract, transaction, or	285
arrangement is not of the type regulated by this chapter.	286

(M)(R)(1) "Viatical settlement provider" means a person,	287
other than a viator, that enters into or effectuates a viatical	288
settlement contract.	289

(2) "Viatical settlement provider" does not include any of	290
the following:	291

(a) A bank, savings bank, savings and loan association,	292
credit union, or other regulated financial institution;	293

(b) A premium finance company exempted under section 1321.72	294
of the Revised Code from the licensure requirements of section	295
3921.73 of the Revised Code that takes an assignment of a life	296
insurance policy or certificate solely as collateral for a premium	297
finance loan;	298

(b)(c) The issuer of a life insurance policy or certificate	299
providing accelerated benefits as defined in section 3915.21 of	300
the Revised Code and pursuant to the contract;	301

(c)(d) An individual who enters into or effectuates not more	302
than one agreement in any calendar year for the transfer of life	303
insurance policies or certificates for any value less than the	304
expected death benefit;	305

(d)(e) An authorized or eligible insurer that provides stop	306
loss coverage or financial guarantee insurance to a viatical	307
settlement provider, purchaser, financing entity, special purpose	308
entity, or related provider trust;	309

(e)(f) A financing entity;

310

(f)(g) A special purpose entity;

311

(g)(h) A related provider trust;

312

(h)(i) A viatical settlement purchaser;

313

(j) Any other person the superintendent determines is not	314
consistent with the definition of viatical settlement provider.	315

(N)(S) "Viaticated policy" means a life insurance policy or	316
certificate that has been acquired by a viatical settlement	317
provider pursuant to a viatical settlement contract.	318

(O)(T) "Viator" means the owner of a life insurance policy or	319
a certificate holder under a group policy that has not previously	320
been viaticated who resides in this state and who, in return for	321
compensation or any thing of value that is less than the expected	322
death benefit of the policy or certificate, assigns, transfers,	323
sells, devises, or bequests the death benefit or ownership of any	324
portion of the insurance policy or certificate of insurance. For	325
the purposes of this chapter, a "viator" is not limited to an	326
owner of a life insurance policy or a certificate holder under a	327
group policy insuring the life of an individual with a terminal or	328
chronic illness or condition except where specifically addressed.	329
"Viator" does not include any of the following:	330

(1) A licenseeviatical settlement provider or viatical	331
settlement broker licensed under this chapter;	332

(2) An accredited investor orA qualified institutional buyer	333
as defined respectively in Regulation D, Rule 501 or Rule 144A of	334
the Securities Act of 193317 C.F.R. 230.144A, as amended;	335

(3) A financing entity;

336

(4) A special purpose entity;

337

(5) A related provider trust.

338

(P)(U) "Viatical settlement purchaser" means a person who	339
givesprovides a sum of money as consideration for a life	340
insurance policy or an interest in the death benefits of a life	341
insurance policy that has been or will be the subject of a	342
viatical settlement contract, or a person who owns, acquires, or	343
is entitled to a beneficial interest in a trust that owns a	344
viatical settlement contract or is the beneficiary of a life	345
insurance policy that has been or will be the subject of a	346
viatical settlement contract, for the purpose of deriving an	347
economic benefit. "Viatical settlement purchaser" does not include	348
any of the following:	349

(1) A licenseeviatical settlement provider or viatical	350
settlement broker licensed under this chapter;	351

(2) An accredited investor or qualified institutional buyer	352
as defined respectively in Regulation D, Rule 501 or Rule 144A of	353
17 C.F.R. 230.501 adopted under the "Securities Act of 1933," 48	354
Stat. 77, 15 U.S.C. 77a et seq. as amended;	355

(3) A qualified institutional buyer as defined in 17 C.F.R.	356
230.144A;	357

(4) A financing entity;

358

(4)(5) A special purpose entity;

359

(5)(6) A related provider trust.

360

(Q)(V) "Licensee" means a person licensed as a viatical	361
settlement provider, viatical settlement broker, or life	362
expectancy provider under this chapter.	363

(R)(W) "NAIC" means the national association of insurance	364
commissioners.	365

(S) "Securities Act of 1933" has the same meaning as in	366
section 1707.01 of the Revised Code(X) "Regulated financial	367
institution" means a bank, a savings association, or credit union	368
operating under authority granted by the superintendent of	369
financial institutions, the regulatory authority of any other	370
state of the United States, the office of thrift supervision, the	371
national credit union administration, or the office of the	372
comptroller of the currency.	373

Sec. 3916.02. No(A) Notwithstanding division (C) of this	374
section, no person shall operate in this state as a viatical	375
settlement provider or, viatical settlement broker, or life	376
expectancy provider without first having obtained a license from	377
the superintendent of insurance and, if different fromthe owner	378
of the insurance policy to be viaticated is not a resident of this	379
state, from the comparable official of the state of residence of	380
the viatorowner. If	381

(B) If there is more than one viatorowner on a single policy	382
or certificate and the viatorsowners are residents of different	383
states, the viatical settlement shall be governed by the law of	384
the state in which the viatorowner having the largest percentage	385
ownership of the policy or certificate resides or, if the viators	386
owners hold equal ownership, the state of residence of one viator	387
owner agreed upon in writing by all viatorsowners.	388

(C) A person who represents the viator and is not compensated	389
directly or indirectly by the viatical settlement provider, who is	390
licensed as an attorney, certified public accountant, or financial	391
planner accredited by a nationally recognized accreditation agency	392
may negotiate viatical settlement contracts on behalf of a viator	393
without obtaining a license pursuant to division (A) of this	394
section.	395

Sec. 3916.03.  (A) An applicant for a license as a viatical	396
settlement provider or, viatical settlement broker, or life	397
expectancy provider shall submit an application for the license in	398
a manner prescribed by the superintendent of insurance. The	399
application shall be accompanied by a fee established by the	400
superintendent by rule adopted in accordance with chapterChapter	401
119. of the Revised Code.	402

(B) A license issued under this chapter to a person other	403
than an individual authorizes all partners, officers, members, or	404
designated employees of the person to act as viatical settlement	405
providers or viatical settlement brokers, as applicable, and all	406
those partners, officers, members, or designated employees shall	407
be named in the application and any supplements to the	408
application.	409

(C) Upon the filing of an application under this section and	410
the payment of the license fee, the superintendent shall make an	411
investigation of the applicant and issue to the applicant a	412
license that states in substance that the person is authorized to	413
act as a viatical settlement provider or, viatical settlement	414
broker, or life expectancy provider, as applicable, if all of the	415
following apply:	416

(1) Regarding an application for a license as a viatical	417
settlement provider, the applicant provides a detailed plan of	418
operation.	419

(2) The superintendent finds all of the following:

420

(a) The applicant is competent and trustworthy and intends to	421
act in good faith in the capacity of a viatical settlement	422
provider or, viatical settlement broker, or life expectancy	423
provider, as applicable.	424

(b) The applicant has a good business reputation and has had	425
experience, training, or education so as to be qualified to act in	426
the capacity of a viatical settlement provider or, viatical	427
settlement broker, or life expectancy provider, as applicable.	428

(3) If the applicant is a person other than an individual,	429
the applicant provides a certificate of good standing from the	430
state of its domicile.	431

(4) The applicant provides an antifraud plan that meets the	432
requirements of division (G) of section 3916.18 of the Revised	433
Code.	434

(5) Regarding an application for a license as a viatical	435
settlement provider or a viatical settlement broker, the applicant	436
has demonstrated financial responsibility pursuant to division (D)	437
of this section.	438

(D)(1) An applicant for license as a viatical settlement	439
provider or viatical settlement broker shall provide proof of	440
financial responsibility in a format prescribed by the	441
superintendent in the amount of two hundred fifty thousand dollars	442
through either of the following means:	443

(a) A surety bond executed and issued by an insurer	444
authorized to issue surety bonds in this state. The bond shall be	445
in favor of this state and shall authorize recovery by the	446
superintendent on behalf of any person in this state who sustains	447
damages as a result of an erroneous act, failure to act,	448
conviction of fraud or conviction of unfair practices committed by	449
a licensed viatical settlement provider or licensed viatical	450
settlement broker.	451

(b) A deposit of cash, certificates of deposit, or securities	452
in any combination.	453

(2) If an applicant is licensed as a viatical settlement	454
provider or viatical settlement broker in another state, the	455
superintendent shall accept as valid any similar proof of	456
financial responsibility the applicant filed in that state.	457

(3) The superintendent may request proof of financial	458
responsibility at any time the superintendent considers necessary.	459

(E) An applicant shall provide all information requested by	460
the superintendent. The superintendent may, at any time, require	461
an applicant to fully disclose the identity of all stockholders,	462
partners, officers, members, and employees, and may, in the	463
exercise of the superintendent's discretion, refuse to issue a	464
license to an applicant that is not an individual if the	465
superintendent is not satisfied that each officer, employee,	466
stockholder, partner, or member who may materially influence the	467
applicant's conduct meets the standards set forth in this chapter.	468

(E)(F) Except as otherwise provided in this division, a	469
license as a viatical settlement provider or, viatical settlement	470
broker, or life expectancy provider expires on the last day of	471
March next after its issuance or continuance. A license as a	472
viatical settlement provider or, viatical settlement broker, or	473
life expectancy provider may, in the discretion of the	474
superintendent and the payment of an annual renewal fee	475
established by the superintendent by rule adopted in accordance	476
with chapterChapter 119. of the Revised Code, be continued past	477
the last day of March next after its issue and after the last day	478
of March in each succeeding year. Failure to pay the renewal fee	479
by the required date results in the expiration of the license	480
without a hearing under Chapter 119. of the Revised Code.	481

(F)(G) Any individual licensed as a viatical settlement	482
broker shall complete not less than fifteen hours of continuing	483
education biennially. The superintendent shall approve continuing	484
education courses that shall be related to viatical settlements	485
and viatical settlement transactions. The superintendent shall	486
adopt rules for the enforcement of this division.	487

(H) The superintendent shall not issue a license to a	488
nonresident applicant, unless either of the following applies:	489

(1) The applicant files and maintains a written designation	490
of an agent for service of process with the superintendent.	491

(2) The applicant has filed with the superintendent the	492
applicant's written irrevocable consent that any action against	493
the applicant may be commenced against the applicant by service of	494
process on the superintendent.	495

(G)(I) A viatical settlement provider or, viatical settlement	496
broker, or life expectancy provider shall provide to the	497
superintendent new or revised information regarding any change in	498
its officers, any stockholder owning ten per cent or more of its	499
stockholdersstock, or its partners, directors, members, or	500
designated employees within thirty days of the change.	501

(H)(J) Any fee collected under this section shall be paid	502
into the state treasury to the credit of the department of	503
insurance operating fund created by section 3901.021 of the	504
Revised Code.	505

Sec. 3916.031.  (A) Any corporation, partnership, or other	506
business that is licensed as a viatical settlement broker shall	507
maintain at least one designated individual who is individually	508
licensed as a viatical settlement broker to be responsible for the	509
business's compliance with this chapter.	510

(B) Notwithstanding division (B) of section 3916.15 of the	511
Revised Code, the superintendent of insurance may revoke without a	512
hearing under Chapter 119. of the Revised Code the license of any	513
business that does not meet the requirement of this section.	514

Sec. 3916.04.  Irrespective of the manner in which the	515
licensed viatical settlement broker is compensated, a licensed	516
viatical settlement broker is deemed to represent only the viator	517
and owes a fiduciary duty to the viator to act according to the	518
viator's instructions and in the best interest of the viator.	519

Sec. 3916.05.  (A) A person shall not use a viatical	520
settlement contract form or provide a disclosure statement form to	521
a viator in this state unless the viatical settlement contract	522
form or the disclosure statement form is filed with and approved	523
by the superintendent of insurance. The superintendent shall	524
disapprove a viatical settlement contract form or a disclosure	525
statement form if, in the superintendent's opinion, the viatical	526
settlement contract form, the disclosure statement form, or any	527
provision contained therein fails to meet the requirements of	528
section 3916.06 of the Revised Code, is unreasonable, is contrary	529
to the interests of the public, or is otherwise misleading or	530
unfair to the viator. At the superintendent's discretion, the	531
superintendent may require the submission of advertising material	532
to which section 3916.17 of the Revised Code applies.	533

(B) The superintendent may adopt rules in accordance with	534
Chapter 119. of the Revised Code to establish reasonable fees for	535
any service or transaction performed by the department of	536
insurance pursuant to division (A) of this section. Any fee	537
collected pursuant to those rules shall be paid into the state	538
treasury to the credit of the department of insurance operating	539
fund created by section 3901.021 of the Revised Code.	540

Sec. 3916.06.  (A)(1) With each application for a viatical	541
settlement, a licensed viatical settlement provider or licensed	542
viatical settlement broker shall disclose at least the following	543
to a viator no later than the time all parties sign the	544
application for the viatical settlement contract:	545

(a) That there are possible alternatives to viatical	546
settlement contracts, including any accelerated death benefits	547
offered under the viator's life insurance policy or certificate;	548

(b) That some or all of the proceeds of the viatical	549
settlement may be subject to federal income taxation and state	550
franchise and income taxation, and that assistance should be	551
sought from a professional tax advisor;	552

(c) That the proceeds of the viatical settlement could be	553
subject to the claims of creditors;	554

(d) That receipt of the proceeds of the viatical settlement	555
may adversely affect the viator's eligibility for medical	556
assistance under Chapter 5111. of the Revised Code or other	557
government benefits or entitlements, and that advice should be	558
obtained from the appropriate government agencies;	559

(e) That the viator has a right to rescind the viatical	560
settlement contract for at least fifteenby providing notice of	561
rescission and repaying all proceeds and any premiums, loans, and	562
loan interest paid as a result of the viatical settlement within	563
sixty calendar days after all parties sign the viatical settlement	564
contract or thirty calendar days after the viator receives the	565
viatical settlement proceeds, as provided in section 3916.08 of	566
the Revised Code, whichever is sooner. If the insured dies during	567
the rescission period, the viatical settlement contract shall be	568
deemed to have been rescinded, subject to repayment by the viator	569
or the viator's estate of all viatical settlement proceeds and any	570
premiums, loans, and loan interest to the viatical settlement	571
companylicensed viatical settlement provider within sixty days of	572
the death of the insured.	573

(f) That funds will be sent to the viator within three	574
business days after the licensed viatical settlement provider has	575
received written acknowledgment from the insurer or group	576
administrator that ownership of the policy or interest in the	577
certificate has been transferred and that the beneficiary has been	578
designated pursuant to the viatical settlement contract;	579

(g) That entering into a viatical settlement contract may	580
cause other rights or benefits, including conversion rights and	581
waiver of premium benefits that may exist under the policy or	582
certificate, to be forfeited by the viator and that assistance	583
should be sought from a financial advisor.	584

(h) That following execution of the viatical settlement	585
contract, the licensed viatical settlement provider, or the	586
licensed viatical settlement provider's authorized representative	587
may contact the insured for the purpose of determining the	588
insured's health status and to confirm the insured's residential	589
or business address and telephone number or for other purposes	590
permitted by law. Any such contact shall be limited to once in	591
any three-month period if the insured has a life expectancy of	592
more than one year or to once per month if the insured has a life	593
expectancy of one year or less.	594

(2) The licensed viatical settlement provider or licensed	595
viatical settlement broker shall provide the disclosures under	596
division (A)(1) of this section in a separate document that is	597
signed by the viator and the licensed viatical settlement provider	598
or licensed viatical settlement broker.	599

(3) Disclosure to a viator under division (A)(1) of this	600
section shall include distribution of a brochure describing the	601
process of viatical settlements. The licensed viatical settlement	602
provider or licensed viatical settlement broker shall use the	603
NAIC's form for the brochure unless another one is developed or	604
approved by the superintendent.	605

(4) The disclosure document under division (A)(1) of this	606
section shall contain the following language:	607

"All medical, financial, or personal information solicited or	608
obtained by a viatical settlement provider or viatical settlement	609
broker about an insured, including the insured's identity or the	610
identity of family members, a spouse, or a significant other may	611
be disclosed as necessary to effect the viatical settlement	612
between the viator and the viatical settlement provider. If you	613
are asked to provide this information, you will be asked to	614
consent to the disclosure. The information may be provided to	615
someone who buys the policy or provides funds for the purchase.	616
You may be asked to renew your permission to share information	617
every two years."	618

(B)(1) A licensed viatical settlement provider shall disclose	619
at least the following to a viator prior to the date the viatical	620
settlement contract is signed by all the necessary parties:	621

(a) The affiliation, if any, between the licensed viatical	622
settlement provider and the issuer of the insurance policy or	623
certificate to be viaticated;	624

(b) The name, business address, and telephone number of the	625
licensed viatical settlement provider;	626

(c) Regarding a viatical settlement broker, the amount and	627
method of calculating the broker's compensation. As used in this	628
division, "compensation" includes anything of value paid or given	629
to a viatical settlement broker for the placement of a policy or	630
certificate.Any affiliations or contractual arrangements between	631
the licensed viatical settlement provider and the viatical	632
settlement purchaser;	633

(d) If an insurance policy or certificate to be viaticated	634
has been issued as a joint policy or certificate or involves	635
family riders or any coverage of a life other than the insured	636
under the policy or certificate to be viaticated, the possible	637
loss of coverage on the other lives under the policy or	638
certificate and that advice should be sought from the viator's	639
insurance produceragent or the company issuing the policy or	640
certificate;	641

(e) The dollar amount of the current death benefit payable to	642
the licensed viatical settlement provider under the policy or	643
certificate, and, if known, the availability of any additional	644
guaranteed insurance benefits, the dollar amount of any accidental	645
death and dismemberment benefits under the policy or certificate,	646
and the viatical settlement provider'sextent to which the	647
viator's interest in those benefits will be transferred as a	648
result to the viatical settlement contract.	649

(f) TheWhether the funds will be in escrow with an escrow	650
agent during the transfer process and, if so, the name, business	651
address, and telephone number of the independent third-party	652
escrow agent, and the fact that the viator or owner may inspect or	653
receive copies of the relevant escrow or trust agreements or	654
documents.	655

(2) The licensed viatical settlement broker shall disclose at	656
least the following to a viator prior to the date the viatical	657
settlement contract is signed by all the necessary parties:	658

(a) The name, business address, and telephone number of the	659
licensed viatical settlement broker;	660

(b) A full, complete, and accurate description of all offers,	661
counter-offers, acceptances, and rejections relating to the	662
proposed viatical settlement contract;	663

(c) Any affiliations or contractual agreements between the	664
licensed viatical settlement broker and any person making an offer	665
in connection with the proposed viatical settlement contract;	666

(d) The amount and method of calculating the licensed	667
viatical settlement broker's compensation and, if any portion of	668
the licensed viatical settlement broker's compensation is taken	669
from the viatical settlement offer, the total amount of the	670
viatical settlement offer and the licensed viatical settlement	671
broker's compensation as a percentage of that total. As used in	672
this division, "compensation" includes anything of value paid or	673
given to a licensed viatical settlement broker for the placement	674
of a policy.	675

(3) The licensed viatical settlement provider or licensed	676
viatical settlement broker shall conspicuously display the	677
disclosures required under divisiondivisions (B)(1) and (2) of	678
this section in the viatical settlement contract or in a separate	679
document signed by the viator and the licensed viatical settlement	680
provider or licensed viatical settlement broker, as appropriate.	681

(C) If the licensed viatical settlement provider transfers	682
ownership or changes the beneficiary of the insurance policy or	683
certificate, the licensed viatical settlement provider shall	684
communicate in writing the change in ownership or beneficiary to	685
the insured within twenty days after the change.	686

(D) If, for the purpose of engaging in the business of	687
viatical settlements, a licensed viatical settlement broker or	688
licensed viatical settlement provider is party to a plan,	689
transaction, or series of transactions to originate, renew,	690
continue, or finance a life insurance policy with the insurer	691
that issued the policy within the first five years of the	692
issuance of that policy the licensed viatical settlement broker or	693
licensed viatical settlement provider shall fully disclose the	694
plan, transaction, or series of transactions to that insurer	695
prior to the initiation of the plan, transaction, or series of	696
transactions.	697

Sec. 3916.07.  (A) A licensed viatical settlement provider	698
entering into a viatical settlement contract shall first obtain	699
all of the following:	700

(1) If the viator is the insured, a written statement from an	701
attending physician that the viator is of sound mind and under no	702
constraint or undue influence to enter into a viatical settlement	703
contract. As used in this division, "physician" means a person	704
authorized under Chapter 4731. of the Revised Code to practice	705
medicine and surgery or osteopathic medicine and surgery.	706

(2) A document in which the insured consents in writing, as	707
required by division (E) of section 3916.13 of the Revised Code,	708
to the release of the insured's medical records to a licensed	709
viatical settlement provider or licensed viatical settlement	710
broker and to the insurance company that issued the life insurance	711
policy or certificate covering the life of the insured.	712

(B) Within twenty days after a viator executes documents	713
necessary to transfer any rights under an insurance policy or	714
certificate or within twenty days of entering any expressed or	715
implied agreement, option, promise, or other form of understanding	716
to viaticate the policy, the licensed viatical settlement provider	717
shall give written notice to the insurer that issued that	718
insurance policy or certificate that the policy or certificate has	719
or will become a viaticated policy or certificate. The notice	720
shall be accompanied by the documents required by division (C) of	721
this section.	722

(C) The licensed viatical settlement provider shall deliver a	723
copy of the medical release required under division (A)(2) of	724
this section, a copy of the viator's application for the viatical	725
settlement contract, the notice required under division (B) of	726
this section, and a request for verification of coverage to the	727
insurer that issued the life insurance policy or certificate that	728
is the subject of the viatical transaction. The licensed viatical	729
settlement provider shall use the NAIC's form for verification of	730
coverage unless standards for verification areanother form is	731
developed or approved by the superintendent of insurance.	732

(D) The insurer shall respond to a request for verification	733
of coverage submitted on an approved form by a licensed viatical	734
settlement provider or licensed viatical settlement broker within	735
thirty calendar days after the date the request is received and	736
shall indicate whether, based on the medical evidence and	737
documents provided, the insurer intends to pursue an	738
investigation at that time regarding possible fraud or the	739
validity of the life insurance contract or certificate that is	740
the subject of the request. The insurer shall accept an original	741
or facsimile or electronic copy of such request and any	742
accompanying authorization signed by the viator. Failure by the	743
insurer to meet its obligations under this division is a	744
violation of division (D) of section 3916.16 and section 3916.21	745
of the Revised Code.	746

(E) Prior to or at the time of execution of the viatical	747
settlement contract, the licensed viatical settlement provider	748
shall obtain a witnessed document in which the viator consents to	749
the viatical settlement contract, represents that the viator has a	750
full and complete understanding of the viatical settlement	751
contract and a full and complete understanding of the benefits of	752
the life insurance policy or certificate, and acknowledges that	753
the viator is entering into the viatical settlement contract	754
freely and voluntarily and, for persons with a terminal or chronic	755
illness or condition, acknowledges that the insured has a terminal	756
or chronic illness and that the terminal or chronic illness or	757
condition was diagnosed after the life insurance policy or	758
certificate was issued.	759

(F) If a licensed viatical settlement broker performs any of	760
the activities specified in this section on behalf of the licensed	761
viatical settlement provider, the licensed viatical settlement	762
provider is deemed to have fulfilled the requirements of this	763
section.	764

(G) All medical information solicited or obtained by any	765
licensee shall be subject to the applicable provisions of state	766
law relating to confidentiality of medical information.	767

Sec. 3916.08. (A) Each viatical settlement contract entered	768
into in this state shall provide the viator with an unconditional	769
absolute right to rescind the contract for at least fifteenby	770
providing notice of rescission and repaying all proceeds and any	771
premiums, loans, and loan interest paid as a result of the	772
viatical settlement within sixty calendar days after all parties	773
sign the viatical settlement contract or thirty calendar days	774
after the receipt of the viatical settlement proceeds pursuant to	775
division (A) of section 3916.09 of the Revised Code. If the	776
insured dies during the rescission period, the viatical settlement	777
contract is deemed to have been rescinded, subject to repayment of	778
all viatical settlement proceeds and any premiums, loans, and loan	779
interest to the licensed viatical settlement provider within sixty	780
days of the death of the insured. If	781

(B) If a licensed viatical settlement provider has paid	782
commissions or other compensation to a licensed viatical	783
settlement broker and the viator rescinds the viatical settlement	784
contract, the licensed viatical settlement broker shall refund all	785
such commissions and compensation to the licensed viatical	786
settlement provider, within five business days following receipt	787
of written notice from the licensed viatical settlement provider.	788
The notice shall include a copy of the viator's notice of	789
recession or the notice of the death of the viator.	790

(C) If a viatical settlement contract is rescinded by the	791
viator pursuant to this section, ownership of the insurance policy	792
or certificate reverts to the viator or to the viator's estate if	793
the viator is deceased, irrespective of any transfer of ownership	794
of the policy or certificate by the viator, licensed viatical	795
settlement provider, or any other person.	796

Sec. 3916.09.  (A) The licensed viatical settlement provider	797
shall instruct the viator to send the executed documents required	798
to effect the change in ownership, assignment, or change in	799
beneficiary directly to the independent escrow agent. Within three	800
business days after the date the escrow agent receives the	801
documents, or from the date the licensed viatical settlement	802
provider receives the documents if the viator erroneously provides	803
the documents directly to the licensed viatical settlement	804
provider, the licensed viatical settlement provider shall pay or	805
transfer the proceeds of the viatical settlement to an escrow or	806
trust account in a state or federally charteredregulated	807
financial institution whose deposits are insured by the federal	808
deposit insurance corporation. Upon payment of the settlement	809
proceeds into the escrow or trust account, the escrow agent or	810
trustee shall deliver the original change in ownership,	811
assignment, or change in beneficiary forms to the licensed	812
viatical settlement provider, a representative of the licensed	813
viatical settlement provider, or related provider trust. Upon the	814
licensed provider'sescrow agent's receipt of the acknowledgment	815
of the properly completed transfer of ownership, assignment, or	816
designation of beneficiary from the insurance company, the	817
licensed providerescrow agent shall instruct the escrow agent to	818
pay the settlement proceeds to the viator. The escrow agent shall	819
make payment within three business days of the date the provider	820
received the acknowledged forms from the insurance companyFunds	821
are considered sent by a licensed viatical settlement provider to	822
a viator as of the date that the escrow agent either releases the	823
funds for wire transfer to the viator or places a check for	824
delivery to the viator via United States postal service or other	825
nationally recognized delivery service.	826

(B) Failure to transfer the proceeds to the viator within the	827
period of time disclosed pursuant to division (A)(1)(f) of section	828
3916.06 of the Revised Code renders the viatical settlement	829
contract voidable by the viator for lack of consideration until	830
the time consideration is tendered to and accepted by the viator.	831
If a viatical settlement contract is voided by the viator pursuant	832
to this division, ownership of the insurance policy or certificate	833
reverts to the viator or to the viator's estate if the viator is	834
deceased, irrespective of any transfer of ownership of the policy	835
or certificate by the viator, licensed viatical settlement	836
provider, or any other person.	837

Sec. 3916.10.  After a viatical settlement has occurred,	838
contact with the insured for the purpose of determining the health	839
status of the insured by the licensed viatical settlement provider	840
or licensed viatical settlement broker shall be made only by the	841
licensed viatical settlement provider or, licensed viatical	842
settlement broker licensed in this state, or the authorized	843
representative of the licensed viatical settlement provider or	844
licensed viatical settlement broker. The licensed viatical	845
settlement provider or, licensed viatical settlement broker, or	846
authorized representative shall not contact the insured for the	847
purpose of determining the insured's health status more than once	848
every three months if the insured has a life expectancy of more	849
than one year, or more than once per month if the insured has a	850
life expectancy of one year or less. The licensed viatical	851
settlement provider or licensed viatical settlement broker shall	852
explain the procedure for making these contacts at the time the	853
viatical settlement contract is entered into.	854

The limitations set forth in this section do not apply to	855
contacts made with an insured under a viaticated policy for	856
purposes other than to determine the insured's health status.	857

ViaticalLicensed viatical settlement providers and licensed	858
viatical settlement brokers are responsible for the actions of	859
their authorized representatives, for the purposes of this	860
section.	861

Sec. 3916.11.  (A)(1) A licensee under this chapterlicensed	862
viatical settlement provider and licensed viatical settlement	863
broker shall, for five years, retain copies of all of the	864
following:	865

(a) All proposed, offered, or executed contracts, purchase	866
agreements, underwriting documents, policy forms, and applications	867
from the date of the proposal, offer, or execution of the contract	868
or purchase agreement, whichever is later;	869

(b) All checks, drafts, or other evidence and documentation	870
related to the payment, transfer, deposit, or release of funds	871
from the date of the transaction;	872

(c) All other records and documents related to the	873
requirements of this chapter.	874

(2) This section does not relieve a person of the obligation	875
to produce the documents described in division (A)(1) of this	876
section to the superintendent of insurance after the retention	877
period specified in that division has expired if the person has	878
retained the documents.	879

(3) Records required to be retained by this section must be	880
legible and complete and may be retained in paper, photograph,	881
microprocess, magnetic, mechanical, or electronic media, or by any	882
process that accurately reproduces or forms a durable medium for	883
the reproduction of a record.	884

(B)(1) Upon determining that an examination should be	885
conducted, subject to division (E) of this section, the	886
superintendent shall appoint one or more examiners to perform the	887
examination and instruct them as to the scope of the examination.	888
The superintendent may employ any guidelines or procedures for	889
purposes of this division that the superintendent considers	890
appropriate.	891

(2) Every licenseelicensed viatical settlement provider,	892
licensed viatical settlement broker, or person from whom	893
information is sought, and all officers, directors, employees,	894
and agents of any licenseelicensed viatical settlement provider,	895
licensed viatical settlement broker, or person from whom	896
information is sought, shall provide to the examiners timely,	897
convenient, and free access at all reasonable hours at the	898
licensee'slicensed viatical settlement provider, licensed	899
viatical settlement broker, or person's offices to all books,	900
records, accounts, papers, documents, assets, and computer or	901
other recordings relating to the property, assets, business, and	902
affairs of the licenseelicensed viatical settlement provider or	903
licensed viatical settlement broker being examined. The officers,	904
directors, employees, and agents of the licenseelicensed	905
viatical settlement provider, licensed viatical settlement broker,	906
or person shall facilitate the examination and aid in the	907
examination so far as it is in their power to do so.	908

The refusal of a licenseelicensed viatical settlement	909
provider or licensed viatical settlement broker, by its officers,	910
directors, employees, or agents, to submit to examination or to	911
comply with any reasonable written request of the superintendent	912
shall be grounds for suspension, revocation, denial of issuance,	913
or nonrenewal of any license or authority held by the licensee	914
viatical settlement provider or viatical settlement broker to	915
engage in the viatical settlement business or other business	916
subject to the superintendent's jurisdiction. Any proceedings for	917
suspension, revocation, or denial, or nonrenewal of any license or	918
authority is subject to chapterChapter 119. of the Revised Code.	919

(3) The superintendent has the power to issue subpoenas, to	920
administer oaths, and to examine under oath any person as to any	921
matter pertinent to the examination. Upon the failure or refusal	922
of a person to obey a subpoena, the superintendent may petition a	923
court of competent jurisdiction, and, upon proper showing, the	924
court may enter an order compelling the witness to appear and	925
testify or produce documentary evidence. Failure to obey the court	926
order shall be punishable as contempt of court.	927

(4) When making an examination under this chapter, the	928
superintendent may retain attorneys, appraisers, independent	929
actuaries, independent certified public accountants, or other	930
professionals and specialists as examiners, and the licensee	931
licensed viatical settlement provider or licensed viatical	932
settlement broker that is the subject of the examination shall	933
bear the cost of those examiners. Examiners who are appointed by	934
the superintendent, but who are not employees of the department	935
of insurance, shall be compensated for their work, travel, and	936
living expenses at reasonable and customary rates.	937

(5) Nothing contained in this chapter limits the	938
superintendent's authority to terminate or suspend an examination	939
in order to pursue other legal or regulatory action pursuant to	940
the insurance laws of this state. Findings of fact and conclusions	941
made pursuant to any examination shall be prima-facie evidence in	942
any legal or regulatory action.	943

(6) Nothing contained in this chapter limits the	944
superintendent's authority to use and, if appropriate, to make	945
public any final or preliminary examination report, any examiner	946
or licenseelicensed viatical settlement provider or licensed	947
viatical settlement broker working papers or other documents, or	948
any other information discovered or developed during the course	949
of any examination in the furtherance of any legal or regulatory	950
action that the superintendent, in the superintendent's sole	951
discretion, considers appropriate.	952

(C)(1) Examination reports shall be comprised of only facts	953
appearing upon the books, records, or other documents of the	954
licensee, its agents, or other persons examined, or as ascertained	955
from the testimony of its officers, agents, or other persons	956
examined concerning its affairs, and the conclusions and	957
recommendations that the examiners find reasonably warranted from	958
the facts.	959

(2) Upon completion of the examination, the examiner in	960
charge shall file with the superintendent a verified written	961
report of examination. Upon receipt of the verified report, the	962
superintendent shall transmit the report to the licenseelicensed	963
viatical settlement provider or licensed viatical settlement	964
broker examined, together with a notice that shall afford the	965
licenseelicensed viatical settlement provider or licensed	966
viatical settlement broker examined a reasonable opportunity of	967
not more than thirty days from receipt of the report to make a	968
written submission or rebuttal with respect to any matters	969
contained in the examination report.	970

(3) If the superintendent determines that regulatory action	971
is appropriate as a result of an examination, the superintendent	972
may initiate any proceedings or actions provided by law.	973

(D)(1) Names and individual identification data for all	974
viators shall be considered private and confidential information	975
and shall not be disclosed by the superintendent, unless required	976
by law.	977

(2) Except as otherwise provided in this chapter or in the	978
law of another state or jurisdiction that is substantially similar	979
to this chapter, all examination reports, working papers, recorded	980
information, documents, and copies of those reports, papers,	981
information, documents, and copies produced by, obtained by, or	982
disclosed to the superintendent or to any other person in the	983
course of an examination made under this chapter or under the law	984
of another state or jurisdiction that is substantially similar to	985
this chapter, or in the course of the superintendent's analysis or	986
investigation of the financial condition or market conduct of a	987
licensee are confidential by law and privileged, are not a public	988
record open for inspection under section 149.43 of the Revised	989
Code, are not subject to subpoena, and are not subject to	990
discovery or admissible in evidence in any private civil action.	991
The superintendent may use the documents, materials, or other	992
information in the furtherance of any regulatory or legal action	993
brought as part of the superintendent's official duties.	994

(3) Documents, materials, or other information, including,	995
but not limited to, all working papers, and copies of working	996
papers, in the possession or control of the NAIC and its	997
affiliates and subsidiaries are confidential by law and	998
privileged, are not subject to subpoena, and are not subject to	999
discovery or admissible in evidence in any private civil action,	1000
if either of the following applies:	1001

(a) They are created, produced, or obtained by or disclosed	1002
to the NAIC and its affiliates and subsidiaries in the course of	1003
assisting an examination made under this chapter or assisting the	1004
superintendent or the comparable official in another state in the	1005
analysis or investigation of the financial condition or market	1006
conduct of a licensee.	1007

(b) The superintendent or the comparable official in another	1008
state discloses them to the NAIC and its affiliates and	1009
subsidiaries under division (D)(5) of this section or under a	1010
comparable provision in the law of the other state.	1011

(4) Neither the superintendent nor any person that received	1012
the documents, material, or other information while acting under	1013
the authority of the superintendent, including the NAIC and its	1014
affiliates and subsidiaries, shall be permitted to testify in any	1015
private civil action concerning any confidential documents,	1016
materials, or information subject to division (D)(1) of this	1017
section.	1018

(5)(a) In order to assist in the performance of the	1019
superintendent's duties, the superintendent may do any of the	1020
following:	1021

(i) Share documents, materials, or other information,	1022
including the confidential and privileged documents, materials, or	1023
information subject to division (D)(1) of this section, with other	1024
state, federal, and international regulatory agencies, with the	1025
NAIC and its affiliates and subsidiaries, and with state, federal,	1026
and international law enforcement authorities, if the recipient	1027
agrees to maintain the confidentiality and privileged status of	1028
the document, material, communication, or other information;	1029

(ii) Receive documents, materials, communications, or	1030
information, including otherwise confidential and privileged	1031
documents, materials, or information, from the NAIC and its	1032
affiliates and subsidiaries, and from regulatory and law	1033
enforcement officials of other foreign or domestic jurisdictions;	1034

(iii) Enter into agreements governing sharing and use of	1035
information consistent with this section.	1036

(b) The superintendent shall maintain as confidential or	1037
privileged any document, material, or information received under	1038
division (D)(5)(a)(ii) of this section with notice or the	1039
understanding that it is confidential or privileged under the laws	1040
of the jurisdiction that is the source of the document, material,	1041
or information.	1042

(6) No waiver of any applicable privilege or claim of	1043
confidentiality in the documents, materials, or information shall	1044
occur as a result of disclosure to the superintendent under this	1045
section or as a result of sharing as authorized in division (D)(5)	1046
of this section.	1047

(7) A privilege established under the law of any state or	1048
jurisdiction that is substantially similar to the privilege	1049
established under division (D) of this section shall be available	1050
and enforced in any proceeding in, and in any court of, this	1051
state.	1052

(8) Nothing contained in this chapter prevents or prohibits	1053
the superintendent from disclosing the content of an examination	1054
report, preliminary examination report or results, or any matter	1055
relating to those reports or results, to the official of any other	1056
state or country that is comparable to the superintendent, or to	1057
law enforcement officials of this or any other state or agency of	1058
the federal government at any time, or to the NAIC, if the agency	1059
or office receiving the report or matters relating to it agrees in	1060
writing to hold it confidential and in a manner consistent with	1061
this chapter.	1062

(E)(1) The superintendent may not appoint an examiner if the	1063
examiner, either directly or indirectly, has a conflict of	1064
interest or is affiliated with the management of, or owns a	1065
pecuniary interest in, any person subject to examination under	1066
this chapter. This division does not automatically preclude any of	1067
the following from being an examiner:	1068

(a) A viator;

1069

(b) An insured in a viaticated insurance policy or	1070
cetificate;	1071

(c) A beneficiary in an insurance policy or certificate that	1072
is proposed to be viaticated.	1073

(2) Notwithstanding the requirements of division (E) of this	1074
section, the superintendent may retain from time to time, on an	1075
individual basis, qualified actuaries, certified public	1076
accountants, or other similar individuals who are independently	1077
practicing their professions, even though these persons may from	1078
time to time be similarly employed or retained by persons subject	1079
to examination under this chapter.	1080

(F)(1) As used in division (F) of this section, "expenses"	1081
include all of the following:	1082

(a) Compensation of examiners for each day or portion of a	1083
day worked;	1084

(b) Travel and living expenses of examiners;

1085

(c) All other incidental expenses incurred by or on behalf of	1086
examiners;	1087

(d) An allocated share of all expenses not described in	1088
division (F)(1), (2), or (3) of this section that are necessarily	1089
incurred in the performance of a market conduct examination,	1090
including the expenses of direct overhead and support staff for	1091
examiners.	1092

(2) When a market conduct examination is made of an insurera	1093
licensed viatical settlement provider or licensed viatical	1094
settlement broker, the insurerlicensed viatical settlement	1095
provider or licensed viatical settlement broker shall pay the	1096
expenses of the examination. The expenses of an examination	1097
include those incurred on or after the date on which the	1098
superintendent notifies the insurerlicensed viatical settlement	1099
provider or licensed viatical settlement broker of the examination	1100
through the issuance of the final examination report.	1101

(3) Upon an insurer'sa licensed viatical settlement provider	1102
or licensed viatical settlement broker's failure to comply with	1103
division (A) of this section, the superintendent may initiate	1104
proceedings in accordance with Chapter 119. of the Revised Code	1105
to revoke, suspend, or refuse to renew the certificate of	1106
authority or license of the insurerviatical settlement provider	1107
or viatical settlement broker. Additionally, the superintendent	1108
may request the attorney general to initiate a civil action in	1109
the court of common pleas of Franklin county to obtain and	1110
enforce a judgment for expenses incurred in the performance of a	1111
market conduct examination.	1112

(G)(1) No cause of action shall arise nor shall any liability	1113
be imposed against the superintendent, any authorized	1114
representative of the superintendent, or any examiner appointed by	1115
the superintendent for any statements made or conduct performed in	1116
good faith while carrying out the provisions of this chapter.	1117

(2) No cause of action shall arise nor shall any liability be	1118
imposed against any person for the act of communicating or	1119
delivering information or data to the superintendent, any	1120
authorized representative of the superintendent, or any examiner	1121
appointed by the superintendent pursuant to an examination made	1122
under this chapter, if the act of communication or delivery was	1123
performed in good faith and without fraudulent intent or the	1124
intent to deceive. Division (G)(2) of this sectionThis division	1125
does not abrogate or modify in any way any common law or statutory	1126
privilege or immunity previously enjoyed by any person identified	1127
in division (G)(1) of this section.	1128

(3) A person identified in division (G)(1) or (2) of this	1129
section shall be entitled to an award of attorney's fees and costs	1130
if the person is the prevailing party in a civil action for libel,	1131
slander, or any other relevant tort arising out of activities in	1132
carrying out the provisions of this chapter and the party bringing	1133
the action was not substantially justified in bringing the action.	1134
For purposes of this division (G)(3) of this section, a proceeding	1135
is "substantially justified" if it had a reasonable basis in law	1136
or fact at the time that it was initiated.	1137

(H) The superintendent may investigate suspected fraudulent	1138
viatical settlement acts and persons engaged in the business of	1139
viatical settlements.	1140

Sec. 3916.12.  Each viatical settlement provider and viatical	1141
settlement broker licensed under this chapter shall file with the	1142
superintendent of insurance, on or before the first day of March	1143
of each year, an annual statement containing the information	1144
required by the superintendent by rule adopted in accordance with	1145
chapterChapter 119. of the Revised Code. The superintendent may	1146
require information concerning transactions involving a viator who	1147
is a resident of this state only. The superintendent shall keep	1148
confidential and not a matter of public record all individual	1149
transaction data regarding the business of viatical settlements	1150
and data that could compromise the privacy of personal,	1151
financial, and health information of the viator or insured.	1152

Sec. 3916.13.  Except as otherwise permitted or required by	1153
law, a licensed viatical settlement provider, licensed viatical	1154
settlement broker, insurance company, insurance agent, insurance	1155
broker, information bureau, rating agency or company, or any other	1156
person with actual knowledge of an insured's identity, shall not	1157
disclose that identity as an insured, including the insured's name	1158
and individual identification data, or the insured's financial or	1159
medical information, unless any of the following apply:	1160

(A) The disclosure is necessary to effect a viatical	1161
settlement between the viator and a licensed viatical settlement	1162
provider, and the viator and insured have provided prior written	1163
consent to the disclosure.	1164

(B) The disclosure is provided in response to an	1165
investigation or examination by the superintendent of insurance or	1166
by any other governmental officer or agency or pursuant to the	1167
requirements of division (C) of section 3916.18 of the Revised	1168
Code.	1169

(C) The disclosure is a term of, or condition to, the	1170
transfer of a viaticated policy by one licensed viatical	1171
settlement provider to another licensed viatical settlement	1172
provider.	1173

(D) The disclosure is necessary to permit a financing entity,	1174
related provider trust, or special purpose entity to finance the	1175
purchase of policies or certificates by a licensed viatical	1176
settlement provider, and the viator and insured have provided	1177
prior written consent to the disclosure.	1178

(E) The disclosure is necessary to allow the licensed	1179
viatical settlement provider or licensed viatical settlement	1180
broker or their authorized representatives to make contacts for	1181
the purpose of determining health status.	1182

(F) The disclosure is required to purchase stop-loss coverage	1183
or financial guaranty insurance.	1184

Sec. 3916.14.  (A)(1) The superintendent of insurance may	1185
conduct an examination under this chapter of a licensee as often	1186
as the superintendent in the superintendent's sole discretion	1187
considers appropriate. The superintendent shall consider all of	1188
the following to determine the nature, scope, and frequency of	1189
examinations:	1190

(a) Consumer complaints;

1191

(b) The results of financial statement analyses and ratios;

1192

(c) Any changes in ownership, officers, or directors;

1193

(d) Actuarial opinions;

1194

(e) Any report of independent certified public accountants;

1195

(f) Any other criteria the superintendent determines to be	1196
appropriate.	1197

(2) For the purposes of completing an examination of a	1198
licensee under this chapter, the superintendent may examine or	1199
investigate any person, or the business of any person, insofar as	1200
the examination or investigation, in the sole discretion of the	1201
superintendent, is necessary or material to the examination of the	1202
licensee.	1203

(3) In lieu of an examination under this chapter of any	1204
foreign or alien licensee licensed under this chapter, the	1205
superintendent, at the superintendent's discretion, may accept an	1206
examination report on the licensee as prepared by the official of	1207
the licensee's state of domicile or port-of-entry state who is	1208
comparable to the superintendent. As far as is practical, the	1209
superintendent shall cooperate with that official for any	1210
examination of a foreign or alien licensee.	1211

(B) The licensee or applicant shall pay to the superintendent	1212
all costs, assessments, forfeitures, or fines incurred in	1213
conducting an examination under this section. The superintendent	1214
shall deposit the money into the state treasury to the credit of	1215
the department of insurance operating fund created by section	1216
3901.021 of the Revised Code.	1217

Sec. 3916.15.  (A) The superintendent of insurance may refuse	1218
to issue or may suspend, revoke, or refuse to renew the license of	1219
a viatical settlement provider or, viatical settlement broker, or	1220
life expectancy provider, if the superintendent finds that any of	1221
the following apply:	1222

(1) There was a material misrepresentation in the application	1223
for the license.	1224

(2) The applicant or licensee or any officer, partner,	1225
member, key management personnel, or designee of the applicant or	1226
licensee has been convicted of fraudulent or dishonest practices,	1227
is subject to a final administrative action in another state, or	1228
is otherwise shown to be untrustworthy or incompetent.	1229

(3) The licensee is a viatical settlement provider that	1230
demonstrates a pattern of unreasonable payments to viators.	1231

(4) The licensee or any officer, partner, member, key	1232
management personnel, or designee of the licensee has been	1233
convicted of or has pleaded guilty or no contest to a felony or to	1234
a misdemeanor involving fraud, moral turpitude, dishonesty, or	1235
breach of trust, regardless of whether a judgment of conviction	1236
has been entered by the court.	1237

(5) The licensee is a viatical settlement provider that has	1238
used a viatical settlement contract form that has not been	1239
approved under this chapter.	1240

(6) The licensee is a viatical settlement provider that has	1241
failed to honor contractual obligations set out in a viatical	1242
settlement contract.	1243

(7) The licensee no longer meets the requirements for initial	1244
licensure.	1245

(8) The licensee is a viatical settlement provider that has	1246
assigned, transferred, or pledged a viaticated policy to a person	1247
that is not aone of the following:	1248

(a) A viatical settlement provider licensed in this state, a;

1249

(b) A viatical settlement purchaser;

1250

(c) An accredited investor as defined in Regulation D, 17	1251
C.F.R. 230.501 adopted under the "Securities Act of 1933," 48	1252
Stat. 77, 15 U.S.C. 77a, et seq., as amended;	1253

(d) A qualified institutional buyer as defined in 17 C.F.R.	1254
230.144A, as amended;	1255

(e) A financing entity, a;

1256

(f) A special purpose entity, or a;

1257

(g) A related provider trust.

1258

(9) The licensee or any officer, partner, member, key	1259
management personnel, or designee of the licensee has violated any	1260
provision of this chapter or any rule adopted under this chapter.	1261

(10) The licensee or any officer, partner, member, key	1262
management personnel, or designee of the licensee has committed	1263
any coercive, fraudulent, or dishonest act, or made any untrue,	1264
deceptive, or misleading statement, in connection with a viatical	1265
transaction or a proposed viatical transaction.	1266

(B) Before the superintendent refuses to issue a license	1267
under this chapter, or suspends,or revokes, or refuses to renew	1268
the license of a viatical settlement provider or, viatical	1269
settlement broker, or life expectancy provider, the superintendent	1270
shall provide the licensee or applicant with notice and an	1271
opportunity for hearing as provided in chapterChapter 119. of the	1272
Revised Code, except as follows:	1273

(1)(a) Any notice of opportunity for hearing, the hearing	1274
officer's findings and recommendations, or the superintendent's	1275
order shall be served by certified mail at the last known address	1276
of the licensee or applicant. Service shall be evidenced by return	1277
receipt signed by any person.	1278

For purposes of this section, the "last known address" is the	1279
address that appears in the licensing records of the department of	1280
insurance.	1281

(b) If the certified mail envelope is returned with an	1282
endorsement showing that service was refused, or that the envelope	1283
was unclaimed, the notice and all subsequent notices required by	1284
Chapter 119. of the Revised Code may be served by ordinary mail to	1285
the last known address of the licensee or applicant. The mailing	1286
shall be evidenced by a certificate of mailing. Service is deemed	1287
complete as of the date of such certificate provided that the	1288
ordinary mail envelope is not returned by the postal authorities	1289
with an endorsement showing failure of delivery. The time period	1290
in which to request a hearing, as provided in Chapter 119. of the	1291
Revised Code, begins to run on the date of mailing.	1292

(c) If service by ordinary mail fails, the superintendent may	1293
cause a summary of the substantive provisions of the notice to be	1294
published once a week for three consecutive weeks in a newspaper	1295
of general circulation in the county where the last known place of	1296
residence or business of the licensee or applicant is located. The	1297
notice is considered served on the date of the third publication.	1298

(d) Any notice required to be served under Chapter 119. of	1299
the Revised Code shall also be served upon the attorney of the	1300
licensee or applicant by ordinary mail if the attorney has entered	1301
an appearance in the matter.	1302

(e) The superintendent may, at any time, perfect service on a	1303
licensee or applicant by personal delivery of the notice by an	1304
employee of the department.	1305

(f) Notices regarding the scheduling of hearings and all	1306
other matters not described in division (B)(1)(a) of this section	1307
shall be sent by ordinary mail to the licensee or applicant and to	1308
the attorney of the licensee or applicant.	1309

(2) Any subpoena for the appearance of a witness or the	1310
production of documents or other evidence at a hearing, or for the	1311
purpose of taking testimony for use at a hearing, shall be served	1312
by certified mail, return receipt requested, by an attorney or by	1313
an employee of the department designated by the superintendent.	1314
Such subpoenas shall be enforced in the manner provided in section	1315
119.09 of the Revised Code. Nothing in this section shall be	1316
construed as limiting the superintendent's other statutory powers	1317
to issue subpoenas.	1318

Sec. 3916.16.  (A) It is a violation of this chapter for any	1319
person to enter into a viatical settlement contract prior to the	1320
application for or issuance of a policy that is the subject of	1321
the viatical settlement contract or within a two-yearfive-year	1322
period commencing with the date of issuance of the insurance	1323
policy or certificate unless the viator certifies to the licensed	1324
viatical settlement provider that one or more of the following	1325
conditions have been met within that two-year periodfive years	1326
after the issuance of the policy:	1327

(1) The policy or certificate was issued upon the viator's	1328
exercise of conversion rights arising out of a group policy or	1329
certificate, provided the total of the time covered under the	1330
conversion policy or certificate plus the time covered under the	1331
groupprior policy or certificate is at least twenty-foursixty	1332
months. The time covered under thea group policy or certificate	1333
shall be calculated without regard to any change in insurance	1334
carriers, provided the coverage has been continuous and under the	1335
same group sponsorship.	1336

(2) The viator is a charitable organization exempt from	1337
taxation under 26 U.S.C. section 501(c)(3).	1338

(3) The viator is not an individual.

1339

(4) The viator certifies and submits independent evidence to	1340
the licensed viatical settlement provider that one or more of the	1341
following conditions have been met within that two-yearfive-year	1342
period:	1343

(a) The viator or insured is terminally or chronically ill.

1344

(b) The viator's spouse dies.

1345

(c) The viator divorces the viator's spouse.

1346

(d) The viator retires from fulll-timefull-time employment.

1347

(e) The viator becomes physically or mentally disabled, and a	1348
physician determines that the disability prevents the viator from	1349
maintaining full-time employment.	1350

(f) The viator was the insured's employer at the time the	1351
policy or certificate was issued and the employment relationship	1352
terminated.	1353

(g) A court of competent jurisdiction enters a final order,	1354
judgementjudgment, or decree on the application of a creditor of	1355
the viator and adjudicates the viator bankrupt or insolvent or	1356
approves a petition seeking reorganization of the viator or	1357
appointing a receiver, trustee, or liquidator to all or a	1358
substantial part of the viator's assets.	1359

(h) The viator experiences a significant decrease in income	1360
that is unexpected and that impairs the viator's reasonable	1361
ability to pay the policy premium.	1362

(i) The viator or insured disposes of the viator's or	1363
insured's ownership interests in a closely held corporation.	1364

(3) The viator enters into a viatical settlement contract two	1365
years after the date of issuance of a policy, and all of the	1366
following are true with respect to that policy:	1367

(a) The viator has funded policy premiums using one or more	1368
of the following methods:	1369

(i) Unencumbered assets provided by the insured which may	1370
include an interest in the life insurance policy being viaticated	1371
up to the amount of the policy's net cash surrender value;	1372

(ii) Full recourse liability financing incurred by the	1373
insured;	1374

(iii) An agreement described in division (Q)(3)(e) of section	1375
3916.01 of the Revised Code.	1376

(b) The viator does not have an agreement or understanding	1377
with any other person to guarantee any such liability, to	1378
purchase, or to stand ready to purchase the policy, including	1379
through an assumption or forgiveness of the loan;	1380

(c) Neither the insured nor the policy has been evaluated for	1381
settlement.	1382

(B) Copies of the independent evidence described in division	1383
(A)(4)(2) of this section and documents required by section	1384
3916.07 of the Revised Code shall be submitted to the insurer when	1385
the licensed viatical settlement provider or any other party	1386
entering into a viatical settlement contract with a viator submits	1387
a request to the insurer for verification of coverage. The copies	1388
shall be accompanied by a letter of attestation from the licensed	1389
viatical settlement provider that the copies are true and correct	1390
copies of the documents received by the licensed viatical	1391
settlement provider.	1392

(C) If the licensed viatical settlement provider submits to	1393
the insurer a copy of the owner or insured's certification and	1394
independent evidence described in division (A)(4)(2) of this	1395
section when the licensed viatical settlement provider submits a	1396
request to the insurer to effect the transfer of the policy or	1397
certificate to the licensed viatical settlement provider, the	1398
copy conclusively establishes that the viatical settlement	1399
contract satisfies the requirements of this section, and the	1400
insurer shall timely respond to the request.	1401

(D) No insurer, as a condition of responding to a request for	1402
verification of coverage or effecting the transfer of a policy	1403
pursuant to a viatical settlement contract, may require the	1404
viator, insured, licensed viatical settlement provider, or	1405
licensed viatical settlement broker to sign any form, disclosure,	1406
consent, or waiver form that has not been approved by the	1407
superintendent of insurance for use in connection with viatical	1408
settlement contracts.	1409

(E) Upon receipt of a properly completed request for change	1410
of ownership or beneficiary of a policy, the insurer shall respond	1411
in writing within thirty calendar days to confirm that the insurer	1412
has made the change or specify reasons that the change cannot be	1413
processed. No insurer shall unreasonably delay effecting change in	1414
ownership or beneficiary or seek to interfere with any viatical	1415
settlement contract lawfully entered into in this state.	1416

(F) A licensed viatical settlement provider or licensed	1417
viatical settlement broker that is party to a plan, transaction,	1418
or series of transactions to originate, renew, continue, or	1419
finance a life insurance policy with the insurer for the purpose	1420
of engaging in the business of viatical settlements at any time	1421
prior to or during the first five years after the insurer issues	1422
the policy shall fully disclose the plan, transaction, or series	1423
of transactions to the insurer that issued that policy.	1424

Sec. 3916.161.  (A) No licensed viatical settlement broker	1425
knowingly shall solicit an offer from, effectuate a viatical	1426
settlement with, or make a sale to any licensed viatical	1427
settlement provider, viatical settlement purchaser, financing	1428
entity, or related provider trust that is controlling, controlled	1429
by, or under common control with the licensed viatical settlement	1430
broker.	1431

(B) No licensed viatical settlement provider knowingly shall	1432
enter into a viatical settlement contract with a viator, if, in	1433
connection with that contract, anything of value will be paid to	1434
a licensed viatical settlement broker that is controlling,	1435
controlled by, or under common control with that licensed	1436
viatical settlement provider or the viatical settlement purchaser,	1437
financing entity or related provider trust that is involved in the	1438
contract.	1439

(C) A violation of this section is a fraudulent viatical	1440
settlement act pursuant to section 3916.18 of the Revised Code.	1441

Sec. 3916.17.  (A) The general assembly hereby declares that	1442
the purpose of this section is to provide prospective viators with	1443
clear and unambiguous statements in the advertisement of viatical	1444
settlements and to assure the clear, truthful, and adequate	1445
disclosure of the benefits, risks, limitations, and exclusions of	1446
any viatical settlement contract. This purpose is intended to be	1447
accomplished by the establishment of guidelines and standards of	1448
permissible and impermissible conduct in the advertising of	1449
viatical settlements to assure that product descriptions are	1450
presented in a manner that prevents unfair, deceptive, or	1451
misleading advertising and is conducive to accurate presentation	1452
and description of viatical settlements through the advertising	1453
media and material used by viatical settlement licensees.	1454

Divisions (B) to (P)(Q) of this section apply to any	1455
advertising of viatical settlement contracts, or any related	1456
products or services intended for dissemination in this state,	1457
including, but not limited to, internet advertising viewed by	1458
persons located in this state. In cases in which disclosure	1459
requirements are established pursuant to federal regulation, this	1460
section shall be interpreted so as to minimize or eliminate	1461
conflict with federal regulation wherever possible.	1462

(B)(1) Every licensed viatical settlement provider and	1463
licensed viatical settlement broker shall file with the	1464
superintendent of insurance all advertisements of its contract,	1465
products, and services.	1466

(2) No licensed viatical settlement provider shall enter into	1467
a viatical settlement contract unless the materials promoting,	1468
advertising, and marketing the viatical settlement contract have	1469
been filed with the superintendent.	1470

(C) Every licensed viatical settlement licenseeprovider and	1471
licensed viatical settlement broker shall establish and at all	1472
times shall maintain a system of control over the content, form,	1473
and method of dissemination of all advertisements of its	1474
contracts, products, and services. All advertisements, regardless	1475
of by whom they are written, created, designed, or presented,	1476
shall be the responsibility of the licensed viatical settlement	1477
licenseeprovider or licensed viatical settlement broker and of	1478
the individual who created or presented the advertisement. A	1479
system of control shall include regular routine notification, at	1480
least once a year, to agents and others authorized by the	1481
licensed viatical settlement licenseeprovider or licensed	1482
viatical settlement broker who disseminate advertisements of the	1483
requirements and procedures for approval prior to the use of any	1484
advertisements not furnished by the licensed viatical settlement	1485
licenseeprovider or licensed viatical settlement broker.	1486

(C)(D) All advertisements that are subject to this section	1487
shall be truthful and not misleading in fact or by implication.	1488
The form and content of an advertisement of a viatical settlement	1489
contract shall be sufficiently complete and clear so as to avoid	1490
deception and shall not have the capacity or tendency to mislead	1491
or deceive. The determination of whether an advertisement has the	1492
capacity or tendency to mislead or deceive shall be made by the	1493
superintendent of insurance, from the overall impression that the	1494
advertisement may be reasonably expected to create upon a person	1495
of average education or intelligence within the segment of the	1496
public to which it is directed.	1497

(D)(E) Viatical settlement advertisements containing any	1498
representation set forth in this division are deemed false and	1499
misleading on their face and are prohibited. False and misleading	1500
viatical settlement advertisements include, but are not limited	1501
to, those including any of the following representations:	1502

(1) "Guaranteed," "fully secured," "100 percent secured,"	1503
"fully insured," "secure," "safe," "backed by rated insurance	1504
companies," "backed by federal law," "backed by state law," or	1505
"state guaranty funds," or similar representations;	1506

(2) "No risk," "minimal risk," "low risk," "no speculation,"	1507
"no fluctuation," or similar representations;	1508

(3) "Qualified or approved for individual retirement accounts	1509
(IRAs), Roth IRAs, 401(k) plans, simplified employee pensions	1510
(SEPs), 403(b), Keogh plans, TSA, or other retirement account	1511
rollovers," "tax deferred," or similar representations;	1512

(4) Utilization of the word "guaranteed" to describe the	1513
fixed return, annual return, principal, earnings, profits,	1514
investment, or similar representations;	1515

(5) "No sales charges or fees" or similar representations;

1516

(6) "High yield," "superior return," "excellent return,"	1517
"high return," "quick profit," or similar representations;	1518

(7) Purported favorable representations or testimonials about	1519
the benefits of viatical settlement contracts or viatical	1520
settlement purchase agreements as an investment, taken out of	1521
context from any newspaper, trade paper, journal, radio or	1522
television program, or any other form of print and electronic	1523
media.	1524

(E)(F)(1) The information required to be disclosed under this	1525
section shall not be minimized, rendered obscure, or presented in	1526
an ambiguous fashion or intermingled with the text of the	1527
advertisement so as to be confusing or misleading.	1528

An advertisement shall not omit material information or use	1529
any words, phrases, statements, references, or illustrations if	1530
the omission or use has the capacity, tendency, or effect of	1531
misleading or deceiving viators, as to the nature or extent of any	1532
benefit, loss covered, premium payable, or state or federal tax	1533
consequence. The fact that the viatical settlement contract	1534
offered is made available for inspection prior to consummation of	1535
the sale, that an offer is made to refund the payment if the	1536
viator is not satisfied, or that the viatical settlement contract	1537
includes a "free look" period that satisfies or exceeds legal	1538
requirements, does not remedy any misleading statements.	1539

(2) An advertisement shall not use the name or title of a	1540
life insurance company or a life insurance policy unless the	1541
advertisement has been approved by the insurerthat company.	1542

(3) An advertisement shall not represent that any premium	1543
payments will not be required to be paid on the life insurance	1544
policy that is the subject of a viatical settlement contract or	1545
viatical settlement purchase agreement in order to maintain that	1546
policy, unless that is the fact.	1547

(4) An advertisement shall not state or imply that interest	1548
charged on an accelerated death benefit or a policy loan is	1549
unfair, inequitable, or in any manner an incorrect or improper	1550
practice.	1551

(5) The words "free," "no cost," "without cost," "no	1552
additional cost," "at no extra cost," or words of similar import	1553
shall not be used with respect to any life insurance policy or to	1554
any benefit or service unless true. An advertisement may specify	1555
the charge for a benefit or a service or may state that a charge	1556
is included in the payment or use other appropriate language.	1557

(6)(a) TerstimonialsTestimonials, appraisals, analyses, or	1558
endorsements used in advertisements must satisfy all of the	1559
following:	1560

(i) They must be genuine.

1561

(ii) They must represent the current opinion of the author.

1562

(iii) They must be applicable to the viatical settlement	1563
contrctcontract product or service advertised, if any.	1564

(iv) They must be accurately reproduced with sufficient	1565
completeness to avoid misleading or deceiving prospective viators	1566
as to the nature or scope of the testimonials, appraisals,	1567
analyses, or endorsements.	1568

(b) In using testimonials, appraisals, analyses, or	1569
endorsements, the licensed viatical settlement licenseeprovider	1570
or licensed viatical settlement broker makes as its own all the	1571
statements contained in the testimonials, appraisals, analyses,	1572
or endorsements, and the statements are subject to all the	1573
provisions of this section.	1574

(c) If the individual making a testimonial, appaisal	1575
appraisal, analysis, or endorsement has a funancialfinancial	1576
interest in the viatical settlement provider or related entity	1577
subject of that testimonial, appraisal, analysis, or endorsement	1578
directly or indirectly as a stockholder, director, officer,	1579
employee, or otherwise, or receives any benefit directly or	1580
indirectly other than required union scale wages, that fact shall	1581
be prominently disclosed in the advertisement.	1582

(d) An advertisement shall not state or im-plyimply that a	1583
viatical settlement contract benefit or service has been approved	1584
or endorsed by a group of individuals, society, association, or	1585
other organization unless that is the fact and unless any	1586
relationship between the individualgroup of individuals, society,	1587
association, or organization and the licensed viatical settlement	1588
provider is disclosed. If the entity making the endorsement or	1589
testimonial is owned, controlled, or managed by the licensed	1590
viatical settlement provider, or receives any payment or other	1591
consideration from the licensed viatical settlement provider for	1592
making an endorsement or testimonial, that fact shall be disclosed	1593
in the advertisement.	1594

(e) When an endorsement refers to benefits received under a	1595
viatical settlement contract, all pertinent information shall be	1596
retained for a period of at least five years after its use.	1597

(F)(G) An advertisement shall not contain statistical	1598
information unless the information accurately reflects recent and	1599
relevant facts. The source of all statistics used in an	1600
advertisement shall be identified.	1601

(G)(H) An advertisement shall not disparage any insurer,	1602
viatical settlement provider, viatical settlement broker, viatical	1603
settlement investment agent, insurance producer, policy, service,	1604
or method of marketing.	1605

(H)(I) All advertisements about a licensed viatical	1606
settlement provider or its viatical settlement contract,	1607
products, or services shall clearly identify the licensed	1608
viatical settlement provider's name. If any specific viatical	1609
settlement contract is advertised, the viatical settlement	1610
contract shall be identified either by form number or some other	1611
appropriate description. If an application is part of the	1612
advertisement, the name of the licensed viatical settlement	1613
provider shall be shown on the application.	1614

(I)(J) An advertisement shall not use a trade name, group	1615
designation, name of the parent company of a licensed viatical	1616
settlement licenseeprovider or licensed viatical settlement	1617
broker, name of a particular division of the licensed viatical	1618
settlement licenseeprovider or licensed viatical settlement	1619
broker, service mark, slogan, symbol, or other device or	1620
reference without disclosing the name of the licensed viatical	1621
settlement licenseeprovider or licensed viatical settlement	1622
broker, if either of the following applies regarding the	1623
advertisement:	1624

(1) It would have the capacity or tendency to mislead or	1625
deceive as to the true identity of the licensed viatical	1626
settlement licenseeprovider or licensed viatical settlement	1627
broker.	1628

(2) It would have the capacity or tendency to create the	1629
impression that a company other than the licensed viatical	1630
settlement licenseeprovider or licensed viatical settlement	1631
broker would have any responsibility for the financial obligation	1632
under a viatical settlement contract.	1633

(J)(K) An advertisement shall not use any combination of	1634
words, symbols, or physical materials that, by their content,	1635
phraseology, shape, color, or other characteristics, are so	1636
similar to a combination of words, symbols, or physical materials	1637
used by a government program or agency or otherwise appear to be	1638
of such a nature that they tend to mislead prospective viators	1639
into believing that the solicitation is in some manner connected	1640
with a government program or agency.	1641

(K)(L) An advertisement may state that a licensed viatical	1642
settlement provider is licensed in the state in which the	1643
advertisement appears, provided it does not exaggerate that fact	1644
or suggest or imply that competing viatical settlement providers	1645
may not be so licensed. The advertisement may ask the audience to	1646
consult the licensee'slicensed provider's web site or contact the	1647
department of insurance to find out if the state in which the	1648
advertisement appears requires licensing and, if it does, whether	1649
the viatical settlement provider or viatical settlement broker is	1650
licensed.	1651

(L)(M) An advertisement shall not create the impression that	1652
the licensed viatical settlement provider, its financial condition	1653
or status, the payment of its claims, or the merits, desirability,	1654
or advisability of its viatical settlement contracts are	1655
recommended or endorsed by any government entity.	1656

(M)(N) All advertisements of an actual licenseelicensed	1657
viatical settlement provider or licensed viatical settlement	1658
broker shall state the name of the actual licenseelicensed	1659
viatical settlement provider or licensed viatical settlement	1660
broker. An advertisement shall not use a trade name, any group	1661
designation, name of any affiliate or controlling entity of the	1662
licenseelicensed viatical settlement provider or licensed	1663
viatical settlement broker, service mark, slogan, symbol, or other	1664
device in a manner that would have the capacity or tendency to	1665
mislead or deceive as to the true identity of the actual licensee	1666
licensed viatical settlement provider or licensed viatical	1667
settlement broker or create the false impression that an	1668
affiliate or controlling entity would have any responsibility for	1669
the financial obligation of the licenseelicensed viatical	1670
settlement provider or licensed viatical settlement broker.	1671

(N)(O) An advertisement shall not directly or indirectly	1672
create the impression that any division or agency of this state,	1673
any other state, or the United States government endorses,	1674
approves, or favors any of the following:	1675

(1) Any licensed viatical settlement licenseeprovider or	1676
licensed viatical settlement broker or its business practices or	1677
methods of operation;	1678

(2) The merits, desirability, or advisability of any viatical	1679
settlement contract, or viatical settlement program;	1680

(3) Any viatical settlement contract, or viatical settlement	1681
program;	1682

(4) Any life insurance policy or certificate or life	1683
insurance company.	1684

(O)(P) If the advertiser emphasizes the speed with which the	1685
viatication will occur, the advertising must disclose the average	1686
time frame, from completed application to the date of offer and	1687
from acceptance of the offer to receipt of the funds by the	1688
viator.	1689

(P)(Q) If the advertising emphasizes the dollar amounts	1690
available to viators, the advertising shall disclose the average	1691
purchase price as a per cent of face value obtained by viators	1692
contracting with the licensee during the past six months.	1693

Sec. 3916.18.  (A)(1) No person shall commit a fraudulent	1694
viatical settlement act.	1695

(2) No person shall knowingly or intentionally interfere with	1696
the enforcement of the provisions of this chapter or	1697
investigations of suspected or actual violations of this chapter.	1698

(3) No person in the business of viatical settlements shall	1699
knowingly or intentionally permit any person convicted of a felony	1700
involving dishonesty or breach of trust to participate in the	1701
business of viatical settlements.	1702

(B)(1) Each viatical settlement contract and each application	1703
for a viatical settlement, regardless of the form of transmission,	1704
shall contain the following statement or a substantially similar	1705
statement:	1706

"Any person who knowingly presents false information in an	1707
application for insurance or viatical settlement contract is	1708
guilty of a crime and may be subject to fines and imprisonment."	1709

(2) The lack of a statement as required in division (B)(1) of	1710
this section does not constitute a defense in any prosecution for	1711
a fraudulent viatical settlement act.	1712

(C)(1) Every person engaged in the business of viatical	1713
settlements having knowledge or a reasonable belief that a	1714
fraudulent viatical settlement act is being, will be, or has been	1715
committed shall provide to the superintendent of insurance the	1716
information required by the superintendent. The person shall	1717
provide the information in a manner prescribed by the	1718
superintendent.	1719

(2) Every person having knowledge or a reasonable belief	1720
suspicion that a fraudulent viatical settlement act is being, will	1721
be, or has been committed may provide to the superintendent the	1722
information required by the superintendent. The person shall	1723
provide the information under this division in a manner prescribed	1724
by the superintendent.	1725

(D)(1) No civil liability shall be imposed on, and no cause	1726
of action shall arise from, a person's furnishing information	1727
concerning suspected, anticipated, or completed fraudulent	1728
viatical settlement acts or suspected or completed fraudulent	1729
insurance acts, if the information is provided to or received from	1730
any of the following:	1731

(a) The superintendent, or the superintendent's employees,	1732
agents, or representatives;	1733

(b) Law enforcement or regulatory officials of this state,	1734
another state, the united statesUnited States, or a political	1735
subdivision of this state or another state, or any employee,	1736
agent, or representative of any of those officials:;	1737

(c) A person involved in the prevention and detection of	1738
fraudulent viatical settlement acts or any agent, employee, or	1739
representative of any person so involved;	1740

(d) The NAIC, national association of securities dealers	1741
(NASD)financial industry regulatory authority (FINRA), the north	1742
americanAmerican securities amdiministratorsadministrators	1743
association (NASAA), any employee, agent, or representative of	1744
any of those associations., or other regulatory body overseeing	1745
life insurance, viatical settlements, securities, or investment	1746
fraud;	1747

(e) The life insurer that issued the life insurance policy or	1748
certificate covering the life of the insured.	1749

(2) The immunity provided in division (D)(1) of this section	1750
shall not apply to any statement made with actual malice. In an	1751
action brought against a person for filing a report or furnishing	1752
other information concerning a fraudulent viatical settlement act	1753
or a fraudulent insurance act, the party bringing the action shall	1754
plead specifically any allegation that the immunity provided in	1755
division (D)(1) of this section does not apply because the person	1756
filing the report or furnishing the information did so with actual	1757
malice.	1758

(3) If a person is the prevailing party in a civil action for	1759
libel, slander, or any other relevant tort arising out of	1760
activities in carrying out the provisions of this chapter, if the	1761
prevailing party is a person identified in division (D)(1) of this	1762
section and the immunity described in that division applies to the	1763
person, and if the party who brought the action was not	1764
substantially justified in doing so, the person who is the	1765
prevailing party is entitled to an award of attorney's fees and	1766
costs arising out of the action. However, the person is not	1767
entitled to an award of attorney's fees if the person provided	1768
information about the person's own fraudulent viatical settlement	1769
acts. For purposes of this division, an action is "substantially	1770
justified" if it had a reasonable basis in law or fact at the time	1771
that it was initiated.	1772

(4) This section does not abrogate or modify any common law	1773
or statutory privilege or immunity enjoyed by a person described	1774
in division (D)(1) of this section.	1775

(E)(1) The documents and evidence provided pursuant to	1776
division (D) of this section or obtained by the superintendent in	1777
an investigation of any suspected or actual fraudulent viatical	1778
settlement act is privileged and confidential, is not a public	1779
record open for inspection under section 149.43 of the Revised	1780
Code, and is not subject to discovery or subpoena in a civil or	1781
criminal action.	1782

(2) Division (E)(1) of this section does not prohibit release	1783
by the superintendent of any document or evidence obtained in an	1784
investigation of suspected or actual fraudulent viatical	1785
settlement acts, in any of the following manners or circumstances:	1786

(a) In any administrative or judicial proceeding to enforce	1787
any laws administeradministered by the superintendent;	1788

(b) To any law enforcement or regulatory agency of this	1789
state, another state, the united statesUnited States, or a	1790
politcalpolitical subdivision of this state or another state, to	1791
an organization established for the purpose of detecting and	1792
preventing fraudulent viatical settlement actacts, or to the NACI	1793
NAIC;	1794

(c) At the discretion of the superintendent, to a person in	1795
the business of viatical settlements that is aggrieved by a	1796
fraudulent viatical settlement act.	1797

(3) Release of documents and evidence under division (E)(2)	1798
of this section does not abrogate or modify the privilege granted	1799
in division (E)(1) of this section.	1800

(F) The provisions of this chapter do not do any of the	1801
following:	1802

(1) Preempt the authority or relieve the duty of any other	1803
law enforcement or regulatory agencies to investigate, examine, or	1804
prosecute suspected violations of law;	1805

(2) Prevent or prohibit a person from disclosing voluntarily	1806
any information concerning viatical settlement fraud to a law	1807
enforcement or regulatory agency other than the department of	1808
insurance;	1809

(3) Limit any power granted elsewhere by the law of this	1810
state to the superintendent or an insurance fraud unit to	1811
investigate and examine possible violations of law and to take	1812
appropriate action against wrongdoers.	1813

(G)(1) ViaticalLicensed viatical settlement providers and	1814
licensed viatical settlement brokers shall adopt and have in place	1815
antifraud initiatives reasonably calculated to detect, prosecute,	1816
and prevent fraudulent viatical settlement acts. At the discretion	1817
of the superintendent, the superintendent may order, or a licensee	1818
licensed viatical settlement provider or licensed viatical	1819
settlement broker may request and the superintendent may grant,	1820
any modifications of the following required initiatives described	1821
in divisions (G)(1)(a) and (b) of this section that are necessary	1822
to ensure an effective antifraud program. The modifications may	1823
be more or less restrictive than the required initiatives so long	1824
as the modifications may reasonably be expected to accomplish the	1825
purpose of this section. Antifraud initiatives under this	1826
division shall include all of the following:	1827

(a) Fraud investigators, who may be licensed viatical	1828
settlement provider or licensed viatical settlement broker	1829
employees or independent contractors;	1830

(b) An antifraud plan that includes, but not is not limited	1831
to, all of the following:	1832

(i) A description of the procedures for detecting and	1833
investigating possible fraudulent viatical settlement acts and	1834
procedures for resolving material inconsistencies between medical	1835
records and insurance applications;	1836

(ii) A description of the procedures for reporting possible	1837
fraudulent viatical settlement acts to the superintendent;	1838

(iii) A description of the plan for atifraudantifraud	1839
education and training of underwriters and other personnel;	1840

(iv) A description or charpchart outlining the	1841
organizational arrangement of the antifraud personnel who are	1842
responsible for the investigation and reporting of possible	1843
fraudulent viatical settlement acts and investigating unresolved	1844
material inconsistencies between medical records and insurance	1845
applications.	1846

(2) The superintendent, by rule adopted in accordance with	1847
Chapter 119. of the Revised Code, may require that antifraud plans	1848
required under division (G)(1) of this section be submitted to the	1849
superintendent. If the superintendent requires that antifraud	1850
plans be submitted to the superintendent, the plans so submitted	1851
are privileged and confidential, are not a public record open for	1852
inspection under section 149.43 of the revised codeRevised Code,	1853
and are not subject to discovery or subpoena in a civil or	1854
criminal action.	1855

(H) No insurer that issued a policy being viaticated shall be	1856
responsible, under this chapter, for any act or omission of a	1857
licensed viatical settlement broker or licensed viatical	1858
settlement provider arising out of or in connection with the	1859
viatical settlement transaction unless the insurer receives	1860
compensation for the placement of a viatical settlement contract	1861
from the licensed viatical settlement provider or licensed	1862
viatical settlement broker in connection with the viatical	1863
settlement contract.	1864

Sec. 3916.19.  (A) In addition to the penalties and other	1865
enforcement provisions contained in this chapter, if any person	1866
violates any provision of this chapter or any rule or regulation	1867
implementing any provision of this chapter that constitutes a	1868
fraudulent viatical settlement act, the superintendent of	1869
insurance may seek an injunction in a court of competent	1870
jurisdiction and may apply for any temporary or permanent order	1871
that the superintendent determines is necessary to restrain the	1872
person from committing the violation.	1873

(B) Any person damaged by any act of a person in violation of	1874
any provision of this chapter may bring a civil action against the	1875
person committing the violation in a court of competent	1876
jurisdiction. A civil action brought under this division does not	1877
preclude the superintendent from exercising any regulatory,	1878
enforcement, or other authority available to the superintendent	1879
under this chapter.	1880

(C) In addition to the penalties and other enforcement	1881
provisions contained in this chapter, any person who violates any	1882
provision of this chapter that constitutes a fraudulent viatical	1883
settlement act is subject to a civil penalty of up to ten thousand	1884
dollars per violation. Imposition of civil penalties described in	1885
this division shall be pursuant to an order of the superintendent	1886
issued under Chapter 119. of the Revised Code. The	1887
superintendent's order may require a person found to be in	1888
violation of this chapter to make restitution to persons aggrieved	1889
by violations of this chapter.	1890

Sec. 3916.20.  The superintendent of insurance may adopt	1891
rules in accordance with Chapter 119. of the Revised Code for	1892
purposes of implementing this chapter, including, but not limited	1893
to, rules that do the following:	1894

(A) Govern the relationship and responsibilities of both	1895
insurers and, licensed viatical settlement providers, and licensed	1896
viatical settlement brokers during the viatication of a life	1897
insurance policy or certificate.	1898

(B) Establish standards for evaluating the reasonableness of	1899
payments under viatical settlement contracts for persons with a	1900
terminal or chronic illness or condition. This authority includes,	1901
but is not limited to, the regulation of discount rates used to	1902
determine the amount paid in exchange for the assignment,	1903
transfer, sale, devise, or bequest of a benefit under a life	1904
insurance policy or certificateinsuring persons with a terminal	1905
or chronic illness or condition.	1906

(C) Establish appropriate licensing requirements, fees, and	1907
standards for continued licensure for viatical settlement	1908
providers and, viatical settlement brokers, and life expectancy	1909
providers;	1910

(D) Require a bond or other mechanism for ensuring the	1911
financial accountability of licensed viatical settlement providers	1912
and licensed viatical settlement brokers.	1913

Section 2.  That existing sections 3916.01, 3916.02, 3916.03,	1914
3916.04, 3916.05, 3916.06, 3916.07, 3916.08, 3916.09, 3916.10,	1915
3916.11, 3916.12, 3916.13, 3916.14, 3916.15, 3916.16, 3916.17,	1916
3916.18, 3916.19, and 3916.20 of the Revised Code are hereby	1917
repealed.	1918

Section 3. Division (A) of section 3916.02 as amended by this	1919
act shall take effect 90 days after the effective date of this	1920
act.	1921