Section 1. That sections 3916.01, 3916.02, 3916.03,
3916.05, | 6 |
3916.06, 3916.07, 3916.08, 3916.09, 3916.10, 3916.11,
3916.12, | 7 |
3916.13, 3916.14, 3916.15, 3916.16, 3916.17, 3916.18,
3916.19, | 8 |
3916.20, and 3916.99 be amended and sections 3916.031
and | 9 |
3916.171
of the Revised Code be enacted to read as follows: | 10 |
(A)
"Advertising" means any
written, electronic, or printed | 12 |
communication or any communication by means of
recorded telephone | 13 |
messages or
transmitted on radio, television, the internet, or | 14 |
similar
communications media, including, but not limited to, film | 15 |
strips,
motion pictures, and videos, that is directly or | 16 |
indirectly
published, disseminated, circulated, or placed directly | 17 |
or indirectly
before
the public
for the purpose of creating an | 18 |
interest in or
inducing
a person to purchase or
sell, assign, | 19 |
devise, bequest, or transfer
the death benefit or ownership of a | 20 |
life insurance policy pursuant
to a viatical
settlement
contract. | 21 |
(B)
"Business of viatical settlements" means an activity | 22 |
involved, but not limited to,
in the offering, solicitation, | 23 |
negotiation, procurement,
effectuation, purchasing, investing, | 24 |
financing, monitoring,
tracking,
underwriting, selling, | 25 |
transferring, assigning,
pledging, or
hypothecating or in any | 26 |
other manner acquiring an
interest in a life insurance policy by | 27 |
means of viatical
settlement contracts or
purchase
agreements or | 28 |
any similar
activity related to viatical
settlement
contracts or | 29 |
purchase
agreements. | 30 |
(1) Being unable to perform, without
substantial assistance | 34 |
from another individual, at least two
activities of daily
living, | 35 |
including, but not limited to, eating,
toileting,
transferring, | 36 |
bathing, dressing, or continence for at least ninety days due to a | 37 |
loss of functional capacity; or | 38 |
(D) "Escrow agent" means an independent third-party person | 47 |
who, pursuant to a written agreement signed by the viatical | 48 |
settlement provider and viator, provides escrow services related | 49 |
to the acquisition of a life insurance policy pursuant to a | 50 |
viatical settlement contract. "Escrow agent" does not include any | 51 |
person associated, affiliated with, or under the control of a | 52 |
person licensed under this chapter or person described in division | 53 |
(C) of section 3916.02 of the Revised Code. | 54 |
(E)(1)
"Financing entity" means an underwriter, placement | 55 |
agent,
lender, purchaser of securities, purchaser of a policy or | 56 |
certificate from a
viatical settlement provider, credit enhancer, | 57 |
or any other person that
has a direct ownership interest in a | 58 |
policy or certificate
that is the subject of a viatical settlement | 59 |
contract and to which both of the
following apply: | 60 |
(1) Presenting, causing to be presented, or preparing with | 74 |
knowledge or belief that it will be presented to or by a viatical | 75 |
settlement provider, viatical settlement broker, viatical | 76 |
settlement
purchaser, financing entity,
insurer, insurance | 77 |
broker,
insurance
agent, or any other person,
any false material | 78 |
information, or
concealing any material
information, as part of, | 79 |
in support of, or
concerning a fact
material to, one or more of | 80 |
the following: | 81 |
(3) Presenting, causing to be presented, or preparing with | 115 |
knowledge or reason to believe that it will be presented, to or by | 116 |
a
viatical settlement provider, viatical settlement broker, | 117 |
insurer,
insurance agent, financing entity, viatical settlement | 118 |
purchaser,
or any other person, in connection with a viatical | 119 |
settlement
transaction or insurance transaction, an insurance | 120 |
policy or
certificate that the actor knows was fraudulently | 121 |
obtained by the
insured, the owner, or any agent of the insured or | 122 |
owner; | 123 |
(4) Committing any embezzlement, theft, misappropriation, or | 124 |
conversion of moneys, funds, premiums, credits or other property | 125 |
of a
viatical settlement provider, insurer, insured, viator, | 126 |
insurance
policyowner, or any other person engaged in the business | 127 |
of
viatical settlements or insurance; | 128 |
(J) Notwithstanding section 1.59 of the Revised Code, | 149 |
"person"
means a natural person or a legal entity, including, but | 150 |
not limited to,
an individual, partnership, limited liability | 151 |
company, limited liability partnership, association,
trust, | 152 |
business trust, or corporation. | 153 |
(H)(L)
"Related provider trust" means a titling trust or any | 159 |
other
trust established by a licensed viatical settlement provider | 160 |
or a financing entity for the sole purpose of holding ownership or | 161 |
beneficial interest in purchased policies in connection with a | 162 |
financing transaction, provided that the trust has a written | 163 |
agreement with the licensed viatical settlement provider under | 164 |
which the licensed viatical settlement provider is responsible for | 165 |
ensuring compliance with all statutory and regulatory requirements | 166 |
and under which the trust agrees to make all records and files | 167 |
related to viatical settlement transactions available to the | 168 |
superintendent as if those records and files were maintained | 169 |
directly by the licensed viatical settlement provider. | 170 |
(I)(M)
"Special purpose entity" means a corporation, | 171 |
partnership,
trust, limited liability company or other similar | 172 |
entity formed solely to
provide access, either directly or | 173 |
indirectly, to
institutional capital markets for a financing | 174 |
entity or licensed
viatical settlement provider or in connection | 175 |
with a transaction in which the securities in the special purpose | 176 |
entity are acquired by qualified
institutional buyers. | 177 |
(K)(O)
"Viatical settlement broker" means a
person that, on | 182 |
behalf
of a viator and for a fee, commission, or
other valuable | 183 |
consideration, offers
or attempts to negotiate
viatical | 184 |
settlements between a viator and one or more
viatical
settlement | 185 |
providers or viatical settlement brokers.
"Viatical settlement | 186 |
broker" does
not include
an
attorney, a certified public | 187 |
accountant, or a
financial planner
accredited
by a nationally | 188 |
recognized
accreditation agency, who is
retained to
represent the | 189 |
viator and,
whose compensation is not
paid directly or indirectly | 190 |
by the
viatical settlement provider or
purchaser, provided the | 191 |
viatical
settlement activities are incidental to the professional | 192 |
practice of
the
attorney, certified public accountant, or | 193 |
financial planner. | 194 |
(1)(a) A written agreement establishingbetween a viator and | 197 |
a viatical settlement provider or any affiliate of the viatical | 198 |
settlement provider that establishes the terms under which | 199 |
compensation or any thing of value, that is less than the expected | 200 |
death
benefit of the insurance policy is or certificate will be | 201 |
paid
in return
for the viator's present or future assignment, | 202 |
transfer,
sale, release, devise, or
bequest of
the death benefit | 203 |
or ownership of any
portion of the
insurance policy or | 204 |
certificate of insuranceany beneficial interest in the policy
or | 205 |
its ownership; | 206 |
(3) An agreement to transfer ownership or change the | 212 |
beneficiary
designation of the policy or certificate at a later | 213 |
date, regardless of
the date that compensation is paid to the | 214 |
viator(b) The transfer or acquisition for compensation or | 215 |
anything of value for ownership or beneficial interest in a trust | 216 |
or other person that owns such a policy if the trust or other | 217 |
person was formed or availed of for the principal purpose of | 218 |
acquiring one or more life insurance policies; | 219 |
(b) Loan proceeds that are used solely to pay premiums for | 241 |
the policy and the costs of the loan including interest, | 242 |
arrangement fees, utilization fees and similar fees, closing | 243 |
costs, legal fees and expenses, trustee fees and expenses, and | 244 |
third-party collateral provider fees and expenses, including fees | 245 |
payable to letter of credit issuers; | 246 |
(c) A loan made by a regulated financial institution in which | 247 |
the lender takes an interest in a life insurance policy solely to | 248 |
secure repayment of a loan or, if there is a default on the loan | 249 |
and the policy is transferred, the transfer of such a policy by | 250 |
the lender, provided that neither the default itself nor the | 251 |
transfer is pursuant to an agreement or understanding with any | 252 |
other person for the purpose of evading regulation under this | 253 |
chapter; | 254 |
(O)(S)
"Viator" means the owner of a life insurance policy or | 325 |
a
certificate holder under a group policy
that has not previously | 326 |
been viaticated who, in return for
compensation or any thing of | 327 |
value that is less than the expected
death
benefit of the policy | 328 |
or certificate, assigns, transfers,
sells,
devises, or bequests | 329 |
the death benefit or ownership of any
portion of
the insurance | 330 |
policy or certificate of insurance. For
the
purposes of this | 331 |
chapter, a
"viator" is not limited to an
owner of
a life insurance | 332 |
policy or a certificate holder under a
group
policy insuring the | 333 |
life of an individual with a terminal or
chronic illness or | 334 |
condition except where specifically addressed.
"Viator" does not | 335 |
include any of the following: | 336 |
(P)(T)
"Viatical settlement purchaser" means a person who | 344 |
givesprovides a
sum of money as consideration for a life | 345 |
insurance policy or an
interest in the death benefits of a life | 346 |
insurance policy that has been or will be the subject of a | 347 |
viatical settlement contract, or a
person who owns, acquires, or | 348 |
is entitled to a beneficial interest
in a trust that owns a | 349 |
viatical settlement contract or is the
beneficiary of a life | 350 |
insurance policy that has been or will be
the subject of a | 351 |
viatical settlement contract, for the purpose of
deriving an | 352 |
economic benefit.
"Viatical settlement purchaser"
does
not include | 353 |
any of the following: | 354 |
(S)
"Securities Act of 1933" has the same
meaning as in | 370 |
section
1707.01 of the Revised Code(X) "Regulated financial | 371 |
institution" means a bank, a savings association, or credit union | 372 |
operating under authority granted by the superintendent of | 373 |
financial institutions, the regulatory authority of any other | 374 |
state of the United States, the office of thrift supervision, the | 375 |
national credit union administration, or the office of the | 376 |
comptroller of the currency. | 377 |
Sec. 3916.02. No(A) Notwithstanding division (C) of this | 390 |
section, no person shall operate in this state as a
viatical | 391 |
settlement provider or, viatical settlement broker, or life | 392 |
expectancy provider without
first
having obtained a license from | 393 |
the superintendent of
insurance
and, if different fromthe owner | 394 |
of the insurance policy to be viaticated is not a resident of this | 395 |
state, from the comparable
official of the state of residence
of | 396 |
the viatorowner. If | 397 |
(B)(1) If there is
more than one viatorowner on a single | 398 |
policy
or
certificate and the
viatorsowners are residents of | 399 |
different
states, the
viatical settlement
shall be governed by | 400 |
the law of
the state in
which the viatorowner having the largest | 401 |
percentage
ownership of the
policy or
certificate resides or, if | 402 |
the viatorsowners hold equal
ownership, the
state of residence | 403 |
of one viatorowner agreed upon in
writing by all
viatorsowners. | 404 |
(C)(1) A person who represents the viator and is not | 410 |
compensated
directly or indirectly by the viatical settlement | 411 |
provider, who is
licensed as an attorney, certified public | 412 |
accountant, or financial
planner accredited by a nationally | 413 |
recognized accreditation agency
may negotiate viatical settlement | 414 |
contracts on behalf of a viator
without obtaining a license | 415 |
pursuant to division (A) of this
section if the viatical | 416 |
settlement activities are incidental to the professional practice | 417 |
of the attorney, certified public accountant, or financial | 418 |
planner. | 419 |
(2) An individual insurance agent, in good standing, who has | 420 |
been licensed as a resident or nonresident insurance agent with a | 421 |
life line of authority in this state for at least five years may | 422 |
operate as a viatical settlement broker without obtaining a | 423 |
license pursuant to division (A) of this section if the viatical | 424 |
settlement broker activities of the
insurance agent are | 425 |
incidental to the insurance agent's insurance
business | 426 |
activities. | 427 |
(B) A license issued under
this
chapter to a person other | 435 |
than an individual authorizes all
partners, officers, members, or | 436 |
designated employees of the person
to act as viatical settlement | 437 |
providers or viatical settlement
brokers, as applicable, and all | 438 |
those partners, officers, members,
or designated employees shall | 439 |
be named in the application and any
supplements to the | 440 |
application. | 441 |
(C) Upon the filing of an application under this section and | 442 |
the
payment of the license fee,
the superintendent shall make an | 443 |
investigation of the applicant and issue to
the applicant a | 444 |
license that
states in substance that the person is authorized to | 445 |
act as a viatical
settlement provider or, viatical settlement | 446 |
broker, or life expectancy provider, as applicable, if all of the | 447 |
following apply: | 448 |
(b) Evidence of financial responsibility in a format | 453 |
prescribed by the superintendent by possessing a minimum equity of | 454 |
not less than two hundred fifty thousand dollars in cash or cash | 455 |
equivalents reflected in the
applicant's audited financial | 456 |
statements. In
lieu of the minimum equity requirement, a viatical | 457 |
settlement
provider with positive equity shall provide either a | 458 |
surety bond
executed and issued by an insurer licensed in this | 459 |
state or an
irrevocable line of credit in the amount of two | 460 |
hundred fifty thousand
dollars; | 461 |
(E) An applicant shall provide all information requested by | 502 |
the
superintendent. The superintendent may, at any time, require | 503 |
an applicant to
fully disclose the identity of all stockholders, | 504 |
partners, officers, members,
and employees, and may, in the | 505 |
exercise of the superintendent's discretion,
refuse to issue a | 506 |
license to an applicant that is not an individual if the | 507 |
superintendent is not
satisfied that each officer, employee, | 508 |
stockholder, partner, or member who may
materially influence the | 509 |
applicant's conduct meets the standards set forth in
this chapter. | 510 |
(E)(F) Except as otherwise provided in this division, a | 511 |
license
as a
viatical settlement provider or, viatical settlement | 512 |
broker, or life expectancy provider
expires on the last
day of | 513 |
March next after its issuance or
continuance. A license as a | 514 |
viatical settlement provider
or,
viatical settlement broker, or | 515 |
life expectancy provider may, in the
discretion of the | 516 |
superintendent and the payment of an annual renewal fee | 517 |
established
by the superintendent by rule adopted in accordance | 518 |
with
chapterChapter 119.
of the Revised Code, be continued past | 519 |
the last
day of March next after its issue
and after the last day | 520 |
of March
in each succeeding year. Failure
to pay the renewal fee | 521 |
by the
required date results in the expiration of the
license | 522 |
without a hearing under Chapter 119. of the Revised Code. | 523 |
(G)(I) A viatical settlement
provider
or, viatical settlement | 538 |
broker, or life expectancy provider shall provide to the | 539 |
superintendent new or
revised
information regarding any change
in | 540 |
its officers, any stockholder owning ten per cent or
more of its | 541 |
stockholdersstock, or its partners,
directors, members, or | 542 |
designated
employees within thirty days of the change. | 543 |
Sec. 3916.05. (A) A person shall not use a viatical | 553 |
settlement
contract form or provide a disclosure statement form to | 554 |
a viator in this state
unless the viatical settlement contract | 555 |
form or the disclosure statement form
is filed with and approved | 556 |
by the superintendent of
insurance. The superintendent shall | 557 |
disapprove a viatical settlement contract
form or a disclosure | 558 |
statement form if, in the superintendent's opinion, the
viatical | 559 |
settlement contract
form, the disclosure statement form, or any | 560 |
provision contained therein fails to meet the requirements of | 561 |
section 3916.06 of the Revised Code, is
unreasonable, is contrary | 562 |
to the
interests of the public, or is otherwise misleading or | 563 |
unfair to the
viator.
At the superintendent's
discretion, the | 564 |
superintendent
may require the submission of advertising
material | 565 |
to which
section 3916.17 of the Revised Code applies. | 566 |
(e) That the viator has a right to rescind the viatical | 593 |
settlement
contract for at least fifteenby providing notice of | 594 |
rescission and repaying all viatical settlement proceeds paid to | 595 |
the viator pursuant to the escrow agreement within
sixty calendar | 596 |
days after all parties sign the viatical settlement
contract or | 597 |
thirty calendar days after the
viator receives the
viatical | 598 |
settlement proceeds, as provided in
section 3916.08 of
the | 599 |
Revised Code, whichever is sooner. If the insured dies during
the | 600 |
rescission period, the viatical settlement contract shall be | 601 |
deemed to
have been
rescinded, subject to repayment by the viator | 602 |
or the viator's estate of all viatical
settlement proceeds to the | 603 |
viatical settlement
companyprovider within sixty days of
the | 604 |
death of the
insured. | 605 |
(h) That following execution of the viatical settlement | 617 |
contract, the viatical settlement provider, the viatical | 618 |
settlement broker, or the
authorized representative of the | 619 |
viatical settlement provider or viatical settlement broker
may | 620 |
contact the insured for the purpose
of determining the
insured's | 621 |
health status and to confirm the
insured's residential
or | 622 |
business address and telephone number or
for other purposes | 623 |
permitted by law. Any such contact shall be
limited to once in | 624 |
any three-month period if the insured has a
life expectancy of | 625 |
more than one year or to once per month if the
insured has a life | 626 |
expectancy of one year or less. | 627 |
"All medical, financial, or personal information solicited or | 641 |
obtained by a viatical settlement provider or viatical settlement | 642 |
broker
about an insured, including the insured's identity or the | 643 |
identity
of family members, a spouse, or a significant other may | 644 |
be disclosed as
necessary to effect the viatical settlement | 645 |
between the viator and
the viatical settlement provider. If you | 646 |
are asked to provide
this information, you will be asked to | 647 |
consent to the disclosure.
The information may be provided to | 648 |
someone who buys the policy or
provides funds for the purchase. | 649 |
You may be asked to renew your
permission to share information | 650 |
every two years." | 651 |
(e) The dollar amount of the current death benefit payable
to | 675 |
the viatical
settlement provider under the policy or
certificate, | 676 |
and, if known, the
availability of any additional
guaranteed | 677 |
insurance benefits, the dollar
amount of any accidental
death and | 678 |
dismemberment benefits under the policy or
certificate,
and the | 679 |
viatical settlement provider'sextent to which the
viator's | 680 |
interest in those
benefits will be transferred as a
result of the | 681 |
viatical settlement contract. | 682 |
(f) The name, business
address, and telephone number of the | 683 |
independent third-party
escrow agent, and the fact that the | 684 |
viator
or owner
may inspect or
receive
copies of the relevant | 685 |
escrow or
trust agreements or
documentsThat an escrow agent | 686 |
shall provide escrow services to the parties pursuant to a written | 687 |
agreement, signed by the viatical settlement provider, the | 688 |
viatical settlement broker, and the viator. At the close of | 689 |
escrow, the escrow agent will distribute the proceeds of the sale | 690 |
to the viator, minus any compensation to be paid to any other | 691 |
persons who provided services and to whom the viator has agreed to | 692 |
compensate out of the gross amount offered by the viatical | 693 |
settlement purchaser. All persons receiving any form of | 694 |
compensation under the escrow agreement shall be clearly | 695 |
identified, including name, business address, telephone number, | 696 |
and tax identification number. | 697 |
(d) The amount and method of calculating the viatical | 709 |
settlement
broker's compensation and, if any portion of
the | 710 |
viatical settlement broker's
compensation is taken
from the | 711 |
viatical settlement offer, the
total amount of the
viatical | 712 |
settlement offer and the viatical settlement
broker's | 713 |
compensation as a percentage of that total. As used in
this | 714 |
division, "compensation" includes anything of value paid or
given | 715 |
to a viatical settlement broker related to the settlement
of a | 716 |
policy. | 717 |
(D) If, for the purpose of engaging in the business of | 729 |
viatical settlements, a viatical settlement broker or
viatical | 730 |
settlement provider is
party to a plan,
transaction, or series | 731 |
of transactions to
originate, renew,
continue, or finance a life | 732 |
insurance policy
with the insurer
that issued the policy within | 733 |
the first five
years of the
issuance of that policy, the | 734 |
viatical settlement broker or
viatical settlement provider shall | 735 |
fully disclose the
plan, transaction, or
series of transactions | 736 |
to that insurer
prior to the initiation of
the plan, | 737 |
transaction, or series of
transactions. | 738 |
(B) Within twenty days after a viator executes
documents | 754 |
necessary to transfer any rights under an insurance
policy or | 755 |
certificate or within twenty days of entering any
expressed or | 756 |
implied
agreement, option,
promise, or other form of
understanding | 757 |
to viaticate the policy,
the viatical settlement
provider
shall | 758 |
give written notice to the
insurer that issued that
insurance | 759 |
policy or certificate that the
policy or certificate has
or will | 760 |
become a viaticated policy or
certificate. The notice
shall be | 761 |
accompanied by the documents
required by division (C) of
this | 762 |
section. | 763 |
(C) The viatical settlement provider shall deliver a
copy of | 764 |
the
medical
release required under division (A)(2) of
this | 765 |
section, a
copy of
the viator's application for the viatical | 766 |
settlement
contract, the
notice required under division (B) of | 767 |
this section,
and a request
for verification of coverage to the | 768 |
insurer that
issued the life
insurance policy or certificate that | 769 |
is the
subject of the
viatical transaction. The viatical | 770 |
settlement
provider shall
use the NAIC's
form for verification of | 771 |
coverage
unless standards for
verification areanother form is | 772 |
developed or
approved by
the superintendent of insurance. | 773 |
(D) The insurer shall respond to a request for verification | 774 |
of
coverage submitted on an approved form by a viatical | 775 |
settlement provider or viatical settlement broker
within
thirty | 776 |
calendar days
after the date the request
is
received and
shall | 777 |
indicate whether,
based on the medical
evidence
and
documents | 778 |
provided, the insurer
intends to pursue an
investigation at that | 779 |
time regarding possible
fraud or the
validity of the life | 780 |
insurance contract or
certificate that is
the subject of the | 781 |
request.
The insurer shall
accept an original
or facsimile or | 782 |
electronic copy of such request
and any
accompanying | 783 |
authorization signed by the viator. | 784 |
(E) Prior to or at the time of execution of the viatical | 785 |
settlement contract, the viatical settlement provider
shall | 786 |
obtain
a witnessed
document in which the viator consents to
the | 787 |
viatical
settlement contract, represents that the viator has a | 788 |
full and
complete understanding of the viatical settlement | 789 |
contract and a
full and complete understanding of the benefits of | 790 |
the life
insurance policy or certificate, and acknowledges that | 791 |
the viator
is entering into the viatical settlement contract | 792 |
freely and
voluntarily and, for persons with a terminal or chronic | 793 |
illness or
condition, acknowledges that the insured has a terminal | 794 |
or chronic
illness and that the terminal or chronic illness or | 795 |
condition was
diagnosed after the life insurance policy or | 796 |
certificate was
issued. | 797 |
Sec. 3916.08. (A) Each viatical settlement contract entered | 805 |
into
in this state
shall provide the viator with an unconditional | 806 |
absolute right
to rescind the contract
for at least fifteenby | 807 |
providing notice of rescission and repaying all viatical | 808 |
settlement proceeds paid to the viator pursuant to the escrow | 809 |
agreement within sixty calendar days after all parties
sign the | 810 |
viatical settlement contract or thirty calendar days
after
the | 811 |
receipt of the viatical
settlement
proceeds pursuant to
division | 812 |
(A) of section 3916.09 of the Revised Code, whichever is sooner. | 813 |
If the
insured
dies during the rescission period, the viatical | 814 |
settlement
contract is deemed to have been rescinded, subject to | 815 |
repayment of
all viatical settlement proceeds to the viatical | 816 |
settlement
provider within sixty
days of the death of the | 817 |
insured.
If | 818 |
(B) If the viator rescinds the
viatical settlement
contract | 819 |
and any compensation has been paid to any person under the terms | 820 |
of the escrow agreement, including the viatical settlement | 821 |
provider, the viatical settlement broker, or any insurance agent, | 822 |
the person that received the compensation shall refund the full | 823 |
amount received to the viatical
settlement provider within
five | 824 |
business days following receipt
of written notice from the | 825 |
viatical settlement provider.
The notice shall include a copy of | 826 |
the viator's
notice of
rescission or the notice of the death of | 827 |
the viator. | 828 |
Sec. 3916.09. (A) The viatical settlement provider
shall | 835 |
instruct
the viator to send the executed documents required
to | 836 |
effect the change in
ownership, assignment, or
change in | 837 |
beneficiary directly to the independent escrow agent. Within
three | 838 |
business days after the
date the escrow agent receives the | 839 |
documents, or from the date the viatical settlement
provider | 840 |
receives the documents if the viator
erroneously provides
the | 841 |
documents directly to the viatical settlement
provider, the | 842 |
viatical settlement
provider shall pay or
transfer
the proceeds of | 843 |
gross amount paid by the viatical
settlement purchaser to anthe | 844 |
escrow oragent for deposit in a
trust
account set up for that | 845 |
purpose by the escrow agent in a state or federally
chartered | 846 |
regulated
financial
institution whose deposits
are
insured by | 847 |
the federal
deposit
insurance corporation.
Upon
payment of the | 848 |
settlement
proceeds
into the escrow or trust
account, the escrow | 849 |
agent
or
trustee
shall deliver the original
change in ownership, | 850 |
assignment,
or
change in beneficiary forms to
the viatical | 851 |
settlement provider, a representative of the
viatical settlement | 852 |
provider, or
related provider trust. Upon the
licensed | 853 |
provider'sescrow agent's receipt of
the acknowledgment
of the | 854 |
properly completed transfer of
ownership,
assignment, or | 855 |
designation of beneficiary from the
insurance
company, the | 856 |
licensed providerescrow agent shall instruct the escrow
agent to | 857 |
pay the settlement proceeds to the viator and any other person | 858 |
pursuant to the viatical settlement contract and the escrow | 859 |
agreement. The escrow
agent shall
make payment within three | 860 |
business days of the date
the provider
received the acknowledged | 861 |
forms from the insurance
companyFunds
are considered sent by a | 862 |
viatical settlement provider to
a viator as of the
date that the | 863 |
escrow agent either releases the
funds for wire
transfer to the | 864 |
viator or places a check for
delivery to the
viator via United | 865 |
States postal service or other
nationally
recognized delivery | 866 |
service. | 867 |
(B) Failure to transfer the proceeds to the viator within
the | 868 |
period of time disclosed pursuant to division (A)(1)(f)
of
section | 869 |
3916.06 of the Revised Code renders the viatical
settlement | 870 |
contract voidable by the viator for lack of
consideration until | 871 |
the time
consideration is tendered to and
accepted by the viator. | 872 |
If a viatical settlement
contract is
voided by the viator pursuant | 873 |
to this division, ownership of
the
insurance policy or certificate | 874 |
reverts to the viator or to
the
viator's estate if the viator is | 875 |
deceased, irrespective of any
transfer of ownership of the policy | 876 |
or certificate by the viator, viatical settlement
provider, or | 877 |
any other person. | 878 |
Sec. 3916.10. After a viatical settlement has occurred, | 879 |
contact with the insured for the purpose of
determining the health | 880 |
status of the insured by the viatical settlement
provider
or | 881 |
viatical settlement broker shall be made only by the
viatical | 882 |
settlement provider or, viatical
settlement broker licensed
in | 883 |
this state, or the authorized
representative of the viatical | 884 |
settlement
provider or
viatical settlement broker.
The viatical | 885 |
settlement
provider or, viatical
settlement broker, or | 886 |
authorized
representative shall
not contact the insured for the | 887 |
purpose of
determining
the
insured's health status more than once | 888 |
every three
months if the
insured
has a life expectancy of more | 889 |
than one year,
or more than
once per month if
the insured has a | 890 |
life expectancy
of one year or
less. The viatical
settlement | 891 |
provider or viatical settlement
broker shall
explain the | 892 |
procedure
for making these contacts at
the time the
viatical | 893 |
settlement
contract is
entered into. | 894 |
(2) Every licensee, or
person from whom
information is | 933 |
sought, and
all officers,
directors, employees,
and agents of | 934 |
any
licensee, or person
from whom
information is
sought, shall | 935 |
provide
to the examiners timely,
convenient, and
free access at | 936 |
all
reasonable hours at the
licensee's or person's offices to all | 937 |
books,
records, accounts,
papers, documents, assets, and computer | 938 |
or
other recordings
relating to the property, assets, business, | 939 |
and
affairs of the
licensee being
examined. The officers, | 940 |
directors, employees, and
agents of the
licensee or person shall | 941 |
facilitate the examination
and aid in the
examination so far as | 942 |
it
is in their power to do
so. | 943 |
The refusal of a licensee, by its officers,
directors, | 944 |
employees,
or agents, to
submit to examination or to
comply with | 945 |
any reasonable
written
request of the superintendent
shall be | 946 |
grounds for suspension,
revocation, denial of issuance,
or | 947 |
nonrenewal of any license or
authority held by the licensee to | 948 |
engage in the
viatical
settlement business or other business | 949 |
subject to the
superintendent's jurisdiction. Any proceedings for | 950 |
suspension,
revocation, or denial, or nonrenewal of any license or | 951 |
authority
is subject
to chapterChapter 119. of the Revised Code. | 952 |
(3) The superintendent has the power to issue subpoenas, to | 953 |
administer oaths, and to examine under oath any person as to any | 954 |
matter
pertinent to the examination. Upon the failure or refusal | 955 |
of a
person to obey a subpoena, the superintendent may petition a | 956 |
court
of competent jurisdiction, and, upon proper showing, the | 957 |
court may
enter an order compelling the witness to appear and | 958 |
testify or
produce documentary evidence. Failure to obey the court | 959 |
order
shall be punishable as contempt of court. | 960 |
(4) When making an examination under this chapter, the | 961 |
superintendent may retain attorneys, appraisers, independent | 962 |
actuaries,
independent certified public accountants, or other | 963 |
professionals and
specialists as examiners, and the licensee that | 964 |
is the subject of
the
examination shall
bear the cost of those | 965 |
examiners pursuant to division (F) of this section. Examiners
who | 966 |
are appointed by
the superintendent, but
who are not employees
of | 967 |
the department
of insurance, shall be
compensated for their
work, | 968 |
travel, and
living expenses at
reasonable and customary
rates. | 969 |
(6) Nothing contained in this chapter limits the | 976 |
superintendent's
authority to use and, if appropriate, to make | 977 |
public any final or preliminary
examination report, any examiner | 978 |
or licensee working papers or
other
documents, or
any other | 979 |
information discovered or developed
during
the course
of any | 980 |
examination in the furtherance of any
legal or
regulatory
action | 981 |
that the superintendent, in the
superintendent's
sole | 982 |
discretion,
considers appropriate. | 983 |
(C)(1) Examination reports shall be comprised of only facts | 984 |
appearing upon the books, records, or other documents of the | 985 |
licensee, its
agents, or other persons examined, or as ascertained | 986 |
from the testimony of its officers, agents, or other persons | 987 |
examined concerning its affairs, and the conclusions and | 988 |
recommendations that the examiners find reasonably warranted from | 989 |
the facts. | 990 |
(2) Upon completion of the examination, the examiner in | 991 |
charge
shall file with the superintendent a verified written | 992 |
report of
examination. Upon receipt of the verified report, the | 993 |
superintendent
shall transmit the report to the licensee examined, | 994 |
together with a
notice that
shall afford the
licensee examined a | 995 |
reasonable
opportunity of
not more than thirty days
from receipt | 996 |
of the
report to make a
written submission or
rebuttal with | 997 |
respect to
any matters
contained in the examination
report. | 998 |
(2) Except as otherwise provided in this chapter or in the | 1006 |
law of
another state or jurisdiction that is substantially similar | 1007 |
to this
chapter, all examination reports, working papers, recorded | 1008 |
information, documents, and copies of those reports, papers, | 1009 |
information, documents, and copies produced by, obtained by, or | 1010 |
disclosed to the superintendent or to any other person in the | 1011 |
course of an examination made under this chapter or under the law | 1012 |
of another state or jurisdiction that is substantially similar to | 1013 |
this chapter, or in the course of the superintendent's analysis or | 1014 |
investigation of the financial condition or market conduct of a | 1015 |
licensee are confidential by law and privileged, are not a public | 1016 |
record open for inspection under section 149.43 of the Revised | 1017 |
Code, are not subject to subpoena, and are not subject to | 1018 |
discovery or admissible in evidence in any private civil action. | 1019 |
The superintendent may use the documents, materials, or other | 1020 |
information in the furtherance of any regulatory or legal action | 1021 |
brought as part of the superintendent's official duties. | 1022 |
(3) Documents, materials, or other information, including, | 1023 |
but
not limited to, all working papers, and copies of working | 1024 |
papers, in the
possession or control of the NAIC and its | 1025 |
affiliates and
subsidiaries are confidential by law and | 1026 |
privileged, are not subject to subpoena, and are not subject to | 1027 |
discovery or
admissible in evidence in any private civil action, | 1028 |
if either of the
following applies: | 1029 |
(4) Neither the superintendent nor any person that received | 1040 |
the
documents, material, or other information while acting under | 1041 |
the
authority of the superintendent, including the NAIC and its | 1042 |
affiliates and subsidiaries, shall be permitted to testify in any | 1043 |
private
civil action concerning any confidential
documents, | 1044 |
materials, or information subject to division (D)(1) of
this | 1045 |
section. | 1046 |
(i) Share documents, materials, or other information, | 1050 |
including
the confidential and privileged documents, materials, or | 1051 |
information
subject to division (D)(1) of this section, with other | 1052 |
state, federal, and international regulatory agencies, with the | 1053 |
NAIC and its affiliates and subsidiaries, and with
state, federal, | 1054 |
and international law enforcement authorities, if
the recipient | 1055 |
agrees to maintain the confidentiality and
privileged status of | 1056 |
the document, material, communication, or
other information; | 1057 |
(ii) Receive documents, materials, communications, or | 1058 |
information, including otherwise confidential and privileged | 1059 |
documents,
materials, or information, from the NAIC and its | 1060 |
affiliates
and subsidiaries, and from regulatory and law | 1061 |
enforcement officials of other foreign or
domestic jurisdictions; | 1062 |
(8) Nothing contained in this chapter prevents or prohibits | 1081 |
the
superintendent from disclosing the content of an examination | 1082 |
report, preliminary examination report or results, or any matter | 1083 |
relating to those reports or results, to the official of any other | 1084 |
state or country that is comparable to the superintendent, or to | 1085 |
law enforcement officials of this or any other state or agency of | 1086 |
the federal government at any time, or to the NAIC, if the agency | 1087 |
or office receiving the report or matters relating to it agrees in | 1088 |
writing to hold it confidential and in a manner
consistent with | 1089 |
this chapter. | 1090 |
(2) Notwithstanding the requirements of division (E) of this | 1102 |
section, the superintendent may retain from time to time, on an | 1103 |
individual basis, qualified actuaries, certified public | 1104 |
accountants, or other similar individuals who are independently | 1105 |
practicing their professions, even though these persons may from | 1106 |
time to time be similarly employed or retained by persons subject | 1107 |
to examination under this chapter. | 1108 |
(3) Upon an insurer's failure to comply with
division (A) of | 1127 |
this
section, the
superintendent may initiate
proceedings in | 1128 |
accordance with
Chapter
119. of the Revised Code
to revoke, | 1129 |
suspend, or
refuse to renew
the certificate of
authority or | 1130 |
license of the insurer. Additionally, theThe superintendent
may | 1131 |
request the attorney
general to initiate a civil
action in
the | 1132 |
court of common pleas of
Franklin county to obtain
and
enforce a | 1133 |
judgment for expenses
incurred in the performance of a
market | 1134 |
conduct examination. | 1135 |
(2) No cause of action shall arise nor shall any liability
be | 1141 |
imposed against any person for the act of communicating or | 1142 |
delivering
information or data to the superintendent, any | 1143 |
authorized representative
of the superintendent, or any examiner | 1144 |
appointed by the
superintendent pursuant to an examination made | 1145 |
under this chapter,
if the act of communication or delivery was | 1146 |
performed in good
faith and without fraudulent intent or the | 1147 |
intent to deceive.
Division (G)(2) of this sectionThis division | 1148 |
does not
abrogate or modify in any
way any common law or statutory | 1149 |
privilege or immunity previously enjoyed
by any person identified | 1150 |
in division (G)(1) of this
section. | 1151 |
(3) A person identified in division (G)(1) or (2) of this | 1152 |
section
shall be entitled to an award of attorney's fees and costs | 1153 |
if the
person is the prevailing party in a civil action for libel, | 1154 |
slander, or
any other relevant tort arising out of activities in | 1155 |
carrying out the
provisions of this chapter and the party bringing | 1156 |
the action was
not substantially justified in bringing the action. | 1157 |
For purposes
of this division (G)(3) of this section, a proceeding | 1158 |
is
"substantially
justified" if it had a reasonable basis in law | 1159 |
or
fact at the time that
it was initiated. | 1160 |
Sec. 3916.12. (A) Each viatical settlement provider
and | 1164 |
viatical
settlement broker licensedlicensee under this chapter | 1165 |
shall file with the
superintendent of insurance, on
or before the | 1166 |
first day of
March
of each year, an annual statement
containing | 1167 |
the information
required by the
superintendent by rule
adopted in | 1168 |
accordance with
chapter
119. of the Revised Codeverified under | 1169 |
oath by two officers in the form prescribed by the | 1170 |
superintendent. The annual statement for a viatical settlement | 1171 |
provider shall include the following information about the | 1172 |
viatical settlement provider's transactions during the previous | 1173 |
calendar year, unless newly licensed, in which case the | 1174 |
superintendent may require additional years: | 1175 |
(1) A list of each life insurance policy, including policy | 1176 |
number, date of issue, viator, insured, insurance company issuing | 1177 |
policy, date viatical settlement contract signed by viator; | 1178 |
viatical settlement broker, agent of record on the policy, any | 1179 |
life insurance agents receiving compensation, regardless of the | 1180 |
form, and any premium finance companies; | 1181 |
(B) On or before the first day of May of each year, a | 1189 |
viatical settlement provider licensed in this state shall file | 1190 |
with the superintendent its financial statement, audited by an | 1191 |
independent certified public accountant along with a letter | 1192 |
stating whether any significant deficiencies or material | 1193 |
weaknesses were detected during the audit pursuant to statement on | 1194 |
auditing standards number 112 or as amended or superseded. | 1195 |
(2) Viatical settlement providers may assume that the users | 1207 |
of the interim financial statements have access to the prior | 1208 |
fiscal year-end audited financial statements and that the adequacy | 1209 |
of additional disclosure needed for a fair presentation, except in | 1210 |
regard to material contingencies, may be determined in that | 1211 |
context. A footnote disclosure that would substantially duplicate | 1212 |
the disclosure contained in the audited financial statements for | 1213 |
the preceding fiscal year may be omitted. A footnote disclosure | 1214 |
shall be provided if events subsequent to the fiscal year end have | 1215 |
a material impact on the viatical settlement provider. | 1216 |
(D) A viatical settlement provider that willfully fails to | 1217 |
file the annual statements required by this section, or willfully | 1218 |
fails to reply within thirty calendar days to a written inquiry | 1219 |
from the superintendent or the superintendent's designee, shall, | 1220 |
in addition to other penalties provided by this chapter, be | 1221 |
subject to a penalty of up to two hundred fifty dollars per day, | 1222 |
not to exceed twenty-five thousand dollars in the aggregate for | 1223 |
each such failure. | 1224 |
Sec. 3916.13. Except as otherwise permitted or required by | 1230 |
law, a viatical
settlement provider, viatical
settlement
broker, | 1231 |
insurance company, insurance agent, insurance
broker, information | 1232 |
bureau, rating agency or company, or any other
person with actual | 1233 |
knowledge of
an insured's identity, shall not
disclose that | 1234 |
identity as an insured,
including
the insured's name
and | 1235 |
individual identification data, or the insured's
financial or | 1236 |
medical information, unless
any of the following apply: | 1237 |
(3) In lieu of an examination under this chapter of any | 1280 |
foreign
or alien licensee licensed under this chapter, the | 1281 |
superintendent,
at the superintendent's discretion, may accept an | 1282 |
examination
report on the licensee as prepared by the official of | 1283 |
the
licensee's state of domicile or port-of-entry state who is | 1284 |
comparable to the superintendent. As far as is practical, the | 1285 |
superintendent shall cooperate with that official for any | 1286 |
examination of a foreign or alien licensee. | 1287 |
(2) The applicant or licensee or any officer, partner, | 1301 |
member, key
management
personnel, or designee of the applicant or | 1302 |
licensee has been convicted of
fraudulent or
dishonest practices, | 1303 |
is subject
to a final administrative action in another state, has | 1304 |
been the subject of an administrative or civil action brought by | 1305 |
the department of commerce, division of securities, or
is | 1306 |
otherwise shown to be
untrustworthy or incompetent. | 1307 |
(4) The licensee or any officer, partner, member, key | 1310 |
management
personnel, or designee of the licensee has been | 1311 |
convicted of or has pleaded
guilty or no
contest
to a felony or to | 1312 |
a misdemeanor involving fraud, moral turpitude, dishonesty,
or | 1313 |
breach of trust, regardless of whether a judgment of conviction | 1314 |
has been
entered by the court. | 1315 |
(10) The licensee or any officer, partner, member, key | 1336 |
management
personnel, or designee of the licensee has committed | 1337 |
any coercive, fraudulent,
or dishonest
act, or made any untrue, | 1338 |
deceptive, or misleading statement, in connection
with a viatical | 1339 |
transaction or a proposed viatical transaction. | 1340 |
(B) Before the superintendent refuses to issue a license | 1341 |
under
this chapter, or suspends,or revokes, or refuses to renew | 1342 |
the
license of a
viatical settlement provider or, viatical | 1343 |
settlement
broker, or life expectancy provider, the superintendent | 1344 |
shall provide the licensee or applicant
with notice and an | 1345 |
opportunity for hearing as provided in
chapterChapter
119. of the | 1346 |
Revised Code, except as follows: | 1347 |
(b) If the certified mail envelope is returned with an | 1356 |
endorsement showing that service was refused, or that the envelope | 1357 |
was
unclaimed, the notice and all subsequent notices required by | 1358 |
Chapter
119. of the Revised Code may be served by ordinary mail to | 1359 |
the last known address of the
licensee or applicant. The mailing | 1360 |
shall be evidenced by a certificate of
mailing. Service is deemed | 1361 |
complete as of the date of such certificate
provided that the | 1362 |
ordinary mail envelope is not returned by the postal
authorities | 1363 |
with an endorsement showing failure of delivery. The time period | 1364 |
in which to request a hearing, as provided in Chapter 119. of the | 1365 |
Revised Code,
begins to run on the date of mailing. | 1366 |
(2) Any subpoena for the appearance of a witness or the | 1384 |
production of
documents or other evidence at a hearing, or for the | 1385 |
purpose of taking
testimony for use at a hearing, shall be served | 1386 |
by certified mail, return
receipt requested, by an attorney or by | 1387 |
an employee of the department
designated by the superintendent. | 1388 |
Such subpoenas shall be enforced in the
manner provided in section | 1389 |
119.09 of the Revised Code. Nothing in this section shall be | 1390 |
construed as limiting the superintendent's other statutory powers | 1391 |
to issue
subpoenas. | 1392 |
(1) The policy or certificate was issued upon the viator's | 1408 |
exercise of conversion rights arising out of a group
policy or | 1409 |
certificate,
provided the total of the time covered
under the | 1410 |
conversion policy or
certificate plus the time covered
under the | 1411 |
groupprior policy or
certificate is at least
twenty-foursixty | 1412 |
months. The
time covered
under thea group
policy or certificate | 1413 |
shall be
calculated without
regard to any
change in insurance | 1414 |
carriers,
provided the coverage
has been
continuous and under the | 1415 |
same group
sponsorship. | 1416 |
(B)(C) Copies of the independent evidence described in | 1466 |
division
(A)(4)(B)(2) of this section and documents
required by | 1467 |
section
3916.07
of the Revised Code shall be
submitted to the | 1468 |
insurer when
the viatical settlement provider or any other party | 1469 |
entering into
a viatical settlement contract with a viator | 1470 |
submits
a request to
the insurer for
verification of coverage.
| 1471 |
The copies
shall be
accompanied by a
letter of attestation from | 1472 |
the viatical
settlement provider that
the copies are true and | 1473 |
correct
copies
of the documents received
by the viatical | 1474 |
settlement
provider. | 1475 |
(C)(D) If the viatical settlement provider submits to
the | 1476 |
insurer a
copy of the owner or insured's certification and | 1477 |
independent
evidence described
in division
(A)(4)(B)(2) of this | 1478 |
section when the
viatical settlement provider submits a
request | 1479 |
to the
insurer to effect the
transfer of the policy or | 1480 |
certificate to the viatical settlement
provider,
the
copy | 1481 |
conclusively establishes that the
viatical settlement
contract | 1482 |
satisfies the requirements of this
section, and the
insurer shall | 1483 |
timely respond to the request. | 1484 |
(E) No insurer, as a condition of responding to a request for | 1485 |
verification of coverage or effecting the transfer of a policy | 1486 |
pursuant to a viatical settlement contract, may require the | 1487 |
viator, insured, viatical settlement provider, or
viatical | 1488 |
settlement broker to sign any
form, disclosure,
consent, or | 1489 |
waiver form that has not been
approved by the
superintendent of | 1490 |
insurance for use in connection
with viatical
settlement | 1491 |
contracts. | 1492 |
(G) A viatical settlement provider or viatical settlement | 1500 |
broker that is party to a
plan, transaction,
or series of | 1501 |
transactions to originate, renew,
continue, or
finance a life | 1502 |
insurance policy with the insurer for
the purpose
of engaging in | 1503 |
the business of viatical settlements at
any time
prior to or | 1504 |
during the first five years after the insurer
issues
the policy | 1505 |
shall fully disclose the plan, transaction, or
series
of | 1506 |
transactions to the insurer that issued that policy. | 1507 |
Sec. 3916.17. (A) The general assembly hereby declares
that | 1508 |
the
purpose of this section is to provide prospective viators
with | 1509 |
clear and unambiguous statements in the advertisement of
viatical | 1510 |
settlements and to assure the clear, truthful, and
adequate | 1511 |
disclosure of the benefits, risks, limitations, and
exclusions of | 1512 |
any viatical settlement contract. This purpose is
intended to be | 1513 |
accomplished by the establishment of guidelines and
standards of | 1514 |
permissible and impermissible conduct in the
advertising of | 1515 |
viatical settlements to assure that product
descriptions are | 1516 |
presented in a manner that prevents unfair,
deceptive, or | 1517 |
misleading advertising and is conducive to accurate
presentation | 1518 |
and description of viatical settlements through the
advertising | 1519 |
media and material used by viatical settlement
licensees. | 1520 |
Divisions (B) to (P)(Q) of this section apply to any | 1521 |
advertising
of
viatical settlement contracts, or any related | 1522 |
products or
services
intended for dissemination in this state, | 1523 |
including, but
not
limited to, internet advertising viewed by | 1524 |
persons located in
this
state. In cases in which disclosure | 1525 |
requirements are
established
pursuant to federal regulation, this | 1526 |
section shall be
interpreted
so as to minimize or eliminate | 1527 |
conflict with federal
regulation
wherever possible. | 1528 |
(3) All materials filed with the superintendent pursuant to | 1536 |
division (B)(1) of this section shall be filed in a format | 1537 |
prescribed by the superintendent. Any filings not disapproved by | 1538 |
the superintendent within sixty days of the superintendent's | 1539 |
receipt of the materials shall be considered approved unless the | 1540 |
superintendent requests additional time, in writing, from the | 1541 |
person that filed the materials. The superintendent may assess | 1542 |
fees for the review of the materials under this division. | 1543 |
(C) Every viatical settlement licensee shall establish and
at | 1544 |
all
times shall maintain a
system of control over the content, | 1545 |
form,
and method of
dissemination of all advertisements of its | 1546 |
contracts, products,
and services. All advertisements, regardless | 1547 |
of by whom they are
written, created, designed, or presented, | 1548 |
shall be the
responsibility of the viatical settlement
licensee | 1549 |
and of
the individual who created or
presented the | 1550 |
advertisement.
A
system of control shall include
regular routine | 1551 |
notification, at
least once a year, to agents and
others | 1552 |
authorized by the
viatical
settlement licensee who disseminate | 1553 |
advertisements of the
requirements and procedures for approval | 1554 |
prior to the use of any
advertisements not furnished by the | 1555 |
viatical settlement
licensee. | 1556 |
(C)(D) All advertisements that are subject to this section | 1557 |
shall be
truthful and not misleading in fact or by implication. | 1558 |
The form and content of an advertisement of a viatical settlement | 1559 |
contract shall be sufficiently complete and clear so as to avoid | 1560 |
deception and shall not have the capacity or tendency to mislead | 1561 |
or deceive. The determination of whether an advertisement has the | 1562 |
capacity or tendency to mislead or deceive shall be made by the | 1563 |
superintendent of insurance, from the overall impression that the | 1564 |
advertisement may be reasonably expected to create upon a person | 1565 |
of average education or intelligence within the segment of the | 1566 |
public to which it is directed. | 1567 |
(1)
"Guaranteed,"
"fully secured,"
"100 percent secured," | 1573 |
"fully
insured,"
"secure,"
"safe,"
"backed by rated insurance | 1574 |
companies,"
"backed by federal law,"
"backed by state law," or | 1575 |
"state guaranty
funds," or similar representations; | 1576 |
An advertisement shall not omit material information or use | 1599 |
any
words, phrases, statements, references, or illustrations if | 1600 |
the omission
or use has the capacity, tendency, or effect of | 1601 |
misleading or deceiving
viators, as to the nature or extent of any | 1602 |
benefit, loss covered,
premium payable, or state or federal tax | 1603 |
consequence. The fact
that the viatical settlement contract | 1604 |
offered is made available
for inspection prior to consummation of | 1605 |
the sale, that an offer is
made to refund the payment if the | 1606 |
viator is not satisfied, or that
the viatical settlement contract | 1607 |
includes a
"free look" period
that satisfies or exceeds legal | 1608 |
requirements, does not remedy any
misleading statements. | 1609 |
(5) The words
"free,"
"no cost,"
"without cost,"
"no | 1622 |
additional
cost,"
"at no extra cost," or words of similar import | 1623 |
shall not be used
with respect to any life insurance policy or to | 1624 |
any benefit or service unless
true. An advertisement may
specify | 1625 |
the charge for a benefit or a
service or may state that a
charge | 1626 |
is included in the payment or
use other appropriate
language. | 1627 |
(b) In using testimonials, appraisals, analyses, or | 1639 |
endorsements,
the viatical settlement licensee makes as its own | 1640 |
all the
statements contained
in the testimonials, appraisals, | 1641 |
analyses,
or endorsements, and
the statements are subject to all | 1642 |
the
provisions of this section. | 1643 |
(c) If the individual making a testimonial, appaisal | 1644 |
appraisal,
analysis,
or endorsement has a
funancialfinancial | 1645 |
interest in the
viatical
settlement
provider or related entity | 1646 |
subject of that testimonial, appraisal, analysis, or endorsement | 1647 |
directly or indirectly as a stockholder,
director,
officer, | 1648 |
employee, or otherwise, or receives any benefit
directly
or | 1649 |
indirectly other than required union scale wages, that
fact
shall | 1650 |
be prominently disclosed in the advertisement. | 1651 |
(d) An advertisement shall not state or
im-plyimply that a | 1652 |
viatical
settlement contract benefit or service has been approved | 1653 |
or endorsed by a group of individuals, society,
association, or | 1654 |
other organization unless that is the fact and
unless any | 1655 |
relationship between the individualgroup of individuals, society, | 1656 |
association, or
organization and the viatical settlement
provider | 1657 |
is disclosed.
If
the entity making the endorsement or
testimonial | 1658 |
is owned,
controlled, or managed by the viatical
settlement | 1659 |
provider, or
receives any payment or other
consideration from the | 1660 |
viatical
settlement provider for
making an endorsement or | 1661 |
testimonial, that
fact shall be disclosed
in the advertisement. | 1662 |
(H)(I) All advertisements about a viatical
settlement | 1674 |
provider
or
its viatical settlement contract,
products,
or | 1675 |
services shall
clearly identify the viatical settlement | 1676 |
provider's name. If any
specific viatical
settlement
contract is | 1677 |
advertised, the viatical
settlement
contract shall be
identified | 1678 |
either by form number or
some other
appropriate
description. If | 1679 |
an application is part of
the
advertisement, the
name of the | 1680 |
viatical settlement
provider
shall be shown on the
application. | 1681 |
(I)(J) An advertisement shall not use a trade name, group | 1682 |
designation, name of the parent company of a viatical
settlement | 1683 |
licensee, name of a
particular division of the viatical | 1684 |
settlement
licensee, service mark, slogan, symbol, or
other | 1685 |
device
or
reference without disclosing the name of the viatical | 1686 |
settlement
licensee,
if either of the following applies regarding | 1687 |
the
advertisement: | 1688 |
(J)(K) An advertisement shall not use any combination of | 1696 |
words,
symbols, or physical materials that, by their content, | 1697 |
phraseology, shape, color, or other characteristics, are so | 1698 |
similar to a
combination of words, symbols, or physical materials | 1699 |
used by a
government program or agency or otherwise appear to be | 1700 |
of such a
nature that they tend to mislead prospective viators | 1701 |
into
believing that the solicitation is in some manner connected | 1702 |
with a
government program or agency. | 1703 |
(K)(L) An advertisement may state that a viatical
settlement | 1704 |
provider is licensed in the state in which the
advertisement | 1705 |
appears, provided it does not exaggerate that fact
or suggest or | 1706 |
imply that competing viatical settlement providers
may not be so | 1707 |
licensed. The advertisement may ask the audience to
consult the | 1708 |
licensee'sviatical settlement provider's web site or contact the | 1709 |
department of insurance to find
out if the state in which the | 1710 |
advertisement appears requires
licensing
and, if it does, whether | 1711 |
the viatical settlement
provider or viatical
settlement broker is | 1712 |
licensed. | 1713 |
(M)(N) All advertisements of an actual licensee shall state | 1719 |
the
name
of the actual
licensee. An advertisement
shall not use | 1720 |
a
trade name, any group
designation, name of any
affiliate or | 1721 |
controlling entity of the
licensee, service mark, slogan, symbol, | 1722 |
or other
device
in a manner that would have the capacity or | 1723 |
tendency to
mislead or
deceive as to the true identity of the | 1724 |
actual licensee or create the false impression that an
affiliate | 1725 |
or controlling entity would have any responsibility for
the | 1726 |
financial obligation of the licensee. | 1727 |
(1) Presenting, causing to be presented, or preparing with | 1756 |
knowledge or belief that it will be presented to or by a viatical | 1757 |
settlement provider, viatical settlement broker, life expectancy | 1758 |
provider, viatical
settlement
purchaser, financing entity, | 1759 |
insurer, insurance broker,
insurance
agent, or any other person, | 1760 |
any false material
information, or
concealing any material | 1761 |
information, as part of,
in support of, or
concerning a fact | 1762 |
material to, one or more of
the following: | 1763 |
(4) Recklessly entering into, negotiating, brokering, or | 1805 |
otherwise dealing in a viatical settlement contract involving a | 1806 |
life insurance policy that was obtained by presenting false, | 1807 |
deceptive, or misleading information of any fact material to the | 1808 |
policy, or by concealing
information concerning any fact material | 1809 |
to the policy, for the
purpose of misleading and with the intent | 1810 |
to defraud the issuer
of
the policy, the viatical settlement | 1811 |
provider, or the viator; | 1812 |
(5) Committing any embezzlement, theft, misappropriation, or | 1813 |
conversion of moneys, funds, premiums, credits, or other property | 1814 |
of a
viatical settlement provider, insurer, insured, viator, | 1815 |
insurance
policyowner, or any other person engaged in the business | 1816 |
of
viatical settlements or insurance; | 1817 |
(10) Entering into a premium finance agreement with any | 1832 |
person pursuant to which the person will receive, directly or | 1833 |
indirectly, any proceeds, fees, or other considerations from the | 1834 |
insurance policy, the owner of the insurance policy, or from any | 1835 |
other person with respect to the premium finance agreement or any | 1836 |
viatical settlement contract, or from any transaction related to | 1837 |
the insurance policy, that are in addition to the amount required | 1838 |
to pay the principal, interest, and service charges related to the | 1839 |
policy premiums pursuant to the premium finance agreement or | 1840 |
subsequent sale of the agreement. Any payments, charges, fees, or | 1841 |
other amounts in addition to the amounts required to pay the | 1842 |
principal, interest, and service charges related to policy | 1843 |
premiums paid under the premium finance agreement shall be | 1844 |
remitted to the original owner of the policy or, if the owner is | 1845 |
not living at the time of the determination of the overpayment, to | 1846 |
the estate of the owner. | 1847 |
(11) With respect to any viatical settlement contract or | 1848 |
insurance policy, for a viatical settlement broker or an agent | 1849 |
registered under this chapter as operating as a viatical | 1850 |
settlement broker to knowingly solicit an offer from, effectuate a | 1851 |
viatical settlement with, or make a sale to any viatical | 1852 |
settlement
provider, viatical settlement purchaser, financing | 1853 |
entity, or
related provider trust that is controlling, controlled | 1854 |
by, or
under common control with such viatical settlement broker | 1855 |
or
registered agent; | 1856 |
(12) With respect to any viatical settlement contract or | 1857 |
insurance policy, for a viatical settlement provider to knowingly | 1858 |
enter into a viatical settlement contract with a viator if, in | 1859 |
connection with such viatical settlement contract, anything of | 1860 |
value will be paid to a viatical settlement broker or an agent | 1861 |
registered under this chapter as operating as a viatical | 1862 |
settlement broker that is controlling, controlled by, or under | 1863 |
common control with such viatical settlement provider or the | 1864 |
viatical settlement purchaser, financing entity, or related | 1865 |
provider trust that is involved in such viatical settlement | 1866 |
contract; | 1867 |
(d) The NAIC, national association of securities dealers | 1925 |
(NASD)financial industry regulatory authority (FINRA),
the north | 1926 |
americanAmerican securities
amdiministratorsadministrators | 1927 |
association
(NASAA),
any employee, agent, or
representative of | 1928 |
any of those
associations., or other regulatory
body overseeing | 1929 |
life insurance,
viatical settlements, securities,
or
investment | 1930 |
fraud; | 1931 |
(2) The immunity provided in division (D)(1) of this section | 1934 |
shall not apply to any statement made with actual malice. In an | 1935 |
action brought against a person for filing a report or
furnishing | 1936 |
other information concerning a fraudulent viatical
settlement act | 1937 |
or a fraudulent insurance act, the party bringing
the action shall | 1938 |
plead specifically any allegation that the
immunity provided in | 1939 |
division (D)(1) of this section does not
apply because the person | 1940 |
filing the report or furnishing the information
did so with actual | 1941 |
malice. | 1942 |
(3) If a person is the prevailing party in a civil action
for | 1943 |
libel, slander, or any other relevant tort arising out of | 1944 |
activities in
carrying out the provisions of this chapter, if the | 1945 |
prevailing party is
a person identified in division (D)(1) of this | 1946 |
section and the
immunity described in that division applies to the | 1947 |
person, and if the party who brought the action was not | 1948 |
substantially
justified in doing so, the person who is the | 1949 |
prevailing party is
entitled to an award of attorney's fees and | 1950 |
costs arising out of
the action. However, the person is not | 1951 |
entitled to an award of attorney's fees if the person provided | 1952 |
information about the person's own fraudulent viatical settlement | 1953 |
acts. For purposes of this division,
an action is
"substantially | 1954 |
justified" if it had a reasonable
basis in law or fact at the time | 1955 |
that
it was initiated. | 1956 |
(G)(1) Viatical settlement providers and
viatical settlement | 1998 |
brokers shall adopt and have in place
antifraud initiatives | 1999 |
reasonably calculated to detect, prosecute,
and prevent | 2000 |
fraudulent
viatical settlement acts. At the discretion
of the | 2001 |
superintendent, the superintendent may order, or a licensee | 2002 |
viatical settlement provider or viatical
settlement broker may | 2003 |
request and the
superintendent may grant,
any modifications of | 2004 |
the
following
required initiatives described
in divisions | 2005 |
(G)(1)(a)
and (b) of
this section that are necessary
to ensure | 2006 |
an effective
antifraud
program. The modifications may
be more or | 2007 |
less
restrictive than
the
required initiatives so long
as the | 2008 |
modifications may
reasonably be expected to
accomplish the | 2009 |
purpose
of this section.
Antifraud initiatives
under this | 2010 |
division shall
include all of the
following: | 2011 |
(2) The superintendent, by rule adopted in accordance with | 2034 |
Chapter 119. of the Revised Code, may require that antifraud plans | 2035 |
required
under division (G)(1) of this section be submitted to the | 2036 |
superintendent. If the superintendent requires that antifraud | 2037 |
plans be submitted to the superintendent, the plans so submitted | 2038 |
are privileged and confidential, are not a public record
open for | 2039 |
inspection under section 149.43 of the
revised codeRevised Code, | 2040 |
and
are not
subject to discovery or subpoena in a civil or | 2041 |
criminal
action. | 2042 |
(H) No insurer that issued a policy being viaticated shall be | 2043 |
responsible, under this chapter, for any act or omission of a | 2044 |
viatical settlement broker or viatical
settlement provider | 2045 |
arising out of or in
connection with the
viatical settlement | 2046 |
transaction unless the
insurer receives
compensation for the | 2047 |
placement of a viatical
settlement contract
from the viatical | 2048 |
settlement provider or viatical settlement broker
in connection | 2049 |
with the viatical
settlement contract. | 2050 |
Sec. 3916.19. (A) In addition to the penalties and other | 2051 |
enforcement provisions contained in this chapter, if any person | 2052 |
violates any provision of this chapter or any rule or regulation | 2053 |
implementing any provision of this chapter that constitutes a | 2054 |
fraudulent viatical settlement act, the superintendent of | 2055 |
insurance may seek an injunction in a court of competent | 2056 |
jurisdiction and may apply for any temporary or permanent order | 2057 |
that the superintendent determines is necessary to restrain the | 2058 |
person from committing the violation. | 2059 |
(C) In addition to the penalties and other enforcement | 2067 |
provisions
contained in this chapter, any person who violates any | 2068 |
provision
of this chapter that constitutes a fraudulent viatical | 2069 |
settlement act is subject to a civil penalty of up to
ten
thousand | 2070 |
dollars per violation. Imposition of civil penalties
described in | 2071 |
this division shall be pursuant to an order of the
superintendent | 2072 |
issued under Chapter 119. of the Revised Code. The | 2073 |
superintendent's order may require a person found to be in | 2074 |
violation of this chapter to make restitution to persons aggrieved | 2075 |
by
violations of this chapter. | 2076 |
(B) Establish standards for evaluating the reasonableness of | 2091 |
payments
under
viatical settlement contracts for persons with a | 2092 |
terminal or chronic illness
or condition. This authority
includes, | 2093 |
but is not limited
to,
the regulation of discount rates
used to | 2094 |
determine the amount paid in exchange
for the assignment, | 2095 |
transfer, sale, devise, or bequest of a benefit under a
life | 2096 |
insurance policy or certificateinsuring persons with a terminal | 2097 |
or chronic illness or condition. | 2098 |
Section 2. That existing sections 3916.01, 3916.02, 3916.03, | 2111 |
3916.05, 3916.06, 3916.07, 3916.08, 3916.09, 3916.10,
3916.11, | 2112 |
3916.12, 3916.13, 3916.14, 3916.15, 3916.16, 3916.17,
3916.18, | 2113 |
3916.19, 3916.20, and 3916.99 of the Revised Code are hereby | 2114 |
repealed. | 2115 |