As Passed by the Senate

127th General Assembly Regular Session 2007-2008

Am. Sub. H. B. No. 404

Representatives Hottinger, Barrett 

Cosponsors: Representatives Koziura, Driehaus, DeBose, Fende, Celeste, Aslanides, Bacon, Batchelder, Beatty, Bolon, Boyd, Brown, Budish, Collier, DeGeeter, Dodd, Domenick, Dyer, Evans, Flowers, Foley, Garrison, Gerberry, Huffman, Hughes, Letson, Luckie, Lundy, Mallory, McGregor, J., Mecklenborg, Patton, Sayre, Schindel, Sears, Setzer, Stewart, D., Szollosi, Williams, S., Wolpert, Yates, Yuko, Zehringer 

Senators Amstutz, Stivers, Miller, D., Austria, Buehrer, Faber, Fedor, Goodman, Harris, Kearney, Morano, Mumper, Niehaus, Padgett, Sawyer, Schuler, Seitz, Spada, Jacobson, Mason 

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A BILL

To amend sections 1321.72, 1321.78, 3916.01 to

1

3916.03, 3916.05 to 3916.07, 3916.09 to 3916.20,

2

and 3916.99 and to enact sections 3911.021,

3

3916.031, 3916.171, 3916.172, and 3916.173 of the

4

Revised Code to make changes to the law

5

governing viatical settlements.

6

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

Section 1. That sections 1321.72, 1321.78, 3916.01, 3916.02,	7
3916.03, 3916.05, 3916.06, 3916.07, 3916.09, 3916.10, 3916.11,	8
3916.12, 3916.13, 3916.14, 3916.15, 3916.16, 3916.17, 3916.18,	9
3916.19, 3916.20, and 3916.99 be amended and sections 3911.021,	10
3916.031, 3916.171, 3916.172, and 3916.173 of the Revised Code be	11
enacted to read as follows:	12

Sec. 1321.72. SectionsExcept as provided in division (D)	13
of section 1321.78, sections 1321.71 to 1321.83 of the Revised	14
Code do not apply with respect to any of the following:	15

(A) Life, property, or casualty insurance companies	16
authorized to do business in this state as to policies issued by	17
those companies;	18

(B) The inclusion of a charge for insurance in connection	19
with any installment transaction pursuant to Chapter 1317. of the	20
Revised Code;	21

(C) The financing of insurance premiums at a rate of interest	22
not exceeding the maximum rate permitted by section 1343.01 of the	23
Revised Code;	24

(D) Persons lawfully doing business under the authority of	25
any law of this state, another state, or the United States	26
relating to banks, savings banks, trust companies, savings and	27
loan associations, lenders authorized to make loans pursuant to	28
sections 1321.01 to 1321.19 of the Revised Code, lenders	29
authorized to make loans pursuant to sections 1321.51 to 1321.60	30
of the Revised Code, or any credit union;	31

(E) Any person who purchases or otherwise acquires a premium	32
finance agreement from a licensee if the licensee remains	33
responsible for collecting payments due under the agreement, and	34
for otherwise servicing the agreement, in compliance with sections	35
1321.71 to 1321.83 of the Revised Code.	36

Sec. 1321.78.  (A) A premium finance agreement shall:

37

(1) Be dated, signed by the insured, and the printed portion	38
thereof shall be in at least eight-point type;	39

(2) Contain the name and place of business of the insurance	40
agent or broker negotiating the related insurance contract, the	41
name and residence or the place of business of the insured as	42
specified by him, the name and address of the premium finance	43
company, and a description of the insurance contracts involved and	44
the amount of the premium therefor;	45

(3) Set forth any charges the premium finance company elects	46
to charge under sections 1321.79, 1321.791, and 1321.80 of the	47
Revised Code.	48

(B) The premium finance company, agent, or agency shall	49
deliver to the insured or send by regular mail to the insured at	50
the address provided in the agreement, a complete copy of the	51
premium finance agreement.	52

(C) A premium finance company shall give notice of its	53
financing to the insurer not later than the thirtieth day after	54
the date on which the premium financing agreement is accepted by	55
the premium finance company. A notice given under this section	56
shall be effective whether or not the insurer's policy number is	57
set forth in the notice.	58

(D) Notwithstanding divisions (C) and (D) of section 1321.72	59
of the Revised Code, in the case of a life insurance policy, any	60
premium finance company shall give notice of its financing to the	61
insurer either prior to the issuance of the life insurance policy	62
if the financing agreement is accepted prior to the issuance of	63
the policy or prior to the completion of the premium financing	64
transaction if the financing agreement is accepted after the	65
issuance of the policy.	66

(E) If premium financing is used in connection with a life	67
insurance policy, and the premium finance company fails to	68
provide notice of its financing to the insurer pursuant to	69
division (D) of this section, the premium financing agreement is	70
unenforceable as a matter of public policy.	71

Sec. 3911.021. Any insurance company that issues life	72
insurance policies in this state shall file electronically, in a	73
format prescribed by the superintendent of insurance, on or before	74
June first of each year, a description of the measures taken by	75
the insurance company to detect and prevent stranger-originated	76
life insurance. The description shall be attested to by an officer	77
of the company. The reports shall be maintained by the	78
superintendent as confidential and not a matter of public record.	79

As used in this section, "stranger-originated life insurance"	80
has the same meaning as in section 3916.01 of the Revised Code.	81

Sec. 3916.01.  As used in this chapter:

82

(A) "Advertising" means any written, electronic, or printed	83
communication or any communication by means of recorded telephone	84
messages or transmitted on radio, television, the internet, or	85
similar communications media, including, but not limited to, film	86
strips, motion pictures, and videos, that is directly or	87
indirectly published, disseminated, circulated, or placed directly	88
or indirectly before the public in this state for the purpose of	89
creating an interest in or inducing a person to purchase or	90
sell, assign, devise, bequest, or transfer the death benefit or	91
ownership of a life insurance policy pursuant to a viatical	92
settlement contract.	93

(B) "Business of viatical settlements" means an activity	94
involved, but not limited to, in the offering, solicitation,	95
negotiation, procurement, effectuation, purchasing, investing,	96
financing, monitoring, tracking, underwriting, selling,	97
transferring, assigning, pledging, or hypothecating or in any	98
other manner acquiring an interest in a policy by means of	99
viatical settlement contracts or purchase agreements or any	100
similar activity related to viatical settlement contracts or	101
purchase agreements.	102

(C) "Chronically ill" means any of the followinghaving been	103
certified within the preceding twelve-month period by a licensed	104
health professional as:	105

(1) Being unable to perform, without substantial assistance	106
from another individual, at least two activities of daily living,	107
including, but not limited to, eating, toileting, transferring,	108
bathing, dressing, or continence for at least ninety days due to a	109
loss of functional capacity; or	110

(2) Requiring substantial supervision to protect the	111
individual from threats to health and safety due to severe	112
cognitive impairment; or	113

(3) Having a level of disability similar to that described in	114
division (C)(1) of this section, as determined under regulations	115
prescribed by the United States secretary of the treasury in	116
consultation with the United States secretary of health and human	117
services;.	118

(D) "Escrow agent" means an independent third-party person	119
who, pursuant to a written agreement signed by the viatical	120
settlement provider and viator, provides escrow services related	121
to the acquisition of a policy pursuant to a viatical settlement	122
contract. "Escrow agent" does not include any person associated	123
with, affiliated with, or under the control of a person licensed	124
under this chapter or described in division (C) of section 3916.02	125
of the Revised Code.	126

(E)(1) "Financing entity" means an underwriter, placement	127
agent, lender, purchaser of securities, purchaser of a policy or	128
certificate from a viatical settlement provider, credit enhancer,	129
or any other person that has a direct ownership interest in a	130
policy or certificate that is the subject of a viatical settlement	131
contract and to which both of the following apply:	132

(a) Its principal activity related to the transaction is	133
providing funds to effect the business of viatical settlement	134
settlements or the purchase of one or more viaticated policies.	135

(b) It has an agreement in writing with one or more licensed	136
viatical settlement providers to finance the acquisition of	137
viatical settlement contracts.	138

(2) "Financing entity" does not include a non-accredited	139
investor or viatical settlement purchaser.	140

(E) "Fraudulent viatical settlement act" means an act or	141
omission committed by any person who, knowingly or with intent to	142
defraud and for the purpose of depriving another of property or	143
for pecuniary gain, commits, or permits any of its employees or	144
agents to commit, any of the following acts:	145

(1) Presenting, causing to be presented, or preparing with	146
knowledge or belief that it will be presented to or by a viatical	147
settlement provider, viatical settlement broker, viatical	148
settlement purchaser, financing entity, insurer, insurance	149
broker, insurance agent, or any other person, any false material	150
information, or concealing any material information, as part of,	151
in support of, or concerning a fact material to, one or more of	152
the following:	153

(a) An application for the issuance of a viatical settlement	154
contract or insurance policy or certificate;	155

(b) The underwriting of a viatical settlement contract or	156
insurnace policy or certificate;	157

(c) A claim for payment or benefit pursuant to a viatical	158
settlement contract or insurnace policy or certificate;	159

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

160

(e) Any payments changes in ownership or beneficiary made in	161
accordance with the terms in viatical settlement contract or	162
insurance policy or certificate;	163

(f) The reinstatement or conversion of an insurance policy or	164
certificate;	165

(g) The solicitation, offer, effectuation, or sale of a	166
viatical settlement contract or insurance policy or certificate;	167

(h) The issuance of written evidence of a viatical settlement	168
contract or insurance policy or certificate;	169

(i) A financing transaction.

170

(2) In the furtherance of a fraud or to prevent the detection	171
of a fraud, doing any of the following:	172

(a) Removing, concealing, altering, destroying, or	173
sequestering from the superintendent the assets or records of a	174
licensee or another person engaged in the business of viatical	175
settlements;	176

(b) Misrepresenting or concealing the financial condition of	177
a licensee, financing entity, insurer, or any other person;	178

(c) Transacting the business of viatical settlements in	179
violation of any law of this state requiring a license,	180
certificate of authority, or other legal authority for the	181
transaction of the business of viatical settlements;	182

(d) Filing with the superintendent of insurance or the chief	183
insurance regulatory official of another jurisdiction a document	184
containing false information or otherwise concealing from the	185
superintendent any information about a material fact.	186

(3) Presenting, causing to be presented, or preparing with	187
knowledge or reason to believe that it will be presented, to or by	188
a viatical settlement provider, viatical settlement broker,	189
insurer, insurance agent, financing entity, viatical settlement	190
purchaser, or any other person, in connection with a viatical	191
settlement transaction or insurance transaction, an insurance	192
policy or certificate that the actor knows was fraudulently	193
obtained by the insured, the owner, or any agent of the insured or	194
owner;	195

(4) Committing any embezzlement, theft, misappropriation, or	196
conversion of moneys, funds, premiums, credits or other property	197
of a viatical settlement provider, insurer, insured, viator,	198
insurance policyowner, or any other person engaged in the business	199
of viatical settlements or insurance;	200

(5) Attempting to commit, assisting, aiding or abetting in	201
the commission of, or conspiracy to commit any act or omission	202
specified in divisions (E)(1) to (4) of this section.	203

(F) "Recklessly" has the same meaning as in section 2901.22	204
of the Revised Code.	205

(G) "Defraud" has the same meaning as in section 2913.01 of	206
the Revised Code.	207

(H) "Life expectancy" means an opinion or evaluation as to	208
how long a particular person is going to live.	209

(I) Notwithstanding section 1.59 of the Revised Code,	210
"person" means a natural person or a legal entity, including, but	211
not limited to, an individual, partnership, limited liability	212
company, limited liability partnership, association, trust,	213
business trust, or corporation.	214

(G)(J) "Policy" means an individual or group policy, group	215
certificate, or other contract, or arrangement of life insurance	216
affecting the rights of a resident of this state or bearing a	217
reasonable relation to this state, regardless of whether delivered	218
or issued for delivery in this state.	219

(H)(K) "Related provider trust" means a titling trust or any	220
other trust established by a licensed viatical settlement provider	221
or a financing entity for the sole purpose of holding ownership or	222
beneficial interest in purchased policies in connection with a	223
financing transaction, provided that the trust has a written	224
agreement with the licensed viatical settlement provider under	225
which the licensed viatical settlement provider is responsible for	226
ensuring compliance with all statutory and regulatory requirements	227
and under which the trust agrees to make all records and files	228
related to viatical settlement transactions available to the	229
superintendent of insurance as if those records and files were	230
maintained directly by the licensed viatical settlement provider.	231

(I)(L) "Special purpose entity" means a corporation,	232
partnership, trust, limited liability company or other similar	233
entity formed solely tofor one of the following purposes:	234

(i) To provide access, either directly or indirectly, to	235
institutional capital markets for a financing entity or licensed	236
viatical settlement provider;	237

(ii) In connection with a transaction in which the	238
securities in the special purpose entity are acquired by	239
qualified institutional buyers.	240

(J)(M) "Terminally ill" means certified by a physician as	241
having an illness or sicknessphysical condition that can	242
reasonably be expected to result in death in twenty-four months	243
or less.	244

(K)(N) "Viatical settlement broker" means a person that, on	245
behalf of a viator and for a fee, commission, or other valuable	246
consideration, offers or attempts to negotiate viatical	247
settlements between a viator and one or more viatical settlement	248
providers or viatical settlement brokers. "Viatical settlement	249
broker" does not include an attorney, a certified public	250
accountant, or a financial planner accredited by a nationally	251
recognized accreditation agency, who is retained to represent the	252
viator and, whose compensation is not paid directly or indirectly	253
by the viatical settlement provider or purchaser.	254

(L)(O)(1) "Viatical settlement contract" means any of the	255
following:	256

(1)(a) A written agreement establishingbetween a viator and	257
a viatical settlement provider that establishes the terms under	258
which compensation or any thinganything of value, that is less	259
than the expected death benefit of the insurance policy is or	260
certificate will be paid in return for the viator's present or	261
future assignment, transfer, sale, release, devise, or bequest	262
of the death benefit or ownership of any portion of the	263
insurance policy or certificate of insuranceany beneficial	264
interest in the policy or its ownership;	265

(2) A contract for a loan or any other financing transaction	266
secured primarily by an individual or group life insurance policy	267
or certificate, other than a loan by a life insurance company	268
pursuant to the terms of the life insurance contract or a loan	269
secured by the cash value of a policy or certificate;	270

(3) An agreement to transfer ownership or change the	271
beneficiary designation of the policy or certificate at a later	272
date, regardless of the date that compensation is paid to the	273
viator(b) The transfer or acquisition for compensation or	274
anything of value for ownership or beneficial interest in a trust	275
or an interest in another person that owns such a policy if the	276
trust or other person was formed or availed of for the principal	277
purpose of acquiring one or more life insurance policies;	278

(c) A premium finance loan made for a policy by a lender to	279
a viator on, before, or after the date of issuance of the policy	280
in either of the following situations:	281

(i) The viator or the insured receives a guarantee of the	282
viatical settlement value of the policy.	283

(ii) The viator or the insured agrees on, before, or after	284
the issuance of the policy to sell the policy or any portion of	285
the policy's death benefit.	286

(2) "Viatical settlement contracts" include but are not	287
limited to contracts that are commonly termed "life settlement	288
contracts" and "senior settlement contracts."	289

(3) "Viatical settlement contract" does not include any of	290
the following unless part of a plan, scheme, device, or artifice	291
to avoid the application of this chapter:	292

(a) A policy loan or accelerated death benefit made by the	293
insurer pursuant to the policy's terms whether issued with the	294
original policy or a rider;	295

(b) Loan proceeds that are used solely to pay premiums for	296
the policy and the costs of the loan including interest,	297
arrangement fees, utilization fees and similar fees, closing	298
costs, legal fees and expenses, trustee fees and expenses, and	299
third-party collateral provider fees and expenses, including fees	300
payable to letter of credit issuers;	301

(c) A loan made by a regulated financial institution in which	302
the lender takes an interest in a policy solely to secure	303
repayment of a loan or, if there is a default on the loan and the	304
policy is transferred, the transfer of such a policy by the	305
lender, provided that neither the default itself nor the transfer	306
is pursuant to an agreement or understanding with any other	307
person for the purpose of evading regulation under this chapter;	308

(d) A premium finance loan made by a lender that does not	309
violate sections 1321.71 to 1321.83 of the Revised Code, if the	310
premium finance loan is not described in division (O)(1)(c) of	311
this section;	312

(e) An agreement where all parties are closely related to the	313
insured by blood or law or have a lawful substantial economic	314
interest in the continued life, health, and bodily safety of the	315
person insured, or are persons or trusts established primarily for	316
the benefit of such parties;	317

(f) Any designation, consent, or agreement by an insured who	318
is an employee of an employer in connection with the purchase by	319
the employer, or trust established by the employer, of life	320
insurance on the life of the employee as described in section	321
3911.091 of the Revised Code;	322

(g) Any business succession planning arrangement including,	323
but not limited to all of the following if the arrangements are	324
bona fide arrangements:	325

(i) An arrangement between one or more shareholders in a	326
corporation or between a corporation and one or more of its	327
shareholders or one or more persons or trusts established by its	328
shareholders;	329

(ii) An arrangement between one or more partners in a	330
partnership or between a partnership and one or more of its	331
partners or one or more trusts established by its partners;	332

(iii) An arrangement between one or more members in a limited	333
liability company or between a limited liability company and one	334
or more of its members or one or more trusts established by its	335
members.	336

(h) An agreement entered into by a service recipient, a trust	337
established by the service recipient and a service provider, or a	338
trust established by the service provider who performs significant	339
services for the service recipient's trade or business;	340

(i) An arrangement or agreement with a special purpose	341
entity;	342

(j) Any other contract, transaction, or arrangement exempted	343
from the definition of viatical settlement contract by rule	344
adopted by the superintendent based on the superintendent's	345
determination that the contract, transaction, or arrangement is	346
not of the type regulated by this chapter.	347

(M)(P)(1) "Viatical settlement provider" means a person,	348
other than a viator, that enters into or effectuates a viatical	349
settlement contract.	350

(2) "Viatical settlement provider" does not include any of	351
the following:	352

(a) A bank, savings bank, savings and loan association,	353
credit union, or other regulated financial institution that takes	354
an assignment of a policy solely as a collateral for a loan;	355

(b) A premium finance company exempted under section 1321.72	356
of the Revised Code from the licensure requirements of section	357
3921.73 of the Revised Code that takes an assignment of a life	358
insurance policy or certificatesolely as collateral for a premium	359
finance loan;	360

(b)(c) The issuer of a life insurance policy or certificate	361
providing accelerated benefits as defined in section 3915.21 of	362
the Revised Code and pursuant to the contract;	363

(c)(d) An individual who enters into or effectuates not more	364
than one agreementviatical settlement contract in any calendar	365
year for the transfer of life insurance policies or certificates	366
for any value less than the expected death benefit;	367

(d)(e) An authorized or eligible insurer that provides stop	368
loss coverage or financial guarantee insurance to a viatical	369
settlement provider, purchaser, financing entity, special purpose	370
entity, or related provider trust;	371

(e)(f) A financing entity;

372

(f)(g) A special purpose entity;

373

(g)(h) A related provider trust;

374

(h)(i) A viatical settlement purchaser;

375

(j) Any other person the superintendent determines is not	376
consistent with the definition of viatical settlement provider.	377

(N)(Q) "Viaticated policy" means a life insurance policy or	378
certificate that has been acquired by a viatical settlement	379
provider pursuant to a viatical settlement contract.	380

(O)(R) "Viator" means the owner of a life insurance policy or	381
a certificate holder under a group policy that has not previously	382
been viaticated who, in return for compensation or any thing	383
anything of value that is less than the expected death benefit of	384
the policy or certificate, assigns, transfers, sells, releases,	385
devises, or bequests the death benefit or ownership of any	386
portion of the insurance policy or certificate of insurance. For	387
the purposes of this chapter, a "viator" is not limited to an	388
owner of a life insurance policy or a certificate holder under a	389
group policy insuring the life of an individual with a terminal	390
or chronic illness or conditionwho is terminally or chronically	391
ill except where specifically addressed. "Viator" does not	392
include any of the following:	393

(1) A licensee under this chapter;

394

(2) An accredited investor orA qualified institutional buyer	395
as defined respectively in Regulation D, Rule 501 or Rule 144A of	396
the Securities Act of 1933, as amended;	397

(3) A financing entity;

398

(4) A special purpose entity;

399

(5) A related provider trust.

400

(P)(S) "Viatical settlement purchaser" means a person who	401
givesprovides a sum of money as consideration for a life	402
insurance policy or an interest in the death benefits of a life	403
insurance policy from a viatical settlement provider that is the	404
subject of a viatical settlement contract, or a person who owns,	405
acquires, or is entitled to a beneficial interest in a trust or	406
person that owns a viatical settlement contract or is the	407
beneficiary of a life insurance policy that has been or will be	408
is the subject of a viatical settlement contract, for the purpose	409
of deriving an economic benefit. "Viatical settlement purchaser"	410
does not include any of the following:	411

(1) A licensee under this chapter;

412

(2) An accredited investor orA qualified institutional buyer	413
as defined respectively in Regulation D, Rule 501 or Rule 144A of	414
the Securities Act of 1933, as amended;	415

(3) A financing entity;

416

(4) A special purpose entity;

417

(5) A related provider trust.

418

(Q)(T) "Qualified institutional buyer" has the same meaning	419
as in 17 C.F.R. 230.144A as that regulation exists on the	420
effective date of this amendment.	421

(U) "Licensee" means a person licensed as a viatical	422
settlement provider or viatical settlement broker under this	423
chapter.	424

(R)(V) "NAIC" means the national association of insurance	425
commissioners.	426

(S) "Securities Act of 1933" has the same meaning as in	427
section 1707.01 of the Revised Code(X) "Regulated financial	428
institution" means a bank, a savings association, or credit union	429
operating under authority granted by the superintendent of	430
financial institutions, the regulatory authority of any other	431
state of the United States, the office of thrift supervision, the	432
national credit union administration, or the office of the	433
comptroller of the currency.	434

(W)(1) "Stranger-originated life insurance," or "STOLI,"	435
means a practice, arrangement, or agreement initiated at or prior	436
to the issuance of a policy that includes both of the following:	437

(a) The purchase or acquisition of a policy primarily	438
benefiting one or more persons who, at the time of issuance of the	439
policy, lack insurable interest in the person insured under the	440
policy;	441

(b) The transfer at any time of the legal or beneficial	442
ownership of the policy or benefits of the policy or both, in	443
whole or in part, including through an assumption or forgiveness	444
of a loan to fund premiums.	445

(2) "Stranger-originated life insurance" also includes trusts	446
or other persons that are created to give the appearance of	447
insurable interest and are used to initiate one or more policies	448
for investors but violate insurable interest laws and the	449
prohibition against wagering on life.	450

(3) "Stranger-originated life insurance" does not include	451
viatical settlement transactions specifically described in	452
division (O)(3) of this section.	453

Sec. 3916.02. No(A) Notwithstanding division (C) of this	454
section, no person shall operate in this state as a viatical	455
settlement provider or viatical settlement broker without first	456
having obtained a license from the superintendent of insurance	457
and, if different fromthe owner of the policy to be viaticated	458
is not a resident of this state, from the comparable official of	459
the state of residence of the viatorowner if that state issues	460
licenses for viatical settlement providers or viatical settlement	461
brokers. If	462

(B)(1) If there is more than one viatorowner on a single	463
policy or certificate and the viatorsowners are residents of	464
different states, the viatical settlement contract shall be	465
governed by the law of the state in which the viatorowner	466
having the largest percentage ownership of the policy or	467
certificate resides or, if the viatorsowners hold equal	468
ownership, the state of residence of one viatorowner agreed	469
upon in writing by all viatorsowners.	470

(2) If the viator is a resident of this state, all agreements	471
to be signed by the viator shall provide exclusive jurisdiction to	472
courts of this state and the laws of this state shall govern the	473
agreements. Nothing in the agreements shall abrogate the viator's	474
right to a trial by jury.	475

(C)(1) A person who represents the viator and is not	476
compensated directly or indirectly by the viatical settlement	477
provider or viatical settlement purchaser, who is licensed as an	478
attorney, certified public accountant, or financial planner	479
accredited by a nationally recognized accreditation agency may	480
negotiate viatical settlement contracts on behalf of a viator	481
without obtaining a license pursuant to division (A) of this	482
section.	483

(2) An individual insurance agent, in good standing, who has	484
been licensed as a resident or nonresident insurance agent with a	485
life line of authority in this state for at least five years may	486
operate as a viatical settlement broker without obtaining a	487
license pursuant to division (A) of this section if the viatical	488
settlement broker activities of the insurance agent are	489
incidental to the insurance agent's insurance business	490
activities.	491

Sec. 3916.03.  (A) An applicant for a license as a viatical	492
settlement provider or viatical settlement broker shall submit an	493
application for the license in a manner prescribed by the	494
superintendent of insurance. The application shall be accompanied	495
by a fee established by the superintendent by rule adopted in	496
accordance with chapterChapter 119. of the Revised Code.	497

(B) A license issued under this chapter to a person other	498
than an individual authorizes all partners, officers, members, or	499
designated employees of the person to act as viatical settlement	500
providers or viatical settlement brokers, as applicable, and all	501
those partners, officers, members, or designated employees shall	502
be named in the application and any supplements to the	503
application.	504

(C) Upon the filing of an application under this section and	505
the payment of the license fee, the superintendent shall make an	506
investigation of the applicant and issue to the applicant a	507
license that states in substance that the person is authorized to	508
act as a viatical settlement provider or viatical settlement	509
broker, as applicable, if all of the following apply:	510

(1) Regarding an application for a license as a viatical	511
settlement provider, the applicant provides aall of the	512
following:	513

(a) A detailed plan of operation;

514

(b) Proof of financial responsibility pursuant to division	515
(D) of this section;	516

(c) A general description of the method the applicant will	517
use to determine life expectancies, including a description of the	518
applicant's intended receipt of life expectancies, the applicant's	519
intended use of life expectancies, the applicant's intended use of	520
life expectancy providers, and a written plan of policies and	521
procedures used to determine life expectancies.	522

(2) The superintendent finds all of the following:

523

(a) The applicant is competent and trustworthy and intends to	524
act in good faith in the capacity of a viatical settlement	525
provider or viatical settlement broker, as applicable.	526

(b) The applicant has a good business reputation and has had	527
experience, training, or education so as to be qualified to act in	528
the capacity of a viatical settlement provider or viatical	529
settlement broker, as applicable.	530

(3) If the applicant is a person other than an individual,	531
the applicant provides a certificate of good standing from the	532
state of its domicileorganization.	533

(4) The applicant provides an antifraud plan that meets the	534
requirements of division (G) of section 3916.18 of the Revised	535
Code.	536

(D)(1) An applicant for licensure as a viatical settlement	537
provider may provide proof of financial responsibility through one	538
of the following means:	539

(a) Submitting audited financial statements that show a	540
minimum equity of not less than two hundred fifty thousand dollars	541
in cash or cash equivalents;	542

(b) Submitting both audited annual financial statements that	543
show positive equity and either of the following:	544

(i) A surety bond in the amount of two hundred fifty thousand	545
dollars in favor of this state issued by an insurer authorized to	546
issue surety bonds in this state;	547

(ii) An unconditional and irrevocable letter of credit,	548
deposit of cash, or securities, in any combination, in the	549
aggregate amount of two hundred fifty thousand dollars.	550

(2) If an applicant is licensed as a viatical settlement	551
provider in another state, the superintendent may accept as valid	552
any similar proof of financial responsibility the applicant	553
filed in that state.	554

(3) The superintendent may request proof of financial	555
responsibility at any time the superintendent considers necessary.	556

(E) An applicant shall provide all information requested by	557
the superintendent. The superintendent may, at any time, require	558
an applicant to fully disclose the identity of all stockholders	559
shareholders, partners, officers, members, and employees, and may,	560
in the exercise of the superintendent's discretion, refuse to	561
issue a license to an applicant that is not an individual if the	562
superintendent is not satisfied that each officer, employee,	563
stockholdershareholder, partner, or member who may materially	564
influence the applicant's conduct meets the standards set forth in	565
this chapter.	566

(E)(F) Except as otherwise provided in this division, a	567
license as a viatical settlement provider or viatical settlement	568
broker expires on the last day of March next after its issuance	569
or continuance. A license as a viatical settlement provider or	570
viatical settlement broker may, in the discretion of the	571
superintendent and the payment of an annual renewal fee	572
established by the superintendent by rule adopted in accordance	573
with chapterChapter 119. of the Revised Code, be continued past	574
the last day of March next after its issue and after the last day	575
of March in each succeeding year. Failure to pay the renewal fee	576
by the required date results in the expiration of the license.	577

(F)(G) Any individual licensed as a viatical settlement	578
broker shall complete not less than fifteen hours of continuing	579
education biennially. The superintendent shall approve continuing	580
education courses that shall be related to viatical settlements	581
and viatical settlement transactions. The superintendent shall	582
adopt rules for the enforcement of this division.	583

(H) The superintendent shall not issue a license to a	584
nonresident applicant, unless either of the following applies:	585

(1) The applicant files and maintains a written designation	586
of an agent for service of process with the superintendent.	587

(2) The applicant has filed with the superintendent the	588
applicant's written irrevocable consent that any action against	589
the applicant may be commenced against the applicant by service of	590
process on the superintendent.	591

(G)(I) A viatical settlement provider or viatical settlement	592
broker shall provide to the superintendent new or revised	593
information regarding any change in its officers, any shareholder	594
owning ten per cent or more of its stockholdersvoting	595
securities, or its partners, directors, members, or designated	596
employees within thirty days of the change.	597

(H)(J) Any fee collected under this section shall be paid	598
into the state treasury to the credit of the department of	599
insurance operating fund created by section 3901.021 of the	600
Revised Code.	601

Sec. 3916.031. Any corporation, partnership, or other	602
business that is licensed as a viatical settlement broker shall	603
maintain at least one designated individual who is individually	604
licensed as a viatical settlement broker to be responsible for the	605
licensee's compliance with this chapter.	606

Sec. 3916.05.  (A) A person shall not use a viatical	607
settlement contract form or provide a disclosure statement form to	608
a viator in this state unless the viatical settlement contract	609
form or the disclosure statement form is filed with and approved	610
by the superintendent of insurance. The superintendent shall	611
disapprove a viatical settlement contract form or a disclosure	612
statement form if, in the superintendent's opinion, the viatical	613
settlement contract form, the disclosure statement form, or any	614
provision contained therein fails to meet the requirements of	615
section 3916.06 of the Revised Code, is unreasonable, is contrary	616
to the interests of the public, or is otherwise misleading or	617
unfair to the viator. At the superintendent's discretion, the	618
superintendent may require the submission of advertising material	619
to which section 3916.17 of the Revised Code applies. If not	620
disapproved by the superintendent, a filing made pursuant to this	621
section shall be considered approved forty-five days after the	622
contract form, disclosure form, or advertising material is filed.	623

(B) Any insurance company that issues life insurance	624
policies in this state shall include questions in its life	625
insurance applications that are reasonably structured to	626
identify and prevent stranger-originated life insurance. The	627
superintendent shall adopt rules under Chapter 119. of the	628
Revised Code for the implementation of this section. Each insurer	629
shall file with the superintendent copies of its amended	630
applications for life insurance within twelve months following	631
the effective date of the superintendent's adoption of rules	632
pursuant to this division.	633

(C) The superintendent may adopt rules in accordance with	634
Chapter 119. of the Revised Code to establish reasonable fees for	635
any service or transaction performed by the department of	636
insurance pursuant to division (A) of this section. Any fee	637
collected pursuant to those rules shall be paid into the state	638
treasury to the credit of the department of insurance operating	639
fund created by section 3901.021 of the Revised Code.	640

Sec. 3916.06.  (A)(1) With each application for a viatical	641
settlement, a viatical settlement provider or viatical settlement	642
broker shall disclose at least the following to a viator no later	643
than the time all parties sign the application for the viatical	644
settlement contract:	645

(a) That there are possible alternatives to viatical	646
settlement contracts, including any accelerated death benefits	647
offered under the viator's life insurance policy or certificate;	648

(b) That some or all of the proceeds of the viatical	649
settlement may be subject to federal income taxation and state	650
franchise and income taxation, and that assistance should be	651
sought from a professional tax advisor;	652

(c) That the proceeds of the viatical settlement could be	653
subject to the claims of creditors;	654

(d) That receipt of the proceeds of the viatical settlement	655
may adversely affect the viator's eligibility for medical	656
assistance under Chapter 5111. of the Revised Code or other	657
government benefits or entitlements, and that advice should be	658
obtained from the appropriate government agencies;	659

(e) That the viator has a right to rescind the viatical	660
settlement contract for at least fifteen calendar days after the	661
viator receives the viatical settlement proceeds, as provided in	662
section 3916.08 of the Revised Code,. If the insured dies during	663
the rescission period, the viatical settlement contract shall be	664
deemed to have been rescinded, subject to repayment of all	665
viatical settlement proceeds to the viatical settlement company.	666

(f) That funds will be sent to the viator within three	667
business days after the viatical settlement provider has received	668
written acknowledgment from the insurer or group administrator	669
that ownership of the policy or interest in the certificate has	670
been transferred and that the beneficiary has been designated	671
pursuant to the viatical settlement contract;	672

(g) That entering into a viatical settlement contract may	673
cause other rights or benefits, including conversion rights and	674
waiver of premium benefits that may exist under the policy or	675
certificate, to be forfeited by the viator and that assistance	676
should be sought from a financial advisor.	677

(h) That following execution of the viatical settlement	678
contract, the viatical settlement provider or the authorized	679
representative of the viatical settlement provider may contact	680
the insured for the purpose of determining the insured's health	681
status and to confirm the insured's residential or business	682
address and telephone number or for other purposes permitted by	683
law. Any such contact shall be limited to once in any	684
three-month period if the insured has a life expectancy of more	685
than one year or to once per month if the insured has a life	686
expectancy of one year or less.	687

(2) The viatical settlement provider or viatical settlement	688
broker shall provide the disclosures under division (A)(1) of	689
this section in a separate document that is signed by the viator	690
and the viatical settlement provider or viatical settlement	691
broker.	692

(3) Disclosure to a viator under division (A)(1) of this	693
section shall include distribution of a brochure describing the	694
process of viatical settlements. The viatical settlement provider	695
or viatical settlement broker shall use the NAIC's form for the	696
brochure unless oneanother form is developed or approved by the	697
superintendent.	698

(4) The disclosure document under division (A)(1) of this	699
section shall contain the following language:	700

"All medical, financial, or personal information solicited or	701
obtained by a viatical settlement provider or viatical settlement	702
broker about an insured, including the insured's identity or the	703
identity of family members, a spouse, or a significant other may	704
be disclosed as necessary to effect the viatical settlement	705
between the viator and the viatical settlement provider. If you	706
are asked to provide this information, you will be asked to	707
consent to the disclosure. The information may be provided to	708
someone who buys the policy or provides funds for the purchase.	709
You may be asked to renew your permission to share information	710
every two years."	711

(B)(1) A viatical settlement provider shall disclose at	712
least the following to a viator prior to the date the viatical	713
settlement contract is signed by all the necessary parties:	714

(a) The affiliation, if any, between the viatical settlement	715
provider and the issuer of the insurance policy or certificate to	716
be viaticated;	717

(b) The name, business address, and telephone number of the	718
viatical settlement provider;	719

(c) Regarding a viatical settlement broker, the amount and	720
method of calculating the broker's compensation. As used in this	721
division, "compensation" includes anything of value paid or given	722
to a viatical settlement broker for the placement of a policy or	723
certificate.	724

(d) Any affiliations or contractual arrangements between the	725
viatical settlement provider and the viatical settlement broker;	726

(d)(e) If an insurancea policy or certificate to be	727
viaticated has been issued as a joint policy or certificate or	728
involves family riders or any coverage of a life other than the	729
insured under the policy or certificate to be viaticated, the	730
possible loss of coverage on the other lives under the policy or	731
certificate and that advice should be sought from the viator's	732
insurance produceragent or the company issuing the policy or	733
certificate;	734

(e)(f) The dollar amount of the current death benefit payable	735
to the viatical settlement provider under the policy or	736
certificate, and, if known, the availability of any additional	737
guaranteed insurance benefits, the dollar amount of any	738
accidental death and dismemberment benefits under the policy or	739
certificate, and the viatical settlement provider'sextent to	740
which the viator's interest in those benefits will be	741
transferred as a result of the viatical settlement contract.	742

(f) The name, business address, and telephone number of the	743
independent third-party escrow agent, and the fact that the	744
viator or owner may inspect or receive copies of the relevant	745
escrow or trust agreements or documents(g) That an escrow agent	746
shall provide escrow services to the parties pursuant to a written	747
agreement, signed by the viatical settlement provider, the	748
viatical settlement broker, and the viator. At the close of	749
escrow, the escrow agent will distribute the proceeds of the sale	750
to the viator, minus any compensation to be paid to any other	751
persons who provided services and to whom the viator has agreed to	752
compensate out of the gross amount offered by the viatical	753
settlement purchaser. All persons receiving any form of	754
compensation under the escrow agreement shall be clearly	755
identified, including name, business address, telephone number,	756
and tax identification number.	757

(2) The viatical settlement broker shall disclose at least	758
the following to a viator prior to the execution of the viatical	759
settlement contract:	760

(a) The name, business address, and telephone number of the	761
viatical settlement broker;	762

(b) A full, complete, and accurate description of all offers,	763
counteroffers, acceptances, and rejections relating to the	764
proposed viatical settlement contract;	765

(c) Any affiliations or contractual agreements between the	766
viatical settlement broker and any person making an offer in	767
connection with the proposed viatical settlement contract;	768

(d) The amount and method of calculating the viatical	769
settlement broker's compensation and, if any portion of the	770
viatical settlement broker's compensation is taken from the	771
viatical settlement offer, the total amount of the viatical	772
settlement offer and the viatical settlement broker's	773
compensation as a percentage of that total. As used in this	774
division, "compensation" includes anything of value paid or given	775
to a viatical settlement broker related to the settlement of a	776
policy.	777

(3) The viatical settlement provider or viatical	778
settlement broker shall conspicuously display the disclosures	779
required under divisiondivisions (B)(1) and (2) of this section	780
in the viatical settlement contract or in a separate document	781
signed by the viator and the viatical settlement provider or	782
viatical settlement broker, as appropriate.	783

(C) If the viatical settlement provider transfers ownership	784
or changes the beneficiary of the insurance policy or	785
certificate, the viatical settlement provider shall communicate	786
in writing the change in ownership or beneficiary to the insured	787
within twenty days after the change.	788

Sec. 3916.07.  (A) A viatical settlement provider entering	789
into a viatical settlement contract shall first obtain all of the	790
following:	791

(1) If the viator is the insured, a written statement from an	792
attending physician that the viator is of sound mind and under no	793
constraint or undue influence to enter into a viatical settlement	794
contract. As used in this division, "physician" means a person	795
authorized under Chapter 4731. of the Revised Code to practice	796
medicine and surgery or osteopathic medicine and surgery.	797

(2) A document in which the insured consents in writing, as	798
required by division (E) of section 3916.13 of the Revised Code,	799
to the release of the insured's medical records to a viatical	800
settlement provider or viatical settlement broker and to the	801
insurance company that issued the life insurance policy or	802
certificate covering the life of the insured.	803

(B) Within twenty days after a viator executes documents	804
necessary to transfer any rights under an insurancea policy or	805
certificate or within twenty days of entering any expressed or	806
implied agreement, option, promise, or other form of understanding	807
to viaticate the policy, the viatical settlement provider shall	808
give written notice to the insurer that issued that insurance	809
policy or certificate that the policy or certificate has or will	810
become a viaticated policy or certificate. The notice shall be	811
accompanied by the documents required by division (C) of this	812
section.	813

(C) The viatical settlement provider shall deliver a copy of	814
the medical release required under division (A)(2) of this	815
section, a copy of the viator's application for the viatical	816
settlement contract, the notice required under division (B) of	817
this section, and a request for verification of coverage to the	818
insurer that issued the life insurance policy or certificate that	819
is the subject of the viatical transaction. The viatical	820
settlement provider shall use the NAIC's form for verification of	821
coverage unless standards for verification areanother form is	822
developed or approved by the superintendent of insurance.	823

(D) The insurer shall respond to a request for verification	824
of coverage submitted on an approved form by a viatical	825
settlement provider or viatical settlement broker within thirty	826
calendar days after the date the request is received and shall	827
indicate whether, based on the medical evidence and documents	828
provided, the insurer intends to pursue an investigation at that	829
time regarding possible fraud or the validity of the life	830
insurance contract or certificatepolicy that is the subject of	831
the request. The insurer shall accept an original or facsimile	832
or electronic copy of such request and any accompanying	833
authorization signed by the viator.	834

(E) Prior to or at the time of execution of the viatical	835
settlement contract, the viatical settlement provider shall	836
obtain a witnessed document in which the viator consents to the	837
viatical settlement contract, represents that the viator has a	838
full and complete understanding of the viatical settlement	839
contract and a full and complete understanding of the benefits of	840
the life insurance policy or certificate, and acknowledges that	841
the viator is entering into the viatical settlement contract	842
freely and voluntarily and, for persons with a terminal or chronic	843
illness or conditionwho are terminally or chronically ill,	844
acknowledges that the insured has a terminal or chronic illnessis	845
terminally or chronically ill and that the terminal or chronic	846
illness or condition was diagnosed after the life insurance policy	847
or certificate was issued.	848

(F) If a viatical settlement broker performs any of the	849
activities specified in this section on behalf of the viatical	850
settlement provider, the viatical settlement provider is deemed	851
to have fulfilled the requirements of this section.	852

(G) All medical information solicited or obtained by any	853
licensee shall be subject to the applicable provisions of state	854
law relating to confidentiality of medical information.	855

Sec. 3916.09.  (A) The viatical settlement provider shall	856
instruct the viator to send the executed documents required to	857
effect the change in ownership, assignment, or change in	858
beneficiary directly to the independent escrow agent. Within three	859
business days after the date the escrow agent receives the	860
documents, or from the date the viatical settlement provider	861
receives the documents if the viator erroneously provides the	862
documents directly to the viatical settlement provider, the	863
viatical settlement provider shall pay or transfer the proceeds of	864
gross amount to be paid by the viatical settlement provider to an	865
the escrow oragent for deposit in a trust or escrow account set	866
up for that purpose by the escrow agent in a state or federally	867
charteredregulated financial institution whose deposits are	868
insured by the federal deposit insurance corporation. Upon	869
payment of the settlement proceeds into the escrow or trust	870
account, the escrow agent or trustee shall deliver the original	871
change in ownership, assignment, or change in beneficiary forms	872
to the viatical settlement provider, a representative of the	873
viatical settlement provider, or related provider trust. Upon the	874
licensed provider'sescrow agent's receipt of the acknowledgment	875
of the properly completed transfer of ownership, assignment, or	876
designation of beneficiary from the insurance company, the	877
licensed providerescrow agent shall instruct the escrow agent to	878
pay the settlement proceeds to the viator and any other person	879
pursuant to the viatical settlement contract and the escrow	880
agreement. The escrow agent shall make payment within three	881
business days of the date the providerescrow agent received the	882
acknowledged forms from the insurance company. Funds are	883
considered sent to a viator as of the date that the escrow	884
agent either releases the funds for wire transfer to the viator	885
or places a check for delivery to the viator via United States	886
postal service or other nationally recognized delivery service.	887

(B) Failure to transfer the proceeds to the viator within the	888
period of time disclosed pursuant to division (A)(1)(f) of section	889
3916.06 of the Revised Code renders the viatical settlement	890
contract voidable by the viator for lack of consideration until	891
the time consideration is tendered to and accepted by the viator.	892
If a viatical settlement contract is voided by the viator pursuant	893
to this division, ownership of the insurance policy or certificate	894
reverts to the viator or to the viator's estate if the viator is	895
deceased, irrespective of any transfer of ownership of the policy	896
or certificate by the viator, viatical settlement provider, or	897
any other person.	898

Sec. 3916.10.  After a viatical settlement has occurred,	899
contact with the insured for the purpose of determining the health	900
status of the insured by the viatical settlement provider or	901
viatical settlement broker shall be made only by the viatical	902
settlement provider or broker licensed in this state, or the	903
authorized representative of the viatical settlement provider.	904
The viatical settlement provider or viatical settlement broker,	905
or authorized representative shall not contact the insured for	906
the purpose of determining the insured's health status more than	907
once every three months if the insured has a life expectancy of	908
more than one year, or more than once per month if the insured	909
has a life expectancy of one year or less. The viatical	910
settlement provider or viatical settlement broker shall explain	911
the procedure for making these contacts at the time the viatical	912
settlement contract is entered into.	913

The limitations set forth in this section do not apply to	914
contacts made with an insured under a viaticated policy for	915
purposes other than to determine the insured's health status.	916

Viatical settlement providers and viatical settlement	917
brokers are responsible for the actions of their authorized	918
representatives, for the purposes of this section except viatical	919
settlement providers are not responsible for the actions of	920
subsequent purchasers of a policy.	921

Sec. 3916.11.  (A)(1) A licensee under this chapter shall,	922
for five years, retain copies of all of the following:	923

(a) All proposed, offered, or executed contracts, purchase	924
agreements, underwriting documents, policy forms, and applications	925
from the date of the proposal, offer, or execution of the contract	926
or purchase agreement, whichever is later;	927

(b) All checks, drafts, or other evidence and documentation	928
related to the payment, transfer, deposit, or release of funds	929
from the date of the transaction;	930

(c) All other records and documents related to the	931
requirements of this chapter.	932

(2) This section does not relieve a person of the obligation	933
to produce the documents described in division (A)(1) of this	934
section to the superintendent of insurance after the retention	935
period specified in that division has expired if the person has	936
retained the documents.	937

(3) Records required to be retained by this section must be	938
legible and complete and may be retained in paper, photograph,	939
microprocess, magnetic, mechanical, or electronic media, or by any	940
process that accurately reproduces or forms a durable medium for	941
the reproduction of a record.	942

(4) If a licensee fails to comply with division (A) of this	943
section, the superintendent may initiate proceedings in accordance	944
with Chapter 119. of the Revised Code to revoke, suspend, or	945
refuse to renew the license of the licensee.	946

(B)(1) Upon determining that an examination should be	947
conducted, subject to division (E) of this section, the	948
superintendent shall appoint one or more examiners to perform the	949
examination and instruct them as to the scope of the examination.	950
The superintendent may employ any guidelines or procedures for	951
purposes of this division that the superintendent considers	952
appropriate.	953

(2) Every licensee, or person from whom information is	954
sought, and all officers, directors, employees, and agents of	955
any licensee, or person from whom information is sought, shall	956
provide to the examiners timely, convenient, and free access at	957
all reasonable hours at the licensee's or person's offices to all	958
books, records, accounts, papers, documents, assets, and computer	959
or other recordings relating to the property, assets, business,	960
and affairs of the licensee being examined. The officers,	961
directors, employees, and agents of the licensee or person shall	962
facilitate the examination and aid in the examination so far as	963
it is in their power to do so.	964

The refusal of a licensee, by its officers, directors,	965
employees, or agents, to submit to examination or to comply with	966
any reasonable written request of the superintendent shall be	967
grounds for suspension, revocation, denial of issuance, or	968
nonrenewal of any license or authority held by the licensee to	969
engage in the business of viatical settlement business	970
settlements or other business subject to the superintendent's	971
jurisdiction. Any proceedings for suspension, revocation, denial,	972
or nonrenewal ofrefusal to renew any license or authority isare	973
subject to chapterChapter 119. of the Revised Code.	974

(3) The superintendent has the power to issue subpoenas, to	975
administer oaths, and to examine under oath any person as to any	976
matter pertinent to the examination. Upon the failure or refusal	977
of a person to obey a subpoena, the superintendent may petition a	978
court of competent jurisdiction, and, upon proper showing, the	979
court may enter an order compelling the witness to appear and	980
testify or produce documentary evidence. Failure to obey the court	981
order shall be punishable as contempt of court.	982

(4) When making an examination under this chapter, the	983
superintendent may retain attorneys, appraisers, independent	984
actuaries, independent certified public accountants, or other	985
professionals and specialists as examiners, and the licensee that	986
is the subject of the examination shall bear the cost of those	987
examiners pursuant to division (F) of this section. Examiners who	988
are appointed by the superintendent, but who are not employees of	989
the department of insurance, shall be compensated for their work,	990
travel, and living expenses at reasonable and customary rates.	991

(5) Nothing contained in this chapter limits the	992
superintendent's authority to terminate or suspend an examination	993
in order to pursue other legal or regulatory action pursuant to	994
the insurance laws of this state. Findings of fact and conclusions	995
made pursuant to any examination shall be prima-facie evidence in	996
any legal or regulatory action.	997

(6) Nothing contained in this chapter limits the	998
superintendent's authority to use and, if appropriate, to make	999
public any final or preliminary examination report, any examiner	1000
or licensee working papers or other documents, or any other	1001
information discovered or developed during the course of any	1002
examination in the furtherance of any legal or regulatory action	1003
that the superintendent, in the superintendent's sole	1004
discretion, considers appropriate.	1005

(C)(1) Examination reports shall be comprised of only facts	1006
appearing upon the books, records, or other documents of the	1007
licensee, its agents, or other persons examined, or as ascertained	1008
from the testimony of its officers, agents, or other persons	1009
examined concerning its affairs, and the conclusions and	1010
recommendations that the examiners find reasonably warranted from	1011
the facts.	1012

(2) Upon completion of the examination, the examiner in	1013
charge shall file with the superintendent a verified written	1014
report of examination. Upon receipt of the verified report, the	1015
superintendent shall transmit the report to the licensee examined,	1016
together with a notice that shall afford the licensee examined a	1017
reasonable opportunity of not more than thirty days from receipt	1018
of the report to make a written submission or rebuttal with	1019
respect to any matters contained in the examination report.	1020

(3) If the superintendent determines that regulatory action	1021
is appropriate as a result of an examination, the superintendent	1022
may initiate any proceedings or actions provided by law.	1023

(D)(1) Names and individual identification data for all	1024
viators shall be considered private and confidential information	1025
and shall not be disclosed by the superintendent, unless required	1026
by law.	1027

(2) Except as otherwise provided in this chapter or in the	1028
law of another state or jurisdiction that is substantially similar	1029
to this chapter, all examination reports, working papers, recorded	1030
information, documents, and copies of those reports, papers,	1031
information, documents, and copies produced by, obtained by, or	1032
disclosed to the superintendent or to any other person in the	1033
course of an examination made under this chapter or under the law	1034
of another state or jurisdiction that is substantially similar to	1035
this chapter, or in the course of the superintendent's analysis or	1036
investigation of the financial condition or market conduct of a	1037
licensee are confidential by law and privileged, are not a public	1038
record open for inspection under section 149.43 of the Revised	1039
Code, are not subject to subpoena, and are not subject to	1040
discovery or admissible in evidence in any private civil action.	1041
The superintendent may use the documents, materials, or other	1042
information in the furtherance of any regulatory or legal action	1043
brought as part of the superintendent's official duties.	1044

(3) Documents, materials, or other information, including,	1045
but not limited to, all working papers, and copies of working	1046
papers, in the possession or control of the NAIC and its	1047
affiliates and subsidiaries are confidential by law and	1048
privileged, are not subject to subpoena, and are not subject to	1049
discovery or admissible in evidence in any private civil action,	1050
if either of the following applies:	1051

(a) They are created, produced, or obtained by or disclosed	1052
to the NAIC and its affiliates and subsidiaries in the course of	1053
assisting an examination made under this chapter or assisting the	1054
superintendent or the comparable official in another state in the	1055
analysis or investigation of the financial condition or market	1056
conduct of a licensee.	1057

(b) The superintendent or the comparable official in another	1058
state discloses them to the NAIC and its affiliates and	1059
subsidiaries under division (D)(5) of this section or under a	1060
comparable provision in the law of the other state.	1061

(4) Neither the superintendent nor any person that received	1062
the documents, material, or other information while acting under	1063
the authority of the superintendent, including the NAIC and its	1064
affiliates and subsidiaries, shall be permitted to testify in any	1065
private civil action concerning any confidential documents,	1066
materials, or information subject to division (D)(1) of this	1067
section.	1068

(5)(a) In order to assist in the performance of the	1069
superintendent's duties, the superintendent may do any of the	1070
following:	1071

(i) Share documents, materials, or other information,	1072
including the confidential and privileged documents, materials, or	1073
information subject to division (D)(1) of this section, with other	1074
state, federal, and international regulatory agencies, with the	1075
NAIC and its affiliates and subsidiaries, and with state, federal,	1076
and international law enforcement authorities, if the recipient	1077
agrees to maintain the confidentiality and privileged status of	1078
the document, material, communication, or other information;	1079

(ii) Receive documents, materials, communications, or	1080
information, including otherwise confidential and privileged	1081
documents, materials, or information, from the NAIC and its	1082
affiliates and subsidiaries, and from regulatory and law	1083
enforcement officials of other foreign or domestic jurisdictions;	1084

(iii) Enter into agreements governing sharing and use of	1085
information consistent with this section.	1086

(b) The superintendent shall maintain as confidential or	1087
privileged any document, material, or information received under	1088
division (D)(5)(a)(ii) of this section with notice or the	1089
understanding that it is confidential or privileged under the laws	1090
of the jurisdiction that is the source of the document, material,	1091
or information.	1092

(6) No waiver of any applicable privilege or claim of	1093
confidentiality in the documents, materials, or information shall	1094
occur as a result of disclosure to the superintendent under this	1095
section or as a result of sharing as authorized in division (D)(5)	1096
of this section.	1097

(7) A privilege established under the law of any state or	1098
jurisdiction that is substantially similar to the privilege	1099
established under division (D) of this section shall be available	1100
and enforced in any proceeding in, and in any court of, this	1101
state.	1102

(8) Nothing contained in this chapter prevents or prohibits	1103
the superintendent from disclosing the content of an examination	1104
report, preliminary examination report or results, or any matter	1105
relating to those reports or results, to the official of any other	1106
state or country that is comparable to the superintendent, or to	1107
law enforcement officials of this or any other state or agency of	1108
the federal government at any time, or to the NAIC, if the agency	1109
or office receiving the report or matters relating to it agrees in	1110
writing to hold it confidential and in a manner consistent with	1111
this chapter.	1112

(E)(1) The superintendent may not appoint an examiner if the	1113
examiner, either directly or indirectly, has a conflict of	1114
interest or is affiliated with the management of, or owns a	1115
pecuniary interest in, any person subject to examination under	1116
this chapter. This division does not automatically preclude any of	1117
the following from being an examiner:	1118

(a) A viator;

1119

(b) An insured in a viaticated insurance policy or	1120
cetificate;	1121

(c) A beneficiary in an insurancea policy or certificate	1122
that is proposed to be viaticated.	1123

(2) Notwithstanding the requirements of division (E) of this	1124
section, the superintendent may retain from time to time, on an	1125
individual basis, qualified actuaries, certified public	1126
accountants, or other similar individuals who are independently	1127
practicing their professions, even though these persons may from	1128
time to time be similarly employed or retained by persons subject	1129
to examination under this chapter.	1130

(F)(1) As used in division (F) of this section, "expenses"	1131
include all of the following:	1132

(a) Compensation of examiners for each day or portion of a	1133
day worked;	1134

(b) Travel and living expenses of examiners;

1135

(c) All other incidental expenses incurred by or on behalf of	1136
examiners;	1137

(d) An allocated share of all expenses not described in	1138
division (F)(1), (2), or (3) of this section that are necessarily	1139
incurred in the performance of a market conduct examination,	1140
including the expenses of direct overhead and support staff for	1141
examiners.	1142

(2) When a market conduct examination is made of an insurera	1143
licensee under this chapter, the insurerlicensee shall pay the	1144
expenses of the examination. The expenses of an examination	1145
include those incurred on or after the date on which the	1146
superintendent notifies the insurerlicensee of the examination	1147
through the issuance of the final examination report.	1148

(3) Upon an insurer's failure to comply with division (A) of	1149
this section, the superintendent may initiate proceedings in	1150
accordance with Chapter 119. of the Revised Code to revoke,	1151
suspend, or refuse to renew the certificate of authority or	1152
license of the insurer. Additionally, theThe superintendent may	1153
request the attorney general to initiate a civil action in the	1154
court of common pleas of Franklin county to obtain and enforce a	1155
judgment for expenses incurred in the performance of a market	1156
conduct examination.	1157

(G)(1) No cause of action shall arise nor shall any liability	1158
be imposed against the superintendent, any authorized	1159
representative of the superintendent, or any examiner appointed by	1160
the superintendent for any statements made or conduct performed in	1161
good faith while carrying out the provisions of this chapter.	1162

(2) No cause of action shall arise nor shall any liability be	1163
imposed against any person for the act of communicating or	1164
delivering information or data to the superintendent, any	1165
authorized representative of the superintendent, or any examiner	1166
appointed by the superintendent pursuant to an examination made	1167
under this chapter, if the act of communication or delivery was	1168
performed in good faith and without fraudulent intent or the	1169
intent to deceive. Division (G)(2) of this sectionThis division	1170
does not abrogate or modify in any way any common law or statutory	1171
privilege or immunity previously enjoyed by any person identified	1172
in division (G)(1) of this section.	1173

(3) A person identified in division (G)(1) or (2) of this	1174
section shall be entitled to an award of attorney's fees and costs	1175
if the person is the prevailing party in a civil action for libel,	1176
slander, or any other relevant tort arising out of activities in	1177
carrying out the provisions of this chapter and the party bringing	1178
the action was not substantially justified in bringing the action.	1179
For purposes of this division (G)(3) of this section, a proceeding	1180
an action is "substantially justified" if it had a reasonable	1181
basis in law or fact at the time that it was initiated.	1182

(H) The superintendent may investigate suspected fraudulent	1183
viatical settlement acts and persons engaged in the business of	1184
viatical settlements.	1185

Sec. 3916.12. (A) Each viatical settlement provider and	1186
viatical settlement broker licensedlicensee under this chapter	1187
shall file with the superintendent of insurance, on or before the	1188
first day of March of each year, an annual statement containing	1189
the information required by the superintendent by rule adopted in	1190
accordance with chapter 119. of the Revised Codeverified under	1191
oath by two officers in the form prescribed by the	1192
superintendent. The annual statement for a viatical settlement	1193
provider shall include the following information about the	1194
viatical settlement provider's transactions:	1195

(1) Aggregate total of the value of unsettled viatical	1196
settlement contracts that have been signed by the viator but have	1197
not been settled as of the date of the report categorized by the	1198
number of days since the viator signed the contract;	1199

(2) Number of policies purchased, total amount of settlement	1200
paid for policies purchased, total face value of policies	1201
purchased beginning with the reporting year and most recent five	1202
years;	1203

(3) Number of settlements paid in the preceding calendar	1204
year, allocated by state or territory;	1205

(4) Any other information required by the superintendent.

1206

(B) On or before the first day of May of each year, a	1207
viatical settlement provider licensed in this state shall file	1208
with the superintendent its financial statement, audited by an	1209
independent certified public accountant along with a letter	1210
stating whether any significant deficiencies or material	1211
weaknesses were detected during the audit pursuant to statement on	1212
auditing standards number 112 or as amended or superseded.	1213

(C)(1) Each viatical settlement provider shall file with the	1214
superintendent interim unaudited financial statements, including	1215
comparative results and footnotes to the financial statements, on	1216
a quarterly basis within forty-five days after the end of each	1217
quarter. The interim financial statements shall meet all of the	1218
following requirements:	1219

(a) Be certified by the chief executive officer and chief	1220
financial officer as to the accuracy and fair presentation;	1221

(b) Include disclosures either on the face of the financial	1222
statements or in accompanying footnotes sufficient so as to make	1223
the interim information not misleading.	1224

(2) Viatical settlement providers may assume that the users	1225
of the interim financial statements have access to the prior	1226
fiscal year-end audited financial statements and that the adequacy	1227
of additional disclosure needed for a fair presentation, except in	1228
regard to material contingencies, may be determined in that	1229
context. A footnote disclosure that would substantially duplicate	1230
the disclosure contained in the audited financial statements for	1231
the preceding fiscal year may be omitted. A footnote disclosure	1232
shall be provided if events subsequent to the fiscal year end have	1233
a material impact on the viatical settlement provider.	1234

(D) A viatical settlement provider that willfully fails to	1235
file the annual statements required by this section, or willfully	1236
fails to reply within thirty calendar days to a written inquiry	1237
from the superintendent or the superintendent's designee, shall,	1238
in addition to other penalties provided by this chapter, be	1239
subject to a penalty of up to two hundred fifty dollars per day,	1240
not to exceed twenty-five thousand dollars in the aggregate for	1241
each such failure.	1242

(E) The superintendent shall keep confidential and not a	1243
matter of public record all proprietary information of the	1244
licensee, all individual transaction data regarding the business	1245
of viatical settlements, and data that could compromise the	1246
privacy of personal, financial, and health information of the	1247
viator or insured.	1248

Sec. 3916.13.  Except as otherwise permitted or required by	1249
law, a viatical settlement provider, viatical settlement broker,	1250
insurance company, insurance agent, insurance broker, information	1251
bureau, rating agency or company, or any other person with actual	1252
knowledge of a viator or an insured's identity, shall not	1253
disclose that identity as an insured, including the viator or	1254
insured's name and individual identification data, or the viator	1255
or insured's financial or medical information, unless any of the	1256
following apply:	1257

(A) The disclosure is necessary to effect a viatical	1258
settlement between the viator and a viatical settlement provider,	1259
and the viator and insured have provided prior written consent to	1260
the disclosure.	1261

(B) The disclosure is provided in response to an	1262
investigation or examination by the superintendent of insurance or	1263
by any other governmental officer or agency or pursuant to the	1264
requirements of division (C) of section 3916.18 of the Revised	1265
Code.	1266

(C) The disclosure is a term of, or condition to, the	1267
transfer of a viaticated policy by one viatical settlement	1268
provider to another viatical settlement provider.	1269

(D) The disclosure is necessary to permit a financing entity,	1270
related provider trust, or special purpose entity to finance the	1271
purchase of policies or certificates by a viatical settlement	1272
provider, and the viator and insured have provided prior written	1273
consent to the disclosure.	1274

(E) The disclosure is necessary to allow the viatical	1275
settlement provider or viatical settlement broker or theirits	1276
authorized representatives to make contacts for the purpose of	1277
determining health status.	1278

(F) The disclosure is required to purchase stop-loss coverage	1279
or financial guaranty insurance.	1280

Sec. 3916.14.  (A)(1) The superintendent of insurance may	1281
conduct an examination under this chapter of a licensee as often	1282
as the superintendent in the superintendent's sole discretion	1283
considers appropriate. The superintendent shall consider all of	1284
the following to determine the nature, scope, and frequency of	1285
examinations:	1286

(a) Consumer complaints;

1287

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

1288

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

1289

(d) Any report of independent certified public accountants;

1290

(e) Any other criteria the superintendent determines to be	1291
appropriate.	1292

(2) For the purposes of completing an examination of a	1293
licensee under this chapter, the superintendent may examine or	1294
investigate any person, or the business of any person, insofar as	1295
the examination or investigation, in the sole discretion of the	1296
superintendent, is necessary or material to the examination of the	1297
licensee.	1298

(3) In lieu of an examination under this chapter of any	1299
foreign or alien licensee licensed under this chapter, the	1300
superintendent, at the superintendent's discretion, may accept an	1301
examination report on the licensee as prepared by the official of	1302
the licensee's state of domicile or port-of-entry state who is	1303
comparable to the superintendent. As far as is practical, the	1304
superintendent shall cooperate with that official for any	1305
examination of a foreign or alien licensee.	1306

(B) The licensee or applicant shall pay to the superintendent	1307
all costs, assessments, forfeitures, or fines incurred in	1308
conducting an examination under this section. The superintendent	1309
shall deposit the money into the state treasury to the credit of	1310
the department of insurance operating fund created by section	1311
3901.021 of the Revised Code.	1312

Sec. 3916.15.  (A) The superintendent of insurance may refuse	1313
to issue or may suspend, revoke, or refuse to renew the license of	1314
a viatical settlement provider or viatical settlement broker, if	1315
the superintendent finds that any of the following apply:	1316

(1) There was a material misrepresentation in the application	1317
for the license.	1318

(2) The applicant or licensee or any officer, partner,	1319
member, key management personnel, or designee of the applicant or	1320
licensee has been convicted of fraudulent or dishonest practices,	1321
is subject to a final administrative action in another state, has	1322
been the subject of an administrative or civil action brought by	1323
the department of commerce, division of securities, or is	1324
otherwise shown to be untrustworthy or incompetent.	1325

(3) The licensee is a viatical settlement provider that	1326
demonstrates a pattern of unreasonable payments to viators.	1327

(4) The licensee or any officer, partner, member, key	1328
management personnel, or designee of the licensee has been	1329
convicted of or has pleaded guilty or no contest to a felony or to	1330
a misdemeanor involving fraud, moral turpitude, dishonesty, or	1331
breach of trust, regardless of whether a judgment of conviction	1332
has been entered by the court.	1333

(5) The licensee is a viatical settlement provider that has	1334
used a viatical settlement contract form that has not been	1335
approved under this chapter.	1336

(6) The licensee is a viatical settlement provider that has	1337
failed to honor contractual obligations set out in a viatical	1338
settlement contract.	1339

(7) The licensee no longer meets the requirements for initial	1340
licensure.	1341

(8) The licensee is a viatical settlement provider that has	1342
assigned, transferred, or pledged a viaticated policy to a person	1343
that isthe licensee knew or should have known was not aone of	1344
the following:	1345

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

1346

(b) A viatical settlement purchaser;

1347

(c) A qualified institutional buyer;

1348

(d) A financing entity, a;

1349

(e) A special purpose entity, or a;

1350

(f) A related provider trust.

1351

(9) The licensee or any officer, partner, member, key	1352
management personnel, or designee of the licensee has violated any	1353
provision of this chapter or any rule adopted under this chapter.	1354

(10) The licensee or any officer, partner, member, key	1355
management personnel, or designee of the licensee has committed	1356
any coercive, fraudulent, or dishonest act, or made any untrue,	1357
deceptive, or misleading statement, in connection with a viatical	1358
settlement transaction or a proposed viatical settlement	1359
transaction.	1360

(B) Before the superintendent refuses to issue a license	1361
under this chapter, or suspends, revokes, or refuses to renew the	1362
license of a viatical settlement provider or viatical settlement	1363
broker, the superintendent shall provide the licensee or	1364
applicant with notice and an opportunity for hearing as provided	1365
in chapterChapter 119. of the Revised Code, except as follows:	1366

(1)(a) Any notice of opportunity for hearing, the hearing	1367
officer's findings and recommendations, or the superintendent's	1368
order shall be served by certified mail at the last known address	1369
of the licensee or applicant. Service shall be evidenced by return	1370
receipt signed by any person.	1371

For purposes of this section, the "last known address" is the	1372
address that appears in the licensing records of the department of	1373
insurance.	1374

(b) If the certified mail envelope is returned with an	1375
endorsement showing that service was refused, or that the envelope	1376
was unclaimed, the notice and all subsequent notices required by	1377
Chapter 119. of the Revised Code may be served by ordinary mail to	1378
the last known address of the licensee or applicant. The mailing	1379
shall be evidenced by a certificate of mailing. Service is deemed	1380
complete as of the date of such certificate provided that the	1381
ordinary mail envelope is not returned by the postal authorities	1382
with an endorsement showing failure of delivery. The time period	1383
in which to request a hearing, as provided in Chapter 119. of the	1384
Revised Code, begins to run on the date of mailing.	1385

(c) If service by ordinary mail fails, the superintendent may	1386
shall cause a summary of the substantive provisions of the notice	1387
to be published once a week for three consecutive weeks in a	1388
newspaper of general circulation in the county where the last	1389
known place of residence or business of the licensee or applicant	1390
is located. The notice is considered served on the date of the	1391
third publication.	1392

(d) Any notice required to be served under Chapter 119. of	1393
the Revised Code shall also be served upon the attorney of the	1394
licensee or applicant by ordinary mail if the attorney has entered	1395
an appearance in the matter.	1396

(e) The superintendent may, at any time, perfect service on a	1397
licensee or applicant by personal delivery of the notice by an	1398
employee of the department.	1399

(f) Notices regarding the scheduling of hearings and all	1400
other matters not described in division (B)(1)(a) of this section	1401
shall be sent by ordinary mail to the licensee or applicant and to	1402
the attorney of the licensee or applicant.	1403

(2) Any subpoena for the appearance of a witness or the	1404
production of documents or other evidence at a hearing, or for the	1405
purpose of taking testimony for use at a hearing, shall be served	1406
by certified mail, return receipt requested, by an attorney or by	1407
an employee of the department designated by the superintendent.	1408
Such subpoenas shall be enforced in the manner provided in section	1409
119.09 of the Revised Code. Nothing in this section shall be	1410
construed as limiting the superintendent's other statutory powers	1411
to issue subpoenas.	1412

Sec. 3916.16.  (A)(1) It is a violation of this chapter for	1413
any person to enter into a viatical settlement contract prior to	1414
the application for or issuance of a policy that is the subject	1415
of the viatical settlement contract.	1416

(2) It is a violation of this chapter for any person to	1417
issue, solicit, market, or otherwise promote the purchase of a	1418
policy for the purpose of or with an emphasis on selling the	1419
policy.	1420

(B) It is a violation of this chapter for any person to enter	1421
into a viatical settlement contract within a two-yearfive-year	1422
period commencing with the date of issuance of the insurance	1423
policy or certificate unless the viator certifies to the viatical	1424
settlement provider that one or more of the following conditions	1425
have been met within that two-year periodfive years after the	1426
issuance of the policy:	1427

(1) The policy or certificate was issued upon the viator's	1428
exercise of conversion rights arising out of a group policy or	1429
certificate, provided the total of the time covered under the	1430
conversion policy or certificate plus the time covered under the	1431
groupprior policy or certificate is at least twenty-foursixty	1432
months. The time covered under thea group policy or certificate	1433
shall be calculated without regard to any change in insurance	1434
carriers, provided the coverage has been continuous and under the	1435
same group sponsorship.	1436

(2) The viator is a charitable organization with an insurable	1437
interest pursuant to division (B) of section 3911.09 the Revised	1438
Code that has received from the Internal Revenue Service a	1439
determination letter that is currently in effect, stating that the	1440
charitable organization is exempt from federal income taxation	1441
under 26 U.S.C.subsection 501(a) and described in section	1442
501(c)(3) of the "Internal Revenue Code."	1443

(3) The viator is not an individual.

1444

(4) The viator certifies and submits independent evidence to	1445
the viatical settlement provider that one or more of the	1446
following conditions have been met within that two-year period	1447
arisen after the issuance of the policy:	1448

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

1449

(b) The viator's spouse dies.

1450

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

1451

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

1452

(e) The viator becomes physically or mentally disabled, and a	1453
physician determines that the disability prevents the viator from	1454
maintaining full-time employment.	1455

(f) The viator was the insured's employer at the time the	1456
policy or certificate was issued and the employment relationship	1457
terminated.	1458

(g) A court of competent jurisdiction enters a final order,	1459
judgementjudgment, or decree on the application of a creditor of	1460
the viator and adjudicates the viator bankrupt or insolvent or	1461
approves a petition seeking reorganization of the viator or	1462
appointing a receiver, trustee, or liquidator to all or a	1463
substantial part of the viator's assets.	1464

(h) The viator experiences a significant decrease in income	1465
that is unexpected and that impairs the viator's reasonable	1466
ability to pay the policy premium.	1467

(i) The viator or insured disposes of the viator's or	1468
insured's ownership interests in a closely held corporation	1469

(g) The sole beneficiary of the policy is a family member of	1470
the viator and the beneficiary dies.	1471

(4) The viator enters into a viatical settlement contract	1472
more than two years after the date of issuance of a policy and	1473
certifies that all of the following are true:	1474

(a) The viator has funded the policy using personal assets,	1475
which may include an interest in the life insurance policy being	1476
viaticated up to the cash surrender value of the policy or any	1477
financing agreement to fund the policy premiums entered into prior	1478
to policy issuance or within two years of policy issuance was	1479
provided to the insurer within thirty days of the date the	1480
agreement was executed and the financing agreement was secured	1481
with personal assets.	1482

(b) The viator had no agreement or understanding with any	1483
other person to viaticate the policy or transfer the benefits of	1484
the policy, including through an assumption or forgiveness of a	1485
premium finance loan at any time prior to issuance of the policy	1486
or during the two years after the date of issuance of the policy.	1487

(c) If requested by the insurer, the viator both disclosed to	1488
the insurer whether a person other than the insurer obtained a	1489
life expectancy evaluation for settlement purposes in connection	1490
with the application, underwriting, and issuance of the policy and	1491
provided a copy of any such life expectancy evaluation to the	1492
insurer at the time of application.	1493

(d) The viator disclosed any financial arrangement, trust, or	1494
other arrangement, transaction, or device that conceals the	1495
ownership or beneficial interest of the policy to the insurer	1496
prior to the issuance of the policy.	1497

(B)(C) Copies of the independent evidence described in	1498
division (A)(4)(B)(3) of this section and documents required by	1499
section 3916.07 of the Revised Code shall be submitted to the	1500
insurer when the viatical settlement provider or any other party	1501
entering into a viatical settlement contract with a viator	1502
submits a request to the insurer for verification of coverage.	1503
The copies shall be accompanied by a letter of attestation from	1504
the viatical settlement provider that the copies are true and	1505
correct copies of the documents received by the viatical	1506
settlement provider.	1507

(C)(D) If the viatical settlement provider submits to the	1508
insurer a copy of the owner or insured's certification and	1509
independent evidence described in division (A)(4)(B)(3) of this	1510
section when the viatical settlement provider submits a request	1511
to the insurer to effect the transfer of the policy or	1512
certificate to the viatical settlement provider, the copy	1513
conclusively establishes that the viatical settlement contract	1514
satisfies the requirements of this section, and the insurer shall	1515
timely respond to the request.	1516

(E) No insurer, as a condition of responding to a request for	1517
verification of coverage or effecting the transfer of a policy	1518
pursuant to a viatical settlement contract, may require the	1519
viator, insured, viatical settlement provider, or viatical	1520
settlement broker to sign any form, disclosure, consent, or	1521
waiver form that has not been approved by the superintendent of	1522
insurance for use in connection with viatical settlement	1523
contracts.	1524

(F) Upon receipt of a properly completed request for change	1525
of ownership or beneficiary of a policy, the insurer shall respond	1526
in writing within thirty calendar days to confirm that the insurer	1527
has made the change or specify reasons that the change cannot be	1528
processed. No insurer shall unreasonably delay effecting change in	1529
ownership or beneficiary or seek to interfere with any viatical	1530
settlement contract lawfully entered into in this state.	1531

(G) A viatical settlement provider or viatical settlement	1532
broker that is party to a plan, transaction, or series of	1533
transactions to originate, renew, continue, or finance a policy	1534
with the insurer for the purpose of engaging in the business of	1535
viatical settlements at any time prior to or during the first	1536
five years after the insurer issues the policy shall fully	1537
disclose the plan, transaction, or series of transactions to	1538
the superintendent of insurance.	1539

Sec. 3916.17.  (A) The general assembly hereby declares that	1540
the purpose of this section is to provide prospective viators with	1541
clear and unambiguous statements in the advertisement of viatical	1542
settlements and to assure the clear, truthful, and adequate	1543
disclosure of the benefits, risks, limitations, and exclusions of	1544
any viatical settlement contract. This purpose is intended to be	1545
accomplished by the establishment of guidelines and standards of	1546
permissible and impermissible conduct in the advertising of	1547
viatical settlements to assure that product descriptions are	1548
presented in a manner that prevents unfair, deceptive, or	1549
misleading advertising and is conducive to accurate presentation	1550
and description of viatical settlements through the advertising	1551
media and material used by viatical settlement licensees.	1552

Divisions (B) to (P) of this section apply to any	1553
advertising of viatical settlement contracts, or any related	1554
products or services intended for dissemination in this state,	1555
including, but not limited to, internet advertising viewed by	1556
persons located in this state. In cases in which disclosure	1557
requirements are established pursuant to federal regulation, this	1558
section shall be interpreted so as to minimize or eliminate	1559
conflict with federal regulation wherever possible.	1560

(B) Every viatical settlement licensee shall establish and at	1561
all times shall maintain a system of control over the content,	1562
form, and method of dissemination of all advertisements of its	1563
contracts, products, and services. All advertisements, regardless	1564
of by whom they are written, created, designed, or presented,	1565
shall be the responsibility of the viatical settlement licensee	1566
and of the individual whoperson that created or presented the	1567
advertisement. A system of control shall include regular routine	1568
notification, at least once a year, to agents and others	1569
authorized by the viatical settlement licensee who disseminate	1570
advertisements of the requirements and procedures for approval	1571
compliance under this section prior to the use of any	1572
advertisements not furnished by the viatical settlement	1573
licensee.	1574

(C) All advertisements that are subject to this section shall	1575
be truthful and not misleading in fact or by implication. The form	1576
and content of an advertisement of a viatical settlement contract	1577
shall be sufficiently complete and clear so as to avoid deception	1578
and shall not have the capacity or tendency to mislead or deceive.	1579
The determination of whether an advertisement has the capacity or	1580
tendency to mislead or deceive shall be made by the superintendent	1581
of insurance, from the overall impression that the advertisement	1582
may be reasonably expected to create upon a person of average	1583
education or intelligence within the segment of the public to	1584
which it is directed.	1585

(D) Viatical settlement advertisements containing any	1586
representation set forth in this division are deemed false and	1587
misleading on their face and are prohibited. False and misleading	1588
viatical settlement advertisements include, but are not limited	1589
to, those including any of the following representations:	1590

(1) "Guaranteed," "fully secured," "100 percent secured,"	1591
"fully insured," "secure," "safe," "backed by rated insurance	1592
companies," "backed by federal law," "backed by state law," or	1593
"state guaranty funds," or similar representations;	1594

(2) "No risk," "minimal risk," "low risk," "no speculation,"	1595
"no fluctuation," or similar representations;	1596

(3) "Qualified or approved for individual retirement accounts	1597
(IRAs), Roth IRAs, 401(k) plans, simplified employee pensions	1598
(SEPs), 403(b), Keogh plans, TSA, or other retirement account	1599
rollovers," "tax deferred," or similar representations;	1600

(4) Utilization of the word "guaranteed" to describe the	1601
fixed return, annual return, principal, earnings, profits,	1602
investment, or similar representations;	1603

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

1604

(6) "High yield," "superior return," "excellent return,"	1605
"high return," "quick profit," or similar representations;	1606

(7) Purported favorable representations or testimonials about	1607
the benefits of viatical settlement contracts or viatical	1608
settlement purchase agreements as an investment, taken out of	1609
context from any newspaper, trade paper, journal, radio or	1610
television program, or any other form of print and electronic	1611
media.	1612

(E)(1) The information required to be disclosed under this	1613
section shall not be minimized, rendered obscure, or presented in	1614
an ambiguous fashion or intermingled with the text of the	1615
advertisement so as to be confusing or misleading.	1616

An advertisement shall not omit material information or use	1617
any words, phrases, statements, references, or illustrations if	1618
the omission or use has the capacity, tendency, or effect of	1619
misleading or deceiving viators, as to the nature or extent of any	1620
benefit, loss covered, premium payable, or state or federal tax	1621
consequence. The fact that the viatical settlement contract	1622
offered is made available for inspection prior to consummation of	1623
the sale, that an offer is made to refund the payment if the	1624
viator is not satisfied, or that the viatical settlement contract	1625
includes a "free look" period that satisfies or exceeds legal	1626
requirements, does not remedy any misleading statements.	1627

(2) An advertisement shall not use the name or title of a	1628
life insurance company or a life insurance policy unless the	1629
advertisement has been approved by the insurerthat company.	1630

(3) An advertisement shall not represent that any premium	1631
payments will not be required to be paid on the life insurance	1632
policy that is the subject of a viatical settlement contract or	1633
viatical settlement purchase agreement in order to maintain that	1634
policy, unless that is the fact.	1635

(4) An advertisement shall not state or imply that interest	1636
charged on an accelerated death benefit or a policy loan is	1637
unfair, inequitable, or in any manner an incorrect or improper	1638
practice.	1639

(5) The words "free," "no cost," "without cost," "no	1640
additional cost," "at no extra cost," or words of similar import	1641
shall not be used with respect to any policy or to any benefit or	1642
service unless true. An advertisement may specify the charge for	1643
a benefit or a service or may state that a charge is included in	1644
the payment or use other appropriate language.	1645

(6)(a) TerstimonialsTestimonials, appraisals, analyses, or	1646
endorsements used in advertisements must satisfy all of the	1647
following:	1648

(i) They must be genuine.

1649

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

1650

(iii) They must be applicable to the viatical settlement	1651
contrctcontract product or service advertised, if any.	1652

(iv) They must be accurately reproduced with sufficient	1653
completeness to avoid misleading or deceiving prospective viators	1654
as to the nature or scope of the testimonials, appraisals,	1655
analyses, or endorsements.	1656

(b) In using testimonials, appraisals, analyses, or	1657
endorsements, the viatical settlement licensee makes as its own	1658
all the statements contained in the testimonials, appraisals,	1659
analyses, or endorsements, and the statements are subject to all	1660
the provisions of this section.	1661

(c) If the individual making a testimonial, appaisal	1662
appraisal, analysis, or endorsement has a funancialfinancial	1663
interest in the viatical settlement provider or related entity	1664
subject of that testimonial, appraisal, analysis, or endorsement	1665
directly or indirectly as a stockholdershareholder, director,	1666
officer, employee, or otherwise, or receives any benefit directly	1667
or indirectly other than required union scale wages, that fact	1668
shall be prominently disclosed in the advertisement.	1669

(d) An advertisement shall not state or im-plyimply that a	1670
viatical settlement contract benefit or service has been approved	1671
or endorsed by a group of individuals, society, association, or	1672
other organization unless that is the fact and unless any	1673
relationship between the individualgroup of individuals, society,	1674
association, or organization and the viatical settlement provider	1675
is disclosed. If the entity making the endorsement or testimonial	1676
is owned, controlled, or managed by the viatical settlement	1677
provider, or receives any payment or other consideration from the	1678
viatical settlement provider for making an endorsement or	1679
testimonial, that fact shall be disclosed in the advertisement.	1680

(e) When an endorsement refers to benefits received under a	1681
viatical settlement contract, all pertinent information shall be	1682
retained for a period of at least five years after its use.	1683

(F) An advertisement shall not contain statistical	1684
information unless the information accurately reflects recent and	1685
relevant facts. The source of all statistics used in an	1686
advertisement shall be identified.	1687

(G) An advertisement shall not disparage any insurer,	1688
viatical settlement provider, viatical settlement broker, viatical	1689
settlement investment agent, insurance producer, policy, service,	1690
or method of marketing.	1691

(H) All advertisements about a viatical settlement provider	1692
or its viatical settlement contract, products, or services	1693
shall clearly identify the viatical settlement provider's name.	1694
If any specific viatical settlement contract is advertised, the	1695
viatical settlement contract shall be identified either by form	1696
number or some other appropriate description. If an application	1697
is part of the advertisement, the name of the viatical	1698
settlement provider shall be shown on the application.	1699

(I) An advertisement shall not use a trade name, group	1700
designation, name of the parent company of a viatical settlement	1701
licensee, name of a particular division of the viatical	1702
settlement licensee, service mark, slogan, symbol, or other	1703
device or reference without disclosing the name of the viatical	1704
settlement licensee, if either of the following applies regarding	1705
the advertisement:	1706

(1) It would have the capacity or tendency to mislead or	1707
deceive as to the true identity of the viatical settlement	1708
licensee.	1709

(2) It would have the capacity or tendency to create the	1710
impression that a company other than the viatical settlement	1711
licensee would have any responsibility for the financial	1712
obligation under a viatical settlement contract.	1713

(J) An advertisement shall not use any combination of words,	1714
symbols, or physical materials that, by their content,	1715
phraseology, shape, color, or other characteristics, are so	1716
similar to a combination of words, symbols, or physical materials	1717
used by a government program or agency or otherwise appear to be	1718
of such a nature that they tend to mislead prospective viators	1719
into believing that the solicitation is in some manner connected	1720
with a government program or agency.	1721

(K) An advertisement may state that a viatical settlement	1722
providerlicensee is licensed in the state in which the	1723
advertisement appears, provided it does not exaggerate that fact	1724
or suggest or imply that competing viatical settlement providers	1725
competitors may not be so licensed. The advertisement may ask the	1726
audience to consult the licensee's web site or contact the	1727
department of insurance to find out if the state in which the	1728
advertisement appears requires licensing and, if it does, whether	1729
the viatical settlement provider or viatical settlement broker	1730
person is licensed.	1731

(L) An advertisement shall not create the impression that the	1732
viatical settlement provider, its financial condition or status,	1733
the payment of its claims, or the merits, desirability, or	1734
advisability of its viatical settlement contracts are recommended	1735
or endorsed by any government entity.	1736

(M) All advertisements of an actual licensee shall state the	1737
name of the actual licensee. An advertisement shall not use a	1738
trade name, any group designation, name of any affiliate or	1739
controlling entity of the licensee, service mark, slogan, symbol,	1740
or other device in a manner that would have the capacity or	1741
tendency to mislead or deceive as to the true identity of the	1742
actual licensee or create the false impression that an affiliate	1743
or controlling entity would have any responsibility for the	1744
financial obligation of the licensee.	1745

(N) An advertisement shall not directly or indirectly create	1746
the impression that any division or agency of this state, any	1747
other state, or the United States government endorses, approves,	1748
or favors any of the following:	1749

(1) Any viatical settlement licensee or its business	1750
practices or methods of operation;	1751

(2) The merits, desirability, or advisability of any viatical	1752
settlement contract, or viatical settlement program;	1753

(3) Any viatical settlement contract, or viatical settlement	1754
program;	1755

(4) Any life insurance policy or certificate or life	1756
insurance company.	1757

(O) If the advertiser emphasizes the speed with which the	1758
viatication will occur, the advertising must disclose the average	1759
time frame, from completed application to the date of offer and	1760
from acceptance of the offer to receipt of the funds by the	1761
viator.	1762

(P) If the advertising emphasizes the dollar amounts	1763
available to viators, the advertising shall disclose the average	1764
purchase price as a per cent of face value obtained by viators	1765
contracting with the licensee during the past six months.	1766

Sec. 3916.171. (A) No person shall commit a fraudulent	1767
viatical settlement act.	1768

(B) All of the following acts are fraudulent viatical	1769
settlement acts when committed by any person who, knowingly and	1770
with intent to defraud and for the purpose of depriving another of	1771
property or for pecuniary gain, commits, or permits any of its	1772
employees or its agents to commit them:	1773

(1) Presenting, causing to be presented, or preparing with	1774
knowledge or belief that it will be presented to or by a viatical	1775
settlement provider, viatical settlement broker, life expectancy	1776
provider, viatical settlement purchaser, financing entity,	1777
insurer, insurance broker, insurance agent, or any other person,	1778
any false material information, or concealing any material	1779
information, as part of, in support of, or concerning a fact	1780
material to, one or more of the following:	1781

(a) An application for the issuance of a viatical settlement	1782
contract or a policy;	1783

(b) The underwriting of a viatical settlement contract or a	1784
policy;	1785

(c) A claim for payment or benefit pursuant to a viatical	1786
settlement contract or a policy;	1787

(d) Any premiums paid on a policy;

1788

(e) Any payments and changes in ownership or beneficiary made	1789
in accordance with the terms of a viatical settlement contract or	1790
a policy;	1791

(f) The reinstatement or conversion of a policy;

1792

(g) The solicitation, offer, effectuation, or sale of a	1793
viatical settlement contract or a policy;	1794

(h) The issuance of written evidence of a viatical settlement	1795
contract or a policy;	1796

(i) A financing transaction;

1797

(j) Any application for or the existence of or any payments	1798
related to a loan secured directly or indirectly by any interest	1799
in a policy.	1800

(2) Failing to disclose to the insurer, where the insurer has	1801
requested such disclosure, that the prospective insured has	1802
undergone a life expectancy evaluation by any person or entity	1803
other than the insurer or its authorized representatives in	1804
connection with the application, underwriting, and issuance of the	1805
policy.	1806

(3) In the furtherance of a fraud or to prevent the detection	1807
of a fraud, doing any of the following:	1808

(a) Removing, concealing, altering, destroying, or	1809
sequestering from the superintendent of insurance the assets or	1810
records of a licensee or another person engaged in the business of	1811
viatical settlements;	1812

(b) Misrepresenting or concealing the financial condition of	1813
a licensee, financing entity, insurer, or any other person;	1814

(c) Transacting the business of viatical settlements in	1815
violation of any law of this state requiring a license,	1816
certificate of authority, or other legal authority for the	1817
transaction of the business of viatical settlements;	1818

(d) Filing with the superintendent of insurance or the chief	1819
insurance regulatory official of another jurisdiction a document	1820
containing false information or otherwise concealing from the	1821
superintendent any information about a material fact.	1822

(4) Recklessly entering into, negotiating, brokering, or	1823
otherwise dealing in a viatical settlement contract involving a	1824
policy that was obtained by presenting false, deceptive, or	1825
misleading information of any fact material to the policy, or by	1826
concealing information concerning any fact material to the	1827
policy, for the purpose of misleading and with the intent to	1828
defraud the issuer of the policy, the viatical settlement	1829
provider, or the viator;	1830

(5) Committing any embezzlement, theft, misappropriation, or	1831
conversion of moneys, funds, premiums, credits, or other property	1832
of a viatical settlement provider, insurer, insured, viator,	1833
policyowner, or any other person engaged in the business of	1834
viatical settlements or insurance;	1835

(6) Employing any plan, financial structure, device, scheme,	1836
or artifice to defraud in the business of viatical settlements;	1837

(7) Misrepresenting the state of residence or facilitating	1838
the change of the state in which a person owns a policy or the	1839
state of residency of a viator to a state or jurisdiction that	1840
does not have laws similar to this chapter for the express	1841
purposes of evading or avoiding the provisions of this chapter;	1842

(8) In the solicitation, application, or issuance of a	1843
policy, employing any device, scheme, or artifice in violation of	1844
sections 3911.09 or 3911.091 of the Revised Code;	1845

(9) Engaging in any conduct related to a viatical settlement	1846
contract if the person knows or should have known that the intent	1847
of the transaction was to avoid the disclosure and notice	1848
requirements of section 3916.06 of the Revised Code;	1849

(10) Entering into a premium finance agreement with any	1850
person pursuant to which the person will receive, directly or	1851
indirectly, any proceeds, fees, or other considerations from the	1852
policy, the owner of the policy, the issuer of the policy, or from	1853
any other person with respect to the premium finance agreement or	1854
any viatical settlement contract, or from any transaction related	1855
to the policy, that are in addition to the amount required to	1856
pay the principal, interest, costs, and expenses related to the	1857
policy premiums pursuant to the premium finance agreement or	1858
subsequent sale of the agreement. Any payments, charges, fees, or	1859
other amounts in addition to the amounts required to pay the	1860
principal, interest, costs, and expenses related to policy	1861
premiums paid under the premium finance agreement shall be	1862
remitted to the original owner of the policy or, if the owner is	1863
not living at the time of the determination of the overpayment, to	1864
the estate of the owner.	1865

(11) With respect to any viatical settlement contract or a	1866
policy, for a viatical settlement broker or an agent registered	1867
under this chapter as operating as a viatical settlement broker	1868
to knowingly solicit an offer from, effectuate a viatical	1869
settlement with, or make a sale to any viatical settlement	1870
provider, viatical settlement purchaser, financing entity, or	1871
related provider trust that is controlling, controlled by, or	1872
under common control with such viatical settlement broker or	1873
registered agent unless both of the following are true:	1874

(a) The viatical settlement broker or agent disclosed that	1875
affiliation to the viator.	1876

(b) The viatical settlement broker or agent is controlled by	1877
or under common control with a person that is regulated under the	1878
"Securities Act of 1933" or the "Securities Act of 1934," 15	1879
U.S.C. 77a et seq., as amended.	1880

(12) With respect to any viatical settlement contract or a	1881
policy, for a viatical settlement provider to knowingly enter	1882
into a viatical settlement contract with a viator if, in	1883
connection with such viatical settlement contract, anything of	1884
value will be paid to a viatical settlement broker or an agent	1885
registered under this chapter as operating as a viatical	1886
settlement broker that is controlling, controlled by, or under	1887
common control with such viatical settlement provider or the	1888
viatical settlement purchaser, financing entity, or related	1889
provider trust that is involved in such viatical settlement	1890
contract unless both of the following are true:	1891

(a) The viatical settlement broker or agent disclosed that	1892
affiliation to the viator.	1893

(b) The viatical settlement broker or agent is controlled by	1894
or under common control with a person that is regulated under the	1895
"Securities Act of 1933" or the "Securities Act of 1934," 15	1896
U.S.C. 77a et seq., as amended.	1897

(13) Issuing, soliciting, marketing, or otherwise promoting	1898
the purchase of a policy for the purpose of or with emphasis on	1899
settling the policy;	1900

(14) Issuing or using a pattern of false, misleading, or	1901
deceptive life expectancies;	1902

(15) Issuing, soliciting, marketing, or otherwise promoting	1903
stranger-originated life insurance;	1904

(16) Attempting to commit, assisting, aiding or abetting in	1905
the commission of, or conspiracy to commit any act or omission	1906
specified in divisions (B)(1) to (15) of this section.	1907

Sec. 3916.172. Any contract, agreement, arrangement, or	1908
transaction including, but not limited to, any financing	1909
agreement or arrangement identified in section 1321.72 of the	1910
Revised Code entered into for the furtherance or aid of a	1911
stranger-originated life insurance act, practice, arrangement, or	1912
agreement is void and unenforceable.	1913

Sec. 3916.173. Trusts or other persons that are created to	1914
give the appearance of insurable interest and are used to initiate	1915
one or more policies for investors violate insurable interest laws	1916
and the prohibition against wagering on life.	1917

Sec. 3916.18.  (A)(1) No person shall commit a fraudulent	1918
viatical settlement act.	1919

(2) No person shall knowingly or intentionally interfere with	1920
the enforcement of the provisions of this chapter or	1921
investigations of suspected or actual violations of this chapter.	1922

(3)(2) No person in the business of viatical settlements	1923
shall knowingly or intentionally permit any person convicted of a	1924
felony involving dishonesty or breach of trust to participate in	1925
the business of viatical settlements.	1926

(B)(1) Each viatical settlement contract and each application	1927
for a viatical settlement, regardless of the form of transmission,	1928
shall contain the following statement or a substantially similar	1929
statement:	1930

"Any person who knowingly presents false information in an	1931
application for insurance or viatical settlement contract is	1932
guilty of a crime and may be subject to fines and imprisonment."	1933

(2) The lack of a statement as required in division (B)(1) of	1934
this section does not constitute a defense in any prosecution for	1935
a fraudulent viatical settlement act.	1936

(C)(1) Every person engaged in the business of viatical	1937
settlements having knowledge or a reasonable belief that a	1938
fraudulent viatical settlement act is being, will be, or has been	1939
committed shall provide to the superintendent of insurance the	1940
information required by the superintendent. The person shall	1941
provide the information in a manner prescribed by the	1942
superintendent.	1943

(2) Every person having knowledge or a reasonable belief	1944
reason to believe that a fraudulent viatical settlement act is	1945
being, will be, or has been committed may provide to the	1946
superintendent the information required by the superintendent. The	1947
person shall provide the information under this division in a	1948
manner prescribed by the superintendent.	1949

(3) Any life insurer that has a good faith belief that a	1950
person is participating or has participated in a	1951
stranger-originated life insurance transaction shall report the	1952
person to the superintendent in a form and manner prescribed by	1953
the superintendent. Upon receipt of the insurer's report, the	1954
superintendant shall conduct an investigation to determine whether	1955
there is probable cause, based on the totality of the facts and	1956
circumstances that the person has or had engaged in a	1957
stranger-originated life insurance transaction. If the	1958
superintendent finds probable cause, the superintendent shall do	1959
one of the following:	1960

(a) If the person is licensed or regulated by the department	1961
of insurance, the superintendent shall provide the person an	1962
opportunity for notice and hearing pursuant to Chapter 119. of the	1963
Revised Code. If the person waives or does not request a hearing	1964
pursuant to Chapter 119. of the Revised Code, or a hearing is held	1965
and the person is found to have participated in one or more	1966
stranger-originated life insurance transactions, the	1967
superintendent shall publish the order on the department's web	1968
site, and shall notify each insurance company licensed in this	1969
state that the person has been adjudicated as having participated	1970
in one or more stranger-originated life insurance transactions.	1971

(b) If the person is not licensed or regulated by the	1972
department the superintendent shall provide the superintendent's	1973
findings to the appropriate licensing or regulatory authority.	1974

(D)(1) No civil liability shall be imposed on, and no cause	1975
of action shall arise from, a person's furnishing information	1976
concerning suspected, anticipated, or completed fraudulent	1977
viatical settlement acts or suspected or completed fraudulent	1978
insurance acts, if the information is provided to or received from	1979
any of the following:	1980

(a) The superintendent, or the superintendent's employees,	1981
agents, or representatives;	1982

(b) Law enforcement or regulatory officials of this state,	1983
another state, the united statesUnited States, or a political	1984
subdivision of this state or another state, or any employee,	1985
agent, or representative of any of those officials:;	1986

(c) A person involved in the prevention and detection of	1987
fraudulent viatical settlement acts or any agent, employee, or	1988
representative of any person so involved;	1989

(d) The NAIC, national association of securities dealers	1990
(NASD)financial industry regulatory authority (FINRA), the north	1991
americanAmerican securities amdiministratorsadministrators	1992
association (NASAA), any employee, agent, or representative of	1993
any of those associations., or other regulatory body overseeing	1994
life insurance, viatical settlements, securities, or investment	1995
fraud;	1996

(e) The life insurer that issued the life insurance policy or	1997
certificate covering the life of the insured.	1998

(2) The immunity provided in division (D)(1) of this section	1999
shall not apply to any statement made with actual malice. In an	2000
action brought against a person for filing a report or furnishing	2001
other information concerning a fraudulent viatical settlement act	2002
or a fraudulent insurance act, the party bringing the action shall	2003
plead specifically any allegation that the immunity provided in	2004
division (D)(1) of this section does not apply because the person	2005
filing the report or furnishing the information did so with actual	2006
malice.	2007

(3) If a person is the prevailing party in a civil action for	2008
libel, slander, or any other relevant tort arising out of	2009
activities in carrying out the provisions of this chapter, if the	2010
prevailing party is a person identified in division (D)(1) of this	2011
section and the immunity described in that division applies to the	2012
person, and if the party who brought the action was not	2013
substantially justified in doing so, the person who is the	2014
prevailing party is entitled to an award of attorney's fees and	2015
costs arising out of the action. However, the person is not	2016
entitled to an award of attorney's fees if the person provided	2017
information about the person's own fraudulent viatical settlement	2018
acts. For purposes of this division, an action is "substantially	2019
justified" if it had a reasonable basis in law or fact at the time	2020
that it was initiated.	2021

(4) This section does not abrogate or modify any common law	2022
or statutory privilege or immunity enjoyed by a person described	2023
in division (D)(1) of this section.	2024

(E)(1) The documents and evidence provided pursuant to	2025
division (D) of this section or obtained by the superintendent in	2026
an investigation of any suspected or actual fraudulent viatical	2027
settlement act is privileged and confidential, is not a public	2028
record open for inspection under section 149.43 of the Revised	2029
Code, and is not subject to discovery or subpoena in a civil or	2030
criminal action.	2031

(2) Division (E)(1) of this section does not prohibit release	2032
by the superintendent of any document or evidence obtained in an	2033
investigation of suspected or actual fraudulent viatical	2034
settlement acts, in any of the following manners or circumstances:	2035

(a) In any administrative or judicial proceeding to enforce	2036
any laws administeradministered by the superintendent;	2037

(b) To any law enforcement or regulatory agency of this	2038
state, another state, the united statesUnited States, or a	2039
politcalpolitical subdivision of this state or another state, to	2040
an organization established for the purpose of detecting and	2041
preventing fraudulent viatical settlement actacts, or to the NACI	2042
NAIC;	2043

(c) At the discretion of the superintendent, to a person in	2044
the business of viatical settlements that is aggrieved by a	2045
fraudulent viatical settlement act.	2046

(3) Release of documents and evidence under division (E)(2)	2047
of this section does not abrogate or modify the privilege granted	2048
in division (E)(1) of this section.	2049

(F) The provisions of this chapter do not do any of the	2050
following:	2051

(1) Preempt the authority or relieve the duty of any other	2052
law enforcement or regulatory agencies to investigate, examine, or	2053
prosecute suspected violations of law;	2054

(2) Prevent or prohibit a person from disclosing voluntarily	2055
any information concerning fraudulent viatical settlement fraud	2056
acts to a law enforcement or regulatory agency other than the	2057
department of insurance;	2058

(3) Limit any power granted elsewhere by the law of this	2059
state to the superintendent or an insurance fraud unit to	2060
investigate and examine possible violations of law and to take	2061
appropriate action against wrongdoers.	2062

(G)(1) Viatical settlement providers and viatical settlement	2063
brokers shall adopt and have in place antifraud initiatives	2064
reasonably calculated to detect, prosecute, and prevent	2065
fraudulent viatical settlement acts. At the discretion of the	2066
superintendent, the superintendent may order, or a licensee	2067
viatical settlement provider or viatical settlement broker may	2068
request and the superintendent may grant, any modifications of	2069
the following required initiatives described in divisions	2070
(G)(1)(a) and (b) of this section that are necessary to ensure	2071
an effective antifraud program. The modifications may be more or	2072
less restrictive than the required initiatives so long as the	2073
modifications may reasonably be expected to accomplish the	2074
purpose of this section. Antifraud initiatives under this	2075
division shall include all of the following:	2076

(a) Fraud investigators, who may be licensed viatical	2077
settlement provider or licensed viatical settlement broker	2078
employees or independent contractors;	2079

(b) An antifraud plan that includes, but not is not limited	2080
to, all of the following:	2081

(i) A description of the procedures for detecting and	2082
investigating possible fraudulent viatical settlement acts and	2083
procedures for resolving material inconsistencies between medical	2084
records and insurance applications;	2085

(ii) A description of the procedures for reporting possible	2086
fraudulent viatical settlement acts to the superintendent;	2087

(iii) A description of the plan for atifraudantifraud	2088
education and training of underwriters and other personnel;	2089

(iv) A description or charpchart outlining the	2090
organizational arrangement of the antifraud personnel who are	2091
responsible for the investigation and reporting of possible	2092
fraudulent viatical settlement acts and investigating unresolved	2093
material inconsistencies between medical records and insurance	2094
applications;	2095

(v) A description of the procedures used to perform initial	2096
and continuing review of the accuracy of life expectancies used in	2097
connection with a viatical settlement contract.	2098

(2) The superintendent, by rule adopted in accordance with	2099
Chapter 119. of the Revised Code, may require that antifraud plans	2100
required under division (G)(1) of this section be submitted to the	2101
superintendent. If the superintendent requires that antifraud	2102
plans be submitted to the superintendent, the plans so submitted	2103
are privileged and confidential, are not a public record open for	2104
inspection under section 149.43 of the revised codeRevised Code,	2105
and are not subject to discovery or subpoena in a civil or	2106
criminal action.	2107

(H) No insurer that issued a policy being viaticated shall be	2108
responsible, under this chapter, for any act or omission of a	2109
viatical settlement broker or viatical settlement provider	2110
arising out of or in connection with the viatical settlement	2111
transaction unless the insurer receives compensation for the	2112
placement of a viatical settlement contract from the viatical	2113
settlement provider or viatical settlement broker in connection	2114
with the viatical settlement contract.	2115

Sec. 3916.19.  (A) In addition to the penalties and other	2116
enforcement provisions contained in this chapter, if any person	2117
violates any provision of this chapter or any rule or regulation	2118
implementing any provision of this chapter, the superintendent of	2119
insurance may seek an injunction in a court of competent	2120
jurisdiction and may apply for any temporary or permanent order	2121
that the superintendent determines is necessary to restrain the	2122
person from committing the violation.	2123

(B) Any person damaged by any act of a person in violation of	2124
any provision of this chapter may bring a civil action against the	2125
person committing the violation in a court of competent	2126
jurisdiction. A civil action brought under this division does not	2127
preclude the superintendent from exercising any regulatory,	2128
enforcement, or other authority available to the superintendent	2129
under this chapter.	2130

(C) In addition to the penalties and other enforcement	2131
provisions contained in this chapter, any person who violates any	2132
provision of this chapter is subject to a civil penalty of up to	2133
ten thousand dollars per violation. Imposition of civil penalties	2134
described in this division shall be pursuant to an order of the	2135
superintendent issued under Chapter 119. of the Revised Code. The	2136
superintendent's order may require a person found to be in	2137
violation of this chapter to make restitution to persons aggrieved	2138
by violations of this chapter.	2139

(D) Any transaction related to the sale or financing of an	2140
interest or investment in a viatical settlement is subject to	2141
Chapter 1707. of the Revised Code and the rules adopted	2142
thereunder. Nothing in this chapter shall preempt, supersede, or	2143
limit the application of Chapter 1707. of the Revised Code and the	2144
rules adopted thereunder.	2145

Sec. 3916.20.  The superintendent of insurance may adopt	2146
rules in accordance with Chapter 119. of the Revised Code for	2147
purposes of implementing this chapter, including, but not limited	2148
to, rules that do the following:	2149

(A) Govern the relationship and responsibilities of both	2150
insurers and, viatical settlement providers, and viatical	2151
settlement brokers during the viatication of a life insurance	2152
policy or certificate.	2153

(B) Establish standards for evaluating the reasonableness of	2154
payments under viatical settlement contracts for persons with a	2155
terminal or chronic illness or conditionwho are terminally or	2156
chronically ill. This authority includes, but is not limited to,	2157
the regulation of discount rates used to determine the amount	2158
paid in exchange for the assignment, release, transfer, sale,	2159
devise, or bequest of a benefit under a life insurance policy or	2160
certificateinsuring persons who are terminally or chronically	2161
ill.	2162

(C) Establish appropriate licensing requirements, fees, and	2163
standards for continued licensure for viatical settlement	2164
providers and viatical settlement brokers;	2165

(D) Require a bond or other mechanism for ensuring the	2166
financial accountability of viatical settlement providers and	2167
viatical settlement brokers.	2168

Sec. 3916.99.  (A) Whoever violates section 3916.02 of the	2169
Revised Code is guilty of a felony of the third degree.	2170

(B) Whoever violates division (A)(1) of section 3916.18	2171
3916.171 of the Revised Code is guilty of a violation of section	2172
2913.02 of the Revised Code.	2173

Section 2.  That existing sections 1321.72, 1321.78, 3916.01,	2174
3916.02, 3916.03, 3916.05, 3916.06, 3916.07, 3916.09, 3916.10,	2175
3916.11, 3916.12, 3916.13, 3916.14, 3916.15, 3916.16, 3916.17,	2176
3916.18, 3916.19, 3916.20, and 3916.99 of the Revised Code are	2177
hereby repealed.	2178

Section 3. Division (A) of section 3916.02 as amended by this	2179
act shall take effect 90 days after the effective date of this	2180
act.	2181

Section 4. Nothing in Chapter 3916. of the Revised Code as	2182
amended by this act shall be construed as affecting the	2183
incontestability period provided in division (C) of section	2184
3915.05 of the Revised Code.	2185