As Reported by the House Insurance Committee

127th General Assembly Regular Session 2007-2008

Sub. H. B. No. 404

Representatives Hottinger, Barrett 

Cosponsors: Representatives Koziura, Driehaus, DeBose, Fende, Celeste 

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A BILL

To amend sections 3916.01 to 3916.03, 3916.05 to

1

3916.20, and 3916.99 and to enact sections

2

3916.031 and 3916.171 of the Revised Code to

3

make changes to the law governing viatical

4

settlements.

5

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

Section 1. That sections 3916.01, 3916.02, 3916.03, 3916.05,	6
3916.06, 3916.07, 3916.08, 3916.09, 3916.10, 3916.11, 3916.12,	7
3916.13, 3916.14, 3916.15, 3916.16, 3916.17, 3916.18, 3916.19,	8
3916.20, and 3916.99 be amended and sections 3916.031 and	9
3916.171 of the Revised Code be enacted to read as follows:	10

Sec. 3916.01.  As used in this chapter:

11

(A) "Advertising" means any written, electronic, or printed	12
communication or any communication by means of recorded telephone	13
messages or transmitted on radio, television, the internet, or	14
similar communications media, including, but not limited to, film	15
strips, motion pictures, and videos, that is directly or	16
indirectly published, disseminated, circulated, or placed directly	17
or indirectly before the public for the purpose of creating an	18
interest in or inducing a person to purchase or sell, assign,	19
devise, bequest, or transfer the death benefit or ownership of a	20
life insurance policy pursuant to a viatical settlement contract.	21

(B) "Business of viatical settlements" means an activity	22
involved, but not limited to, in the offering, solicitation,	23
negotiation, procurement, effectuation, purchasing, investing,	24
financing, monitoring, tracking, underwriting, selling,	25
transferring, assigning, pledging, or hypothecating or in any	26
other manner acquiring an interest in a life insurance policy by	27
means of viatical settlement contracts or purchase agreements or	28
any similar activity related to viatical settlement contracts or	29
purchase agreements.	30

(C) "Chronically ill" means any of the followinghaving been	31
certified within the proceeding twelve-month period by a licensed	32
health professional as:	33

(1) Being unable to perform, without substantial assistance	34
from another individual, at least two activities of daily living,	35
including, but not limited to, eating, toileting, transferring,	36
bathing, dressing, or continence for at least ninety days due to a	37
loss of functional capacity; or	38

(2) Requiring substantial supervision to protect the	39
individual from threats to health and safety due to severe	40
cognitive impairment; or	41

(3) Having a level of disability similar to that described in	42
division (C)(1) of this section, as determined under regulations	43
prescribed by the United States secretary of the treasury in	44
consultation with the United States secretary of health and human	45
services;.	46

(D) "Escrow agent" means an independent third-party person	47
who, pursuant to a written agreement signed by the viatical	48
settlement provider and viator, provides escrow services related	49
to the acquisition of a life insurance policy pursuant to a	50
viatical settlement contract. "Escrow agent" does not include any	51
person associated, affiliated with, or under the control of a	52
person licensed under this chapter or person described in division	53
(C) of section 3916.02 of the Revised Code.	54

(E)(1) "Financing entity" means an underwriter, placement	55
agent, lender, purchaser of securities, purchaser of a policy or	56
certificate from a viatical settlement provider, credit enhancer,	57
or any other person that has a direct ownership interest in a	58
policy or certificate that is the subject of a viatical settlement	59
contract and to which both of the following apply:	60

(a) Its principal activity related to the transaction is	61
providing funds to effect the viatical settlement or the purchase	62
of one or more viaticated policies.	63

(b) It has an agreement in writing with one or more licensed	64
viatical settlement providers to finance the acquisition of	65
viatical settlement contracts.	66

(2) "Financing entity" does not include a non-accredited	67
investor or viatical settlement purchaser.	68

(E) "Fraudulent viatical settlement act" means an act or	69
omission committed by any person who, knowingly or with intent to	70
defraud and for the purpose of depriving another of property or	71
for pecuniary gain, commits, or permits any of its employees or	72
agents to commit, any of the following acts:	73

(1) Presenting, causing to be presented, or preparing with	74
knowledge or belief that it will be presented to or by a viatical	75
settlement provider, viatical settlement broker, viatical	76
settlement purchaser, financing entity, insurer, insurance	77
broker, insurance agent, or any other person, any false material	78
information, or concealing any material information, as part of,	79
in support of, or concerning a fact material to, one or more of	80
the following:	81

(a) An application for the issuance of a viatical settlement	82
contract or insurance policy or certificate;	83

(b) The underwriting of a viatical settlement contract or	84
insurnace policy or certificate;	85

(c) A claim for payment or benefit pursuant to a viatical	86
settlement contract or insurnace policy or certificate;	87

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

88

(e) Any payments changes in ownership or beneficiary made in	89
accordance with the terms in viatical settlement contract or	90
insurance policy or certificate;	91

(f) The reinstatement or conversion of an insurance policy or	92
certificate;	93

(g) The solicitation, offer, effectuation, or sale of a	94
viatical settlement contract or insurance policy or certificate;	95

(h) The issuance of written evidence of a viatical settlement	96
contract or insurance policy or certificate;	97

(i) A financing transaction.

98

(2) In the furtherance of a fraud or to prevent the detection	99
of a fraud, doing any of the following:	100

(a) Removing, concealing, altering, destroying, or	101
sequestering from the superintendent the assets or records of a	102
licensee or another person engaged in the business of viatical	103
settlements;	104

(b) Misrepresenting or concealing the financial condition of	105
a licensee, financing entity, insurer, or any other person;	106

(c) Transacting the business of viatical settlements in	107
violation of any law of this state requiring a license,	108
certificate of authority, or other legal authority for the	109
transaction of the business of viatical settlements;	110

(d) Filing with the superintendent of insurance or the chief	111
insurance regulatory official of another jurisdiction a document	112
containing false information or otherwise concealing from the	113
superintendent any information about a material fact.	114

(3) Presenting, causing to be presented, or preparing with	115
knowledge or reason to believe that it will be presented, to or by	116
a viatical settlement provider, viatical settlement broker,	117
insurer, insurance agent, financing entity, viatical settlement	118
purchaser, or any other person, in connection with a viatical	119
settlement transaction or insurance transaction, an insurance	120
policy or certificate that the actor knows was fraudulently	121
obtained by the insured, the owner, or any agent of the insured or	122
owner;	123

(4) Committing any embezzlement, theft, misappropriation, or	124
conversion of moneys, funds, premiums, credits or other property	125
of a viatical settlement provider, insurer, insured, viator,	126
insurance policyowner, or any other person engaged in the business	127
of viatical settlements or insurance;	128

(5) Attempting to commit, assisting, aiding or abetting in	129
the commission of, or conspiracy to commit any act or omission	130
specified in divisions (E)(1) to (4) of this section.	131

(F) "Recklessly" has the same meaning as in section 2901.22	132
of the Revised Code.	133

(G) "Defraud" has the same meaning as in section 2913.01 of	134
the Revised Code.	135

(H) "Life expectancy" means an opinion or evaluation as to	136
how long a particular person is going to live.	137

(I) "Life expectancy provider" means a person who determines,	138
or claims to have the necessary education, training, and expertise	139
to determine life expectancies or mortality ratings used to	140
determine life expectancies on behalf of or in connection with any	141
of the following:	142

(1) A viatical settlement provider, viatical settlement	143
broker, or person engaged in the business of viatical settlements;	144

(2) A viatical settlement investment as defined by section	145
1707.01 of the Revised Code;	146

(3) A viatical settlement contract or viatical settlement	147
investment.	148

(J) Notwithstanding section 1.59 of the Revised Code,	149
"person" means a natural person or a legal entity, including, but	150
not limited to, an individual, partnership, limited liability	151
company, limited liability partnership, association, trust,	152
business trust, or corporation.	153

(G)(K) "Policy" means an individual or group policy, group	154
certificate, contract, or arrangement of insurance affecting the	155
rights of a resident of this state or bearing a reasonable	156
relation to this state, regardless of whether delivered or issued	157
for delivery in this state.	158

(H)(L) "Related provider trust" means a titling trust or any	159
other trust established by a licensed viatical settlement provider	160
or a financing entity for the sole purpose of holding ownership or	161
beneficial interest in purchased policies in connection with a	162
financing transaction, provided that the trust has a written	163
agreement with the licensed viatical settlement provider under	164
which the licensed viatical settlement provider is responsible for	165
ensuring compliance with all statutory and regulatory requirements	166
and under which the trust agrees to make all records and files	167
related to viatical settlement transactions available to the	168
superintendent as if those records and files were maintained	169
directly by the licensed viatical settlement provider.	170

(I)(M) "Special purpose entity" means a corporation,	171
partnership, trust, limited liability company or other similar	172
entity formed solely to provide access, either directly or	173
indirectly, to institutional capital markets for a financing	174
entity or licensed viatical settlement provider or in connection	175
with a transaction in which the securities in the special purpose	176
entity are acquired by qualified institutional buyers.	177

(J)(N) "Terminally ill" means certified by a physician as	178
having an illness or sicknessphysical condition that can	179
reasonably be expected to result in death in twenty-four months	180
or less.	181

(K)(O) "Viatical settlement broker" means a person that, on	182
behalf of a viator and for a fee, commission, or other valuable	183
consideration, offers or attempts to negotiate viatical	184
settlements between a viator and one or more viatical settlement	185
providers or viatical settlement brokers. "Viatical settlement	186
broker" does not include an attorney, a certified public	187
accountant, or a financial planner accredited by a nationally	188
recognized accreditation agency, who is retained to represent the	189
viator and, whose compensation is not paid directly or indirectly	190
by the viatical settlement provider or purchaser, provided the	191
viatical settlement activities are incidental to the professional	192
practice of the attorney, certified public accountant, or	193
financial planner.	194

(L)(P)(1) "Viatical settlement contract" means any of the	195
following:	196

(1)(a) A written agreement establishingbetween a viator and	197
a viatical settlement provider or any affiliate of the viatical	198
settlement provider that establishes the terms under which	199
compensation or any thing of value, that is less than the expected	200
death benefit of the insurance policy is or certificate will be	201
paid in return for the viator's present or future assignment,	202
transfer, sale, release, devise, or bequest of the death benefit	203
or ownership of any portion of the insurance policy or	204
certificate of insuranceany beneficial interest in the policy or	205
its ownership;	206

(2) A contract for a loan or any other financing transaction	207
secured primarily by an individual or group life insurance policy	208
or certificate, other than a loan by a life insurance company	209
pursuant to the terms of the life insurance contract or a loan	210
secured by the cash value of a policy or certificate;	211

(3) An agreement to transfer ownership or change the	212
beneficiary designation of the policy or certificate at a later	213
date, regardless of the date that compensation is paid to the	214
viator(b) The transfer or acquisition for compensation or	215
anything of value for ownership or beneficial interest in a trust	216
or other person that owns such a policy if the trust or other	217
person was formed or availed of for the principal purpose of	218
acquiring one or more life insurance policies;	219

(c) A written agreement for a loan or other lending	220
transaction, secured primarily by an individual life insurance	221
policy or an individual certificate of a group life insurance	222
policy;	223

(d) A premium finance loan made for a life insurance policy	224
by a lender to a viator on, before, or after the date of issuance	225
of the policy in either of the following situations:	226

(i) The viator or the insured receives a guarantee of the	227
viatical settlement value of the policy.	228

(ii) The viator or the insured agrees to sell the policy or	229
any portion of the policy's death benefit on any date before or	230
after the issuance of the policy.	231

(2) "Viatical settlement contracts" include but are not	232
limited to contracts that are commonly termed "life settlement	233
contracts" and "senior settlement contracts."	234

(3) "Viatical settlement contract" does not include any of	235
the following unless part of a plan, scheme, device, or artifice	236
to avoid the application of this chapter:	237

(a) A policy loan or accelerated death benefit made by the	238
insurer pursuant to the policy's terms whether issued with the	239
original policy or a rider;	240

(b) Loan proceeds that are used solely to pay premiums for	241
the policy and the costs of the loan including interest,	242
arrangement fees, utilization fees and similar fees, closing	243
costs, legal fees and expenses, trustee fees and expenses, and	244
third-party collateral provider fees and expenses, including fees	245
payable to letter of credit issuers;	246

(c) A loan made by a regulated financial institution in which	247
the lender takes an interest in a life insurance policy solely to	248
secure repayment of a loan or, if there is a default on the loan	249
and the policy is transferred, the transfer of such a policy by	250
the lender, provided that neither the default itself nor the	251
transfer is pursuant to an agreement or understanding with any	252
other person for the purpose of evading regulation under this	253
chapter;	254

(d) A premium finance loan made by a lender that does not	255
violate sections 1321.71 to 1321.83 of the Revised Code, if the	256
premium finance loan is not described in division (P)(3)(b) of	257
this section;	258

(e) An agreement where all parties are closely related to the	259
insured by blood or law or have a lawful substantial economic	260
interest in the continued life, health, and bodily safety of the	261
person insured, or are persons or trusts established primarily for	262
the benefit of such parties;	263

(f) Any designation, consent, or agreement by an insured who	264
is an employee of an employer in connection with the purchase by	265
the employer, or trust established by the employer, of life	266
insurance on the life of the employee as described in section	267
3911.091 of the Revised Code;	268

(g) Any of the following business succession planning	269
arrangements if those arrangements are bona fide arrangements:	270

(i) An arrangement between one or more shareholders in a	271
corporation or between a corporation and one or more of its	272
shareholders or one or more persons or trusts established by its	273
shareholders;	274

(ii) An arrangement between one or more partners in a	275
partnership or between a partnership and one or more of its	276
partners or one or more trusts established by its partners;	277

(iii) An arrangement between one or more members in a limited	278
liability company or between a limited liability company and one	279
or more of its members or one or more trusts established by its	280
members.	281

(h) An agreement entered into by a service recipient, a trust	282
established by the service recipient and a service provider, or a	283
trust established by the service provider who performs significant	284
services for the service recipient's trade or business;	285

(i) Any other contract, transaction, or arrangement exempted	286
from the definition of viatical settlement contract by rule	287
adopted by the superintendent of insurance based on the	288
superintendent's determination that the contract, transaction, or	289
arrangement is not of the type regulated by this chapter.	290

(M)(Q)(1) "Viatical settlement provider" means a person,	291
other than a viator, that enters into or effectuates a viatical	292
settlement contract.	293

(2) "Viatical settlement provider" does not include any of	294
the following:	295

(a) A bank, savings bank, savings and loan association,	296
credit union, or other regulated financial institution that takes	297
an assignment of a life insurance policy solely as a collateral	298
for a loan;	299

(b) A premium finance company exempted under section 1321.72	300
of the Revised Code from the licensure requirements of section	301
3921.73 of the Revised Code that takes an assignment of a life	302
insurance policy or certificate solely as collateral for a premium	303
finance loan;	304

(b)(c) The issuer of a life insurance policy or certificate	305
providing accelerated benefits as defined in section 3915.21 of	306
the Revised Code and pursuant to the contract;	307

(c)(d) An individual who enters into or effectuates not more	308
than one agreementviatical settlement contract in any calendar	309
year for the transfer of life insurance policies or certificates	310
for any value less than the expected death benefit;	311

(d)(e) An authorized or eligible insurer that provides stop	312
loss coverage or financial guarantee insurance to a viatical	313
settlement provider, purchaser, financing entity, special purpose	314
entity, or related provider trust;	315

(e)(f) A financing entity;

316

(f)(g) A special purpose entity;

317

(g)(h) A related provider trust;

318

(h)(i) A viatical settlement purchaser;

319

(j) Any other person the superintendent determines is not	320
consistent with the definition of viatical settlement provider.	321

(N)(R) "Viaticated policy" means a life insurance policy or	322
certificate that has been acquired by a viatical settlement	323
provider pursuant to a viatical settlement contract.	324

(O)(S) "Viator" means the owner of a life insurance policy or	325
a certificate holder under a group policy that has not previously	326
been viaticated who, in return for compensation or any thing of	327
value that is less than the expected death benefit of the policy	328
or certificate, assigns, transfers, sells, devises, or bequests	329
the death benefit or ownership of any portion of the insurance	330
policy or certificate of insurance. For the purposes of this	331
chapter, a "viator" is not limited to an owner of a life insurance	332
policy or a certificate holder under a group policy insuring the	333
life of an individual with a terminal or chronic illness or	334
condition except where specifically addressed. "Viator" does not	335
include any of the following:	336

(1) A licensee under this chapter;

337

(2) An accredited investor orA qualified institutional buyer	338
as defined respectively in Regulation D, Rule 501 or Rule 144A of	339
the Securities Act of 1933, as amended;	340

(3) A financing entity;

341

(4) A special purpose entity;

342

(5) A related provider trust or person.

343

(P)(T) "Viatical settlement purchaser" means a person who	344
givesprovides a sum of money as consideration for a life	345
insurance policy or an interest in the death benefits of a life	346
insurance policy that has been or will be the subject of a	347
viatical settlement contract, or a person who owns, acquires, or	348
is entitled to a beneficial interest in a trust that owns a	349
viatical settlement contract or is the beneficiary of a life	350
insurance policy that has been or will be the subject of a	351
viatical settlement contract, for the purpose of deriving an	352
economic benefit. "Viatical settlement purchaser" does not include	353
any of the following:	354

(1) A licensee under this chapter;

355

(2) An accredited investor orA qualified institutional buyer	356
as defined respectively in Regulation D, Rule 501 or Rule 144A of	357
the Securities Act of 1933, as amended;	358

(3) A financing entity;

359

(4) A special purpose entity;

360

(5) A related provider trust.

361

(Q)(U) "Qualified institutional buyer" has the same meaning	362
as in 17 C.F.R. 230.144A as that regulation exists on the	363
effective date of this amendment.	364

(V) "Licensee" means a person licensed as a viatical	365
settlement provider, viatical settlement broker, or life	366
expectancy provider under this chapter.	367

(R)(W) "NAIC" means the national association of insurance	368
commissioners.	369

(S) "Securities Act of 1933" has the same meaning as in	370
section 1707.01 of the Revised Code(X) "Regulated financial	371
institution" means a bank, a savings association, or credit union	372
operating under authority granted by the superintendent of	373
financial institutions, the regulatory authority of any other	374
state of the United States, the office of thrift supervision, the	375
national credit union administration, or the office of the	376
comptroller of the currency.	377

(Y)(1) "Stranger-originated life insurance," or "STOLI,"	378
means a plan or agreement that provides for both of the following	379
at the time of the origination of a life insurance policy:	380

(a) The purchase of a life insurance policy by an applicant	381
primarily for the benefit of a third party investor that lacks	382
insurable interest in the insured person;	383

(b) The subsequent accrual, directly or indirectly, to that	384
third party investor of the legal or beneficial ownership of the	385
policy or the benefits of the policy.	386

(2) "Stranger-originated life insurance" does not include	387
viatical settlement transactions specifically permitted by this	388
chapter.	389

Sec. 3916.02. No(A) Notwithstanding division (C) of this	390
section, no person shall operate in this state as a viatical	391
settlement provider or, viatical settlement broker, or life	392
expectancy provider without first having obtained a license from	393
the superintendent of insurance and, if different fromthe owner	394
of the insurance policy to be viaticated is not a resident of this	395
state, from the comparable official of the state of residence of	396
the viatorowner. If	397

(B)(1) If there is more than one viatorowner on a single	398
policy or certificate and the viatorsowners are residents of	399
different states, the viatical settlement shall be governed by	400
the law of the state in which the viatorowner having the largest	401
percentage ownership of the policy or certificate resides or, if	402
the viatorsowners hold equal ownership, the state of residence	403
of one viatorowner agreed upon in writing by all viatorsowners.	404

(2) If the viator is a resident of this state, all agreements	405
to be signed by the viator shall provide exclusive jurisdiction to	406
courts of this state and the laws of this state shall govern the	407
agreements. Nothing in the agreements shall abrogate the viator's	408
right to a trial by jury.	409

(C)(1) A person who represents the viator and is not	410
compensated directly or indirectly by the viatical settlement	411
provider, who is licensed as an attorney, certified public	412
accountant, or financial planner accredited by a nationally	413
recognized accreditation agency may negotiate viatical settlement	414
contracts on behalf of a viator without obtaining a license	415
pursuant to division (A) of this section if the viatical	416
settlement activities are incidental to the professional practice	417
of the attorney, certified public accountant, or financial	418
planner.	419

(2) An individual insurance agent, in good standing, who has	420
been licensed as a resident or nonresident insurance agent with a	421
life line of authority in this state for at least five years may	422
operate as a viatical settlement broker without obtaining a	423
license pursuant to division (A) of this section if the viatical	424
settlement broker activities of the insurance agent are	425
incidental to the insurance agent's insurance business	426
activities.	427

Sec. 3916.03.  (A) An applicant for a license as a viatical	428
settlement provider or, viatical settlement broker, or life	429
expectancy provider shall submit an application for the license in	430
a manner prescribed by the superintendent of insurance. The	431
application shall be accompanied by a fee established by the	432
superintendent by rule adopted in accordance with chapterChapter	433
119. of the Revised Code.	434

(B) A license issued under this chapter to a person other	435
than an individual authorizes all partners, officers, members, or	436
designated employees of the person to act as viatical settlement	437
providers or viatical settlement brokers, as applicable, and all	438
those partners, officers, members, or designated employees shall	439
be named in the application and any supplements to the	440
application.	441

(C) Upon the filing of an application under this section and	442
the payment of the license fee, the superintendent shall make an	443
investigation of the applicant and issue to the applicant a	444
license that states in substance that the person is authorized to	445
act as a viatical settlement provider or, viatical settlement	446
broker, or life expectancy provider, as applicable, if all of the	447
following apply:	448

(1) Regarding an application for a license as a viatical	449
settlement provider, the applicant provides aall of the	450
following:	451

(a) A detailed plan of operation;

452

(b) Evidence of financial responsibility in a format	453
prescribed by the superintendent by possessing a minimum equity of	454
not less than two hundred fifty thousand dollars in cash or cash	455
equivalents reflected in the applicant's audited financial	456
statements. In lieu of the minimum equity requirement, a viatical	457
settlement provider with positive equity shall provide either a	458
surety bond executed and issued by an insurer licensed in this	459
state or an irrevocable line of credit in the amount of two	460
hundred fifty thousand dollars;	461

(c) A general description of the method the applicant will	462
use to determine life expectancies, including a description of the	463
applicant's intended receipt of life expectancies, the applicant's	464
intended use of life expectancies, the applicant's intended use of	465
life expectancy providers, and a written plan of policies and	466
procedures used to determine life expectancies.	467

(2) The superintendent finds all of the following:

468

(a) The applicant is competent and trustworthy and intends to	469
act in good faith in the capacity of a viatical settlement	470
provider or, viatical settlement broker, or life expectancy	471
provider, as applicable.	472

(b) The applicant has a good business reputation and has had	473
experience, training, or education so as to be qualified to act in	474
the capacity of a viatical settlement provider or, viatical	475
settlement broker, or life expectancy provider, as applicable.	476

(3) If the applicant is a person other than an individual,	477
the applicant provides a certificate of good standing from the	478
state of its domicile.	479

(4) The applicant provides an antifraud plan that meets the	480
requirements of division (G) of section 3916.18 of the Revised	481
Code.	482

(D)(1) The superintendent may require an applicant to provide	483
proof of financial responsibility in a format prescribed by the	484
superintendent through either of the following means:	485

(a) A surety bond executed and issued by an insurer	486
authorized to issue surety bonds in this state. The bond shall be	487
in favor of this state and shall authorize recovery by the	488
superintendent on behalf of any person in this state who sustains	489
damages as a result of an erroneous act, failure to act,	490
conviction of fraud or conviction of unfair practices committed by	491
a licensee.	492

(b) A deposit of cash, certificates of deposit, or securities	493
in any combination.	494

(2) If an applicant is licensed as a viatical settlement	495
provider, viatical settlement broker, or life expectancy provider	496
in another state, the superintendent may accept as valid any	497
similar proof of financial responsibility the applicant filed in	498
that state.	499

(3) The superintendent may request proof of financial	500
responsibility at any time the superintendent considers necessary.	501

(E) An applicant shall provide all information requested by	502
the superintendent. The superintendent may, at any time, require	503
an applicant to fully disclose the identity of all stockholders,	504
partners, officers, members, and employees, and may, in the	505
exercise of the superintendent's discretion, refuse to issue a	506
license to an applicant that is not an individual if the	507
superintendent is not satisfied that each officer, employee,	508
stockholder, partner, or member who may materially influence the	509
applicant's conduct meets the standards set forth in this chapter.	510

(E)(F) Except as otherwise provided in this division, a	511
license as a viatical settlement provider or, viatical settlement	512
broker, or life expectancy provider expires on the last day of	513
March next after its issuance or continuance. A license as a	514
viatical settlement provider or, viatical settlement broker, or	515
life expectancy provider may, in the discretion of the	516
superintendent and the payment of an annual renewal fee	517
established by the superintendent by rule adopted in accordance	518
with chapterChapter 119. of the Revised Code, be continued past	519
the last day of March next after its issue and after the last day	520
of March in each succeeding year. Failure to pay the renewal fee	521
by the required date results in the expiration of the license	522
without a hearing under Chapter 119. of the Revised Code.	523

(F)(G) Any individual licensed as a viatical settlement	524
broker shall complete not less than fifteen hours of continuing	525
education biennially. The superintendent shall approve continuing	526
education courses that shall be related to viatical settlements	527
and viatical settlement transactions. The superintendent shall	528
adopt rules for the enforcement of this division.	529

(H) The superintendent shall not issue a license to a	530
nonresident applicant, unless either of the following applies:	531

(1) The applicant files and maintains a written designation	532
of an agent for service of process with the superintendent.	533

(2) The applicant has filed with the superintendent the	534
applicant's written irrevocable consent that any action against	535
the applicant may be commenced against the applicant by service of	536
process on the superintendent.	537

(G)(I) A viatical settlement provider or, viatical settlement	538
broker, or life expectancy provider shall provide to the	539
superintendent new or revised information regarding any change in	540
its officers, any stockholder owning ten per cent or more of its	541
stockholdersstock, or its partners, directors, members, or	542
designated employees within thirty days of the change.	543

(H)(J) Any fee collected under this section shall be paid	544
into the state treasury to the credit of the department of	545
insurance operating fund created by section 3901.021 of the	546
Revised Code.	547

Sec. 3916.031. Any corporation, partnership, or other	548
business that is licensed as a viatical settlement broker shall	549
maintain at least one designated individual who is individually	550
licensed as a viatical settlement broker to be responsible for the	551
business's compliance with this chapter.	552

Sec. 3916.05.  (A) A person shall not use a viatical	553
settlement contract form or provide a disclosure statement form to	554
a viator in this state unless the viatical settlement contract	555
form or the disclosure statement form is filed with and approved	556
by the superintendent of insurance. The superintendent shall	557
disapprove a viatical settlement contract form or a disclosure	558
statement form if, in the superintendent's opinion, the viatical	559
settlement contract form, the disclosure statement form, or any	560
provision contained therein fails to meet the requirements of	561
section 3916.06 of the Revised Code, is unreasonable, is contrary	562
to the interests of the public, or is otherwise misleading or	563
unfair to the viator. At the superintendent's discretion, the	564
superintendent may require the submission of advertising material	565
to which section 3916.17 of the Revised Code applies.	566

(B) The superintendent may adopt rules in accordance with	567
Chapter 119. of the Revised Code to establish reasonable fees for	568
any service or transaction performed by the department of	569
insurance pursuant to division (A) of this section. Any fee	570
collected pursuant to those rules shall be paid into the state	571
treasury to the credit of the department of insurance operating	572
fund created by section 3901.021 of the Revised Code.	573

Sec. 3916.06.  (A)(1) With each application for a viatical	574
settlement, a viatical settlement provider or viatical settlement	575
broker shall disclose at least the following to a viator no later	576
than the time all parties sign the application for the viatical	577
settlement contract:	578

(a) That there are possible alternatives to viatical	579
settlement contracts, including any accelerated death benefits	580
offered under the viator's life insurance policy or certificate;	581

(b) That some or all of the proceeds of the viatical	582
settlement may be subject to federal income taxation and state	583
franchise and income taxation, and that assistance should be	584
sought from a professional tax advisor;	585

(c) That the proceeds of the viatical settlement could be	586
subject to the claims of creditors;	587

(d) That receipt of the proceeds of the viatical settlement	588
may adversely affect the viator's eligibility for medical	589
assistance under Chapter 5111. of the Revised Code or other	590
government benefits or entitlements, and that advice should be	591
obtained from the appropriate government agencies;	592

(e) That the viator has a right to rescind the viatical	593
settlement contract for at least fifteenby providing notice of	594
rescission and repaying all viatical settlement proceeds paid to	595
the viator pursuant to the escrow agreement within sixty calendar	596
days after all parties sign the viatical settlement contract or	597
thirty calendar days after the viator receives the viatical	598
settlement proceeds, as provided in section 3916.08 of the	599
Revised Code, whichever is sooner. If the insured dies during the	600
rescission period, the viatical settlement contract shall be	601
deemed to have been rescinded, subject to repayment by the viator	602
or the viator's estate of all viatical settlement proceeds to the	603
viatical settlement companyprovider within sixty days of the	604
death of the insured.	605

(f) That funds will be sent to the viator within three	606
business days after the viatical settlement provider has received	607
written acknowledgment from the insurer or group administrator	608
that ownership of the policy or interest in the certificate has	609
been transferred and that the beneficiary has been designated	610
pursuant to the viatical settlement contract;	611

(g) That entering into a viatical settlement contract may	612
cause other rights or benefits, including conversion rights and	613
waiver of premium benefits that may exist under the policy or	614
certificate, to be forfeited by the viator and that assistance	615
should be sought from a financial advisor.	616

(h) That following execution of the viatical settlement	617
contract, the viatical settlement provider, the viatical	618
settlement broker, or the authorized representative of the	619
viatical settlement provider or viatical settlement broker may	620
contact the insured for the purpose of determining the insured's	621
health status and to confirm the insured's residential or	622
business address and telephone number or for other purposes	623
permitted by law. Any such contact shall be limited to once in	624
any three-month period if the insured has a life expectancy of	625
more than one year or to once per month if the insured has a life	626
expectancy of one year or less.	627

(2) The viatical settlement provider or viatical settlement	628
broker shall provide the disclosures under division (A)(1) of	629
this section in a separate document that is signed by the viator	630
and the viatical settlement provider or viatical settlement	631
broker.	632

(3) Disclosure to a viator under division (A)(1) of this	633
section shall include distribution of a brochure describing the	634
process of viatical settlements. The viatical settlement provider	635
or viatical settlement broker shall use the NAIC's form for the	636
brochure unless another one is developed or approved by the	637
superintendent.	638

(4) The disclosure document under division (A)(1) of this	639
section shall contain the following language:	640

"All medical, financial, or personal information solicited or	641
obtained by a viatical settlement provider or viatical settlement	642
broker about an insured, including the insured's identity or the	643
identity of family members, a spouse, or a significant other may	644
be disclosed as necessary to effect the viatical settlement	645
between the viator and the viatical settlement provider. If you	646
are asked to provide this information, you will be asked to	647
consent to the disclosure. The information may be provided to	648
someone who buys the policy or provides funds for the purchase.	649
You may be asked to renew your permission to share information	650
every two years."	651

(B)(1) A viatical settlement provider shall disclose at	652
least the following to a viator prior to the date the viatical	653
settlement contract is signed by all the necessary parties:	654

(a) The affiliation, if any, between the viatical settlement	655
provider and the issuer of the insurance policy or certificate to	656
be viaticated;	657

(b) The name, business address, and telephone number of the	658
viatical settlement provider;	659

(c) Regarding a viatical settlement broker, the amount and	660
method of calculating the broker's compensation. As used in this	661
division, "compensation" includes anything of value paid or given	662
to a viatical settlement broker for the placement of a policy or	663
certificate.Any affiliations or contractual arrangements between	664
the viatical settlement provider and the viatical settlement	665
purchaser;	666

(d) If an insurance policy or certificate to be viaticated	667
has been issued as a joint policy or certificate or involves	668
family riders or any coverage of a life other than the insured	669
under the policy or certificate to be viaticated, the possible	670
loss of coverage on the other lives under the policy or	671
certificate and that advice should be sought from the viator's	672
insurance produceragent or the company issuing the policy or	673
certificate;	674

(e) The dollar amount of the current death benefit payable to	675
the viatical settlement provider under the policy or certificate,	676
and, if known, the availability of any additional guaranteed	677
insurance benefits, the dollar amount of any accidental death and	678
dismemberment benefits under the policy or certificate, and the	679
viatical settlement provider'sextent to which the viator's	680
interest in those benefits will be transferred as a result of the	681
viatical settlement contract.	682

(f) The name, business address, and telephone number of the	683
independent third-party escrow agent, and the fact that the	684
viator or owner may inspect or receive copies of the relevant	685
escrow or trust agreements or documentsThat an escrow agent	686
shall provide escrow services to the parties pursuant to a written	687
agreement, signed by the viatical settlement provider, the	688
viatical settlement broker, and the viator. At the close of	689
escrow, the escrow agent will distribute the proceeds of the sale	690
to the viator, minus any compensation to be paid to any other	691
persons who provided services and to whom the viator has agreed to	692
compensate out of the gross amount offered by the viatical	693
settlement purchaser. All persons receiving any form of	694
compensation under the escrow agreement shall be clearly	695
identified, including name, business address, telephone number,	696
and tax identification number.	697

(2) The viatical settlement broker shall disclose at least	698
the following to a viator prior to the date the viatical	699
settlement contract is signed by all the necessary parties:	700

(a) The name, business address, and telephone number of the	701
viatical settlement broker;	702

(b) A full, complete, and accurate description of all offers,	703
counteroffers, acceptances, and rejections relating to the	704
proposed viatical settlement contract;	705

(c) Any affiliations or contractual agreements between the	706
viatical settlement broker and any person making an offer in	707
connection with the proposed viatical settlement contract;	708

(d) The amount and method of calculating the viatical	709
settlement broker's compensation and, if any portion of the	710
viatical settlement broker's compensation is taken from the	711
viatical settlement offer, the total amount of the viatical	712
settlement offer and the viatical settlement broker's	713
compensation as a percentage of that total. As used in this	714
division, "compensation" includes anything of value paid or given	715
to a viatical settlement broker related to the settlement of a	716
policy.	717

(3) The viatical settlement provider or viatical	718
settlement broker shall conspicuously display the disclosures	719
required under divisiondivisions (B)(1) and (2) of this section	720
in the viatical settlement contract or in a separate document	721
signed by the viator and the viatical settlement provider or	722
viatical settlement broker, as appropriate.	723

(C) If the viatical settlement provider transfers ownership	724
or changes the beneficiary of the insurance policy or	725
certificate, the viatical settlement provider shall communicate	726
in writing the change in ownership or beneficiary to the insured	727
within twenty days after the change.	728

(D) If, for the purpose of engaging in the business of	729
viatical settlements, a viatical settlement broker or viatical	730
settlement provider is party to a plan, transaction, or series	731
of transactions to originate, renew, continue, or finance a life	732
insurance policy with the insurer that issued the policy within	733
the first five years of the issuance of that policy, the	734
viatical settlement broker or viatical settlement provider shall	735
fully disclose the plan, transaction, or series of transactions	736
to that insurer prior to the initiation of the plan,	737
transaction, or series of transactions.	738

Sec. 3916.07.  (A) A viatical settlement provider entering	739
into a viatical settlement contract shall first obtain all of the	740
following:	741

(1) If the viator is the insured, a written statement from an	742
attending physician that the viator is of sound mind and under no	743
constraint or undue influence to enter into a viatical settlement	744
contract. As used in this division, "physician" means a person	745
authorized under Chapter 4731. of the Revised Code to practice	746
medicine and surgery or osteopathic medicine and surgery.	747

(2) A document in which the insured consents in writing, as	748
required by division (E) of section 3916.13 of the Revised Code,	749
to the release of the insured's medical records to a viatical	750
settlement provider or viatical settlement broker and to the	751
insurance company that issued the life insurance policy or	752
certificate covering the life of the insured.	753

(B) Within twenty days after a viator executes documents	754
necessary to transfer any rights under an insurance policy or	755
certificate or within twenty days of entering any expressed or	756
implied agreement, option, promise, or other form of understanding	757
to viaticate the policy, the viatical settlement provider shall	758
give written notice to the insurer that issued that insurance	759
policy or certificate that the policy or certificate has or will	760
become a viaticated policy or certificate. The notice shall be	761
accompanied by the documents required by division (C) of this	762
section.	763

(C) The viatical settlement provider shall deliver a copy of	764
the medical release required under division (A)(2) of this	765
section, a copy of the viator's application for the viatical	766
settlement contract, the notice required under division (B) of	767
this section, and a request for verification of coverage to the	768
insurer that issued the life insurance policy or certificate that	769
is the subject of the viatical transaction. The viatical	770
settlement provider shall use the NAIC's form for verification of	771
coverage unless standards for verification areanother form is	772
developed or approved by the superintendent of insurance.	773

(D) The insurer shall respond to a request for verification	774
of coverage submitted on an approved form by a viatical	775
settlement provider or viatical settlement broker within thirty	776
calendar days after the date the request is received and shall	777
indicate whether, based on the medical evidence and documents	778
provided, the insurer intends to pursue an investigation at that	779
time regarding possible fraud or the validity of the life	780
insurance contract or certificate that is the subject of the	781
request. The insurer shall accept an original or facsimile or	782
electronic copy of such request and any accompanying	783
authorization signed by the viator.	784

(E) Prior to or at the time of execution of the viatical	785
settlement contract, the viatical settlement provider shall	786
obtain a witnessed document in which the viator consents to the	787
viatical settlement contract, represents that the viator has a	788
full and complete understanding of the viatical settlement	789
contract and a full and complete understanding of the benefits of	790
the life insurance policy or certificate, and acknowledges that	791
the viator is entering into the viatical settlement contract	792
freely and voluntarily and, for persons with a terminal or chronic	793
illness or condition, acknowledges that the insured has a terminal	794
or chronic illness and that the terminal or chronic illness or	795
condition was diagnosed after the life insurance policy or	796
certificate was issued.	797

(F) If a viatical settlement broker performs any of the	798
activities specified in this section on behalf of the viatical	799
settlement provider, the viatical settlement provider is deemed	800
to have fulfilled the requirements of this section.	801

(G) All medical information solicited or obtained by any	802
licensee shall be subject to the applicable provisions of state	803
law relating to confidentiality of medical information.	804

Sec. 3916.08. (A) Each viatical settlement contract entered	805
into in this state shall provide the viator with an unconditional	806
absolute right to rescind the contract for at least fifteenby	807
providing notice of rescission and repaying all viatical	808
settlement proceeds paid to the viator pursuant to the escrow	809
agreement within sixty calendar days after all parties sign the	810
viatical settlement contract or thirty calendar days after the	811
receipt of the viatical settlement proceeds pursuant to division	812
(A) of section 3916.09 of the Revised Code, whichever is sooner.	813
If the insured dies during the rescission period, the viatical	814
settlement contract is deemed to have been rescinded, subject to	815
repayment of all viatical settlement proceeds to the viatical	816
settlement provider within sixty days of the death of the	817
insured. If	818

(B) If the viator rescinds the viatical settlement contract	819
and any compensation has been paid to any person under the terms	820
of the escrow agreement, including the viatical settlement	821
provider, the viatical settlement broker, or any insurance agent,	822
the person that received the compensation shall refund the full	823
amount received to the viatical settlement provider within five	824
business days following receipt of written notice from the	825
viatical settlement provider. The notice shall include a copy of	826
the viator's notice of rescission or the notice of the death of	827
the viator.	828

(C) If a viatical settlement contract is rescinded by the	829
viator pursuant to this section, ownership of the insurance policy	830
or certificate reverts to the viator or to the viator's estate if	831
the viator is deceased, irrespective of any transfer of ownership	832
of the policy or certificate by the viator, viatical settlement	833
provider, or any other person.	834

Sec. 3916.09.  (A) The viatical settlement provider shall	835
instruct the viator to send the executed documents required to	836
effect the change in ownership, assignment, or change in	837
beneficiary directly to the independent escrow agent. Within three	838
business days after the date the escrow agent receives the	839
documents, or from the date the viatical settlement provider	840
receives the documents if the viator erroneously provides the	841
documents directly to the viatical settlement provider, the	842
viatical settlement provider shall pay or transfer the proceeds of	843
gross amount paid by the viatical settlement purchaser to anthe	844
escrow oragent for deposit in a trust account set up for that	845
purpose by the escrow agent in a state or federally chartered	846
regulated financial institution whose deposits are insured by	847
the federal deposit insurance corporation. Upon payment of the	848
settlement proceeds into the escrow or trust account, the escrow	849
agent or trustee shall deliver the original change in ownership,	850
assignment, or change in beneficiary forms to the viatical	851
settlement provider, a representative of the viatical settlement	852
provider, or related provider trust. Upon the licensed	853
provider'sescrow agent's receipt of the acknowledgment of the	854
properly completed transfer of ownership, assignment, or	855
designation of beneficiary from the insurance company, the	856
licensed providerescrow agent shall instruct the escrow agent to	857
pay the settlement proceeds to the viator and any other person	858
pursuant to the viatical settlement contract and the escrow	859
agreement. The escrow agent shall make payment within three	860
business days of the date the provider received the acknowledged	861
forms from the insurance companyFunds are considered sent by a	862
viatical settlement provider to a viator as of the date that the	863
escrow agent either releases the funds for wire transfer to the	864
viator or places a check for delivery to the viator via United	865
States postal service or other nationally recognized delivery	866
service.	867

(B) Failure to transfer the proceeds to the viator within the	868
period of time disclosed pursuant to division (A)(1)(f) of section	869
3916.06 of the Revised Code renders the viatical settlement	870
contract voidable by the viator for lack of consideration until	871
the time consideration is tendered to and accepted by the viator.	872
If a viatical settlement contract is voided by the viator pursuant	873
to this division, ownership of the insurance policy or certificate	874
reverts to the viator or to the viator's estate if the viator is	875
deceased, irrespective of any transfer of ownership of the policy	876
or certificate by the viator, viatical settlement provider, or	877
any other person.	878

Sec. 3916.10.  After a viatical settlement has occurred,	879
contact with the insured for the purpose of determining the health	880
status of the insured by the viatical settlement provider or	881
viatical settlement broker shall be made only by the viatical	882
settlement provider or, viatical settlement broker licensed in	883
this state, or the authorized representative of the viatical	884
settlement provider or viatical settlement broker. The viatical	885
settlement provider or, viatical settlement broker, or	886
authorized representative shall not contact the insured for the	887
purpose of determining the insured's health status more than once	888
every three months if the insured has a life expectancy of more	889
than one year, or more than once per month if the insured has a	890
life expectancy of one year or less. The viatical settlement	891
provider or viatical settlement broker shall explain the	892
procedure for making these contacts at the time the viatical	893
settlement contract is entered into.	894

The limitations set forth in this section do not apply to	895
contacts made with an insured under a viaticated policy for	896
purposes other than to determine the insured's health status.	897

Viatical settlement providers and viatical settlement	898
brokers are responsible for the actions of their authorized	899
representatives, for the purposes of this section.	900

Sec. 3916.11.  (A)(1) A licensee under this chapter shall,	901
for five years, retain copies of all of the following:	902

(a) All proposed, offered, or executed contracts, purchase	903
agreements, underwriting documents, policy forms, and applications	904
from the date of the proposal, offer, or execution of the contract	905
or purchase agreement, whichever is later;	906

(b) All checks, drafts, or other evidence and documentation	907
related to the payment, transfer, deposit, or release of funds	908
from the date of the transaction;	909

(c) All other records and documents related to the	910
requirements of this chapter.	911

(2) This section does not relieve a person of the obligation	912
to produce the documents described in division (A)(1) of this	913
section to the superintendent of insurance after the retention	914
period specified in that division has expired if the person has	915
retained the documents.	916

(3) Records required to be retained by this section must be	917
legible and complete and may be retained in paper, photograph,	918
microprocess, magnetic, mechanical, or electronic media, or by any	919
process that accurately reproduces or forms a durable medium for	920
the reproduction of a record.	921

(4) If a licensee fails to comply with division (A) of this	922
section, the superintendent may initiate proceedings in accordance	923
with Chapter 119. of the Revised Code to revoke, suspend, or	924
refuse to renew the license of the licensee.	925

(B)(1) Upon determining that an examination should be	926
conducted, subject to division (E) of this section, the	927
superintendent shall appoint one or more examiners to perform the	928
examination and instruct them as to the scope of the examination.	929
The superintendent may employ any guidelines or procedures for	930
purposes of this division that the superintendent considers	931
appropriate.	932

(2) Every licensee, or person from whom information is	933
sought, and all officers, directors, employees, and agents of	934
any licensee, or person from whom information is sought, shall	935
provide to the examiners timely, convenient, and free access at	936
all reasonable hours at the licensee's or person's offices to all	937
books, records, accounts, papers, documents, assets, and computer	938
or other recordings relating to the property, assets, business,	939
and affairs of the licensee being examined. The officers,	940
directors, employees, and agents of the licensee or person shall	941
facilitate the examination and aid in the examination so far as	942
it is in their power to do so.	943

The refusal of a licensee, by its officers, directors,	944
employees, or agents, to submit to examination or to comply with	945
any reasonable written request of the superintendent shall be	946
grounds for suspension, revocation, denial of issuance, or	947
nonrenewal of any license or authority held by the licensee to	948
engage in the viatical settlement business or other business	949
subject to the superintendent's jurisdiction. Any proceedings for	950
suspension, revocation, or denial, or nonrenewal of any license or	951
authority is subject to chapterChapter 119. of the Revised Code.	952

(3) The superintendent has the power to issue subpoenas, to	953
administer oaths, and to examine under oath any person as to any	954
matter pertinent to the examination. Upon the failure or refusal	955
of a person to obey a subpoena, the superintendent may petition a	956
court of competent jurisdiction, and, upon proper showing, the	957
court may enter an order compelling the witness to appear and	958
testify or produce documentary evidence. Failure to obey the court	959
order shall be punishable as contempt of court.	960

(4) When making an examination under this chapter, the	961
superintendent may retain attorneys, appraisers, independent	962
actuaries, independent certified public accountants, or other	963
professionals and specialists as examiners, and the licensee that	964
is the subject of the examination shall bear the cost of those	965
examiners pursuant to division (F) of this section. Examiners who	966
are appointed by the superintendent, but who are not employees of	967
the department of insurance, shall be compensated for their work,	968
travel, and living expenses at reasonable and customary rates.	969

(5) Nothing contained in this chapter limits the	970
superintendent's authority to terminate or suspend an examination	971
in order to pursue other legal or regulatory action pursuant to	972
the insurance laws of this state. Findings of fact and conclusions	973
made pursuant to any examination shall be prima-facie evidence in	974
any legal or regulatory action.	975

(6) Nothing contained in this chapter limits the	976
superintendent's authority to use and, if appropriate, to make	977
public any final or preliminary examination report, any examiner	978
or licensee working papers or other documents, or any other	979
information discovered or developed during the course of any	980
examination in the furtherance of any legal or regulatory action	981
that the superintendent, in the superintendent's sole	982
discretion, considers appropriate.	983

(C)(1) Examination reports shall be comprised of only facts	984
appearing upon the books, records, or other documents of the	985
licensee, its agents, or other persons examined, or as ascertained	986
from the testimony of its officers, agents, or other persons	987
examined concerning its affairs, and the conclusions and	988
recommendations that the examiners find reasonably warranted from	989
the facts.	990

(2) Upon completion of the examination, the examiner in	991
charge shall file with the superintendent a verified written	992
report of examination. Upon receipt of the verified report, the	993
superintendent shall transmit the report to the licensee examined,	994
together with a notice that shall afford the licensee examined a	995
reasonable opportunity of not more than thirty days from receipt	996
of the report to make a written submission or rebuttal with	997
respect to any matters contained in the examination report.	998

(3) If the superintendent determines that regulatory action	999
is appropriate as a result of an examination, the superintendent	1000
may initiate any proceedings or actions provided by law.	1001

(D)(1) Names and individual identification data for all	1002
viators shall be considered private and confidential information	1003
and shall not be disclosed by the superintendent, unless required	1004
by law.	1005

(2) Except as otherwise provided in this chapter or in the	1006
law of another state or jurisdiction that is substantially similar	1007
to this chapter, all examination reports, working papers, recorded	1008
information, documents, and copies of those reports, papers,	1009
information, documents, and copies produced by, obtained by, or	1010
disclosed to the superintendent or to any other person in the	1011
course of an examination made under this chapter or under the law	1012
of another state or jurisdiction that is substantially similar to	1013
this chapter, or in the course of the superintendent's analysis or	1014
investigation of the financial condition or market conduct of a	1015
licensee are confidential by law and privileged, are not a public	1016
record open for inspection under section 149.43 of the Revised	1017
Code, are not subject to subpoena, and are not subject to	1018
discovery or admissible in evidence in any private civil action.	1019
The superintendent may use the documents, materials, or other	1020
information in the furtherance of any regulatory or legal action	1021
brought as part of the superintendent's official duties.	1022

(3) Documents, materials, or other information, including,	1023
but not limited to, all working papers, and copies of working	1024
papers, in the possession or control of the NAIC and its	1025
affiliates and subsidiaries are confidential by law and	1026
privileged, are not subject to subpoena, and are not subject to	1027
discovery or admissible in evidence in any private civil action,	1028
if either of the following applies:	1029

(a) They are created, produced, or obtained by or disclosed	1030
to the NAIC and its affiliates and subsidiaries in the course of	1031
assisting an examination made under this chapter or assisting the	1032
superintendent or the comparable official in another state in the	1033
analysis or investigation of the financial condition or market	1034
conduct of a licensee.	1035

(b) The superintendent or the comparable official in another	1036
state discloses them to the NAIC and its affiliates and	1037
subsidiaries under division (D)(5) of this section or under a	1038
comparable provision in the law of the other state.	1039

(4) Neither the superintendent nor any person that received	1040
the documents, material, or other information while acting under	1041
the authority of the superintendent, including the NAIC and its	1042
affiliates and subsidiaries, shall be permitted to testify in any	1043
private civil action concerning any confidential documents,	1044
materials, or information subject to division (D)(1) of this	1045
section.	1046

(5)(a) In order to assist in the performance of the	1047
superintendent's duties, the superintendent may do any of the	1048
following:	1049

(i) Share documents, materials, or other information,	1050
including the confidential and privileged documents, materials, or	1051
information subject to division (D)(1) of this section, with other	1052
state, federal, and international regulatory agencies, with the	1053
NAIC and its affiliates and subsidiaries, and with state, federal,	1054
and international law enforcement authorities, if the recipient	1055
agrees to maintain the confidentiality and privileged status of	1056
the document, material, communication, or other information;	1057

(ii) Receive documents, materials, communications, or	1058
information, including otherwise confidential and privileged	1059
documents, materials, or information, from the NAIC and its	1060
affiliates and subsidiaries, and from regulatory and law	1061
enforcement officials of other foreign or domestic jurisdictions;	1062

(iii) Enter into agreements governing sharing and use of	1063
information consistent with this section.	1064

(b) The superintendent shall maintain as confidential or	1065
privileged any document, material, or information received under	1066
division (D)(5)(a)(ii) of this section with notice or the	1067
understanding that it is confidential or privileged under the laws	1068
of the jurisdiction that is the source of the document, material,	1069
or information.	1070

(6) No waiver of any applicable privilege or claim of	1071
confidentiality in the documents, materials, or information shall	1072
occur as a result of disclosure to the superintendent under this	1073
section or as a result of sharing as authorized in division (D)(5)	1074
of this section.	1075

(7) A privilege established under the law of any state or	1076
jurisdiction that is substantially similar to the privilege	1077
established under division (D) of this section shall be available	1078
and enforced in any proceeding in, and in any court of, this	1079
state.	1080

(8) Nothing contained in this chapter prevents or prohibits	1081
the superintendent from disclosing the content of an examination	1082
report, preliminary examination report or results, or any matter	1083
relating to those reports or results, to the official of any other	1084
state or country that is comparable to the superintendent, or to	1085
law enforcement officials of this or any other state or agency of	1086
the federal government at any time, or to the NAIC, if the agency	1087
or office receiving the report or matters relating to it agrees in	1088
writing to hold it confidential and in a manner consistent with	1089
this chapter.	1090

(E)(1) The superintendent may not appoint an examiner if the	1091
examiner, either directly or indirectly, has a conflict of	1092
interest or is affiliated with the management of, or owns a	1093
pecuniary interest in, any person subject to examination under	1094
this chapter. This division does not automatically preclude any of	1095
the following from being an examiner:	1096

(a) A viator;

1097

(b) An insured in a viaticated insurance policy or	1098
cetificate;	1099

(c) A beneficiary in an insurance policy or certificate that	1100
is proposed to be viaticated.	1101

(2) Notwithstanding the requirements of division (E) of this	1102
section, the superintendent may retain from time to time, on an	1103
individual basis, qualified actuaries, certified public	1104
accountants, or other similar individuals who are independently	1105
practicing their professions, even though these persons may from	1106
time to time be similarly employed or retained by persons subject	1107
to examination under this chapter.	1108

(F)(1) As used in division (F) of this section, "expenses"	1109
include all of the following:	1110

(a) Compensation of examiners for each day or portion of a	1111
day worked;	1112

(b) Travel and living expenses of examiners;

1113

(c) All other incidental expenses incurred by or on behalf of	1114
examiners;	1115

(d) An allocated share of all expenses not described in	1116
division (F)(1), (2), or (3) of this section that are necessarily	1117
incurred in the performance of a market conduct examination,	1118
including the expenses of direct overhead and support staff for	1119
examiners.	1120

(2) When a market conduct examination is made of an insurera	1121
licensee under this chapter, the insurerlicensee shall pay the	1122
expenses of the examination. The expenses of an examination	1123
include those incurred on or after the date on which the	1124
superintendent notifies the insurerlicensee of the examination	1125
through the issuance of the final examination report.	1126

(3) Upon an insurer's failure to comply with division (A) of	1127
this section, the superintendent may initiate proceedings in	1128
accordance with Chapter 119. of the Revised Code to revoke,	1129
suspend, or refuse to renew the certificate of authority or	1130
license of the insurer. Additionally, theThe superintendent may	1131
request the attorney general to initiate a civil action in the	1132
court of common pleas of Franklin county to obtain and enforce a	1133
judgment for expenses incurred in the performance of a market	1134
conduct examination.	1135

(G)(1) No cause of action shall arise nor shall any liability	1136
be imposed against the superintendent, any authorized	1137
representative of the superintendent, or any examiner appointed by	1138
the superintendent for any statements made or conduct performed in	1139
good faith while carrying out the provisions of this chapter.	1140

(2) No cause of action shall arise nor shall any liability be	1141
imposed against any person for the act of communicating or	1142
delivering information or data to the superintendent, any	1143
authorized representative of the superintendent, or any examiner	1144
appointed by the superintendent pursuant to an examination made	1145
under this chapter, if the act of communication or delivery was	1146
performed in good faith and without fraudulent intent or the	1147
intent to deceive. Division (G)(2) of this sectionThis division	1148
does not abrogate or modify in any way any common law or statutory	1149
privilege or immunity previously enjoyed by any person identified	1150
in division (G)(1) of this section.	1151

(3) A person identified in division (G)(1) or (2) of this	1152
section shall be entitled to an award of attorney's fees and costs	1153
if the person is the prevailing party in a civil action for libel,	1154
slander, or any other relevant tort arising out of activities in	1155
carrying out the provisions of this chapter and the party bringing	1156
the action was not substantially justified in bringing the action.	1157
For purposes of this division (G)(3) of this section, a proceeding	1158
is "substantially justified" if it had a reasonable basis in law	1159
or fact at the time that it was initiated.	1160

(H) The superintendent may investigate suspected fraudulent	1161
viatical settlement acts and persons engaged in the business of	1162
viatical settlements.	1163

Sec. 3916.12. (A) Each viatical settlement provider and	1164
viatical settlement broker licensedlicensee under this chapter	1165
shall file with the superintendent of insurance, on or before the	1166
first day of March of each year, an annual statement containing	1167
the information required by the superintendent by rule adopted in	1168
accordance with chapter 119. of the Revised Codeverified under	1169
oath by two officers in the form prescribed by the	1170
superintendent. The annual statement for a viatical settlement	1171
provider shall include the following information about the	1172
viatical settlement provider's transactions during the previous	1173
calendar year, unless newly licensed, in which case the	1174
superintendent may require additional years:	1175

(1) A list of each life insurance policy, including policy	1176
number, date of issue, viator, insured, insurance company issuing	1177
policy, date viatical settlement contract signed by viator;	1178
viatical settlement broker, agent of record on the policy, any	1179
life insurance agents receiving compensation, regardless of the	1180
form, and any premium finance companies;	1181

(2) Addresses and contact information for those persons	1182
listed in division (A)(1) of this section;	1183

(3) A list of all life expectancy providers who have directly	1184
or indirectly provided life expectancies to the viatical	1185
settlement provider for use in connection with a viatical	1186
settlement contract;	1187

(4) Any other information required by the superintendent.

1188

(B) On or before the first day of May of each year, a	1189
viatical settlement provider licensed in this state shall file	1190
with the superintendent its financial statement, audited by an	1191
independent certified public accountant along with a letter	1192
stating whether any significant deficiencies or material	1193
weaknesses were detected during the audit pursuant to statement on	1194
auditing standards number 112 or as amended or superseded.	1195

(C)(1) Each viatical settlement provider shall file with the	1196
superintendent interim unaudited financial statements, including	1197
comparative results and footnotes to the financial statements, on	1198
a quarterly basis within forty-five days after the end of each	1199
quarter. The interim financial statements shall meet all of the	1200
following requirements:	1201

(a) Be certified by the chief executive officer and chief	1202
financial officer as to the accuracy and fair presentation;	1203

(b) Include disclosures either on the face of the financial	1204
statements or in accompanying footnotes sufficient so as to make	1205
the interim information not misleading.	1206

(2) Viatical settlement providers may assume that the users	1207
of the interim financial statements have access to the prior	1208
fiscal year-end audited financial statements and that the adequacy	1209
of additional disclosure needed for a fair presentation, except in	1210
regard to material contingencies, may be determined in that	1211
context. A footnote disclosure that would substantially duplicate	1212
the disclosure contained in the audited financial statements for	1213
the preceding fiscal year may be omitted. A footnote disclosure	1214
shall be provided if events subsequent to the fiscal year end have	1215
a material impact on the viatical settlement provider.	1216

(D) A viatical settlement provider that willfully fails to	1217
file the annual statements required by this section, or willfully	1218
fails to reply within thirty calendar days to a written inquiry	1219
from the superintendent or the superintendent's designee, shall,	1220
in addition to other penalties provided by this chapter, be	1221
subject to a penalty of up to two hundred fifty dollars per day,	1222
not to exceed twenty-five thousand dollars in the aggregate for	1223
each such failure.	1224

(E) The superintendent shall keep confidential and not a	1225
matter of public record all individual transaction data	1226
regarding the business of viatical settlements and data that	1227
could compromise the privacy of personal, financial, and health	1228
information of the viator or insured.	1229

Sec. 3916.13.  Except as otherwise permitted or required by	1230
law, a viatical settlement provider, viatical settlement broker,	1231
insurance company, insurance agent, insurance broker, information	1232
bureau, rating agency or company, or any other person with actual	1233
knowledge of an insured's identity, shall not disclose that	1234
identity as an insured, including the insured's name and	1235
individual identification data, or the insured's financial or	1236
medical information, unless any of the following apply:	1237

(A) The disclosure is necessary to effect a viatical	1238
settlement between the viator and a viatical settlement provider,	1239
and the viator and insured have provided prior written consent to	1240
the disclosure.	1241

(B) The disclosure is provided in response to an	1242
investigation or examination by the superintendent of insurance or	1243
by any other governmental officer or agency or pursuant to the	1244
requirements of division (C) of section 3916.18 of the Revised	1245
Code.	1246

(C) The disclosure is a term of, or condition to, the	1247
transfer of a viaticated policy by one viatical settlement	1248
provider to another viatical settlement provider.	1249

(D) The disclosure is necessary to permit a financing entity,	1250
related provider trust, or special purpose entity to finance the	1251
purchase of policies or certificates by a viatical settlement	1252
provider, and the viator and insured have provided prior written	1253
consent to the disclosure.	1254

(E) The disclosure is necessary to allow the viatical	1255
settlement provider or viatical settlement broker or their	1256
authorized representatives to make contacts for the purpose of	1257
determining health status.	1258

(F) The disclosure is required to purchase stop-loss coverage	1259
or financial guaranty insurance.	1260

Sec. 3916.14.  (A)(1) The superintendent of insurance may	1261
conduct an examination under this chapter of a licensee as often	1262
as the superintendent in the superintendent's sole discretion	1263
considers appropriate. The superintendent shall consider all of	1264
the following to determine the nature, scope, and frequency of	1265
examinations:	1266

(a) Consumer complaints;

1267

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

1268

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

1269

(d) Actuarial opinions;

1270

(e) Any report of independent certified public accountants;

1271

(f) Any other criteria the superintendent determines to be	1272
appropriate.	1273

(2) For the purposes of completing an examination of a	1274
licensee under this chapter, the superintendent may examine or	1275
investigate any person, or the business of any person, insofar as	1276
the examination or investigation, in the sole discretion of the	1277
superintendent, is necessary or material to the examination of the	1278
licensee.	1279

(3) In lieu of an examination under this chapter of any	1280
foreign or alien licensee licensed under this chapter, the	1281
superintendent, at the superintendent's discretion, may accept an	1282
examination report on the licensee as prepared by the official of	1283
the licensee's state of domicile or port-of-entry state who is	1284
comparable to the superintendent. As far as is practical, the	1285
superintendent shall cooperate with that official for any	1286
examination of a foreign or alien licensee.	1287

(B) The licensee or applicant shall pay to the superintendent	1288
all costs, assessments, forfeitures, or fines incurred in	1289
conducting an examination under this section. The superintendent	1290
shall deposit the money into the state treasury to the credit of	1291
the department of insurance operating fund created by section	1292
3901.021 of the Revised Code.	1293

Sec. 3916.15.  (A) The superintendent of insurance may refuse	1294
to issue or may suspend, revoke, or refuse to renew the license of	1295
a viatical settlement provider or, viatical settlement broker, or	1296
life expectancy provider, if the superintendent finds that any of	1297
the following apply:	1298

(1) There was a material misrepresentation in the application	1299
for the license.	1300

(2) The applicant or licensee or any officer, partner,	1301
member, key management personnel, or designee of the applicant or	1302
licensee has been convicted of fraudulent or dishonest practices,	1303
is subject to a final administrative action in another state, has	1304
been the subject of an administrative or civil action brought by	1305
the department of commerce, division of securities, or is	1306
otherwise shown to be untrustworthy or incompetent.	1307

(3) The licensee is a viatical settlement provider that	1308
demonstrates a pattern of unreasonable payments to viators.	1309

(4) The licensee or any officer, partner, member, key	1310
management personnel, or designee of the licensee has been	1311
convicted of or has pleaded guilty or no contest to a felony or to	1312
a misdemeanor involving fraud, moral turpitude, dishonesty, or	1313
breach of trust, regardless of whether a judgment of conviction	1314
has been entered by the court.	1315

(5) The licensee is a viatical settlement provider that has	1316
used a viatical settlement contract form that has not been	1317
approved under this chapter.	1318

(6) The licensee is a viatical settlement provider that has	1319
failed to honor contractual obligations set out in a viatical	1320
settlement contract.	1321

(7) The licensee no longer meets the requirements for initial	1322
licensure.	1323

(8) The licensee is a viatical settlement provider that has	1324
assigned, transferred, or pledged a viaticated policy to a person	1325
that is not aone of the following:	1326

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

1327

(b) A viatical settlement purchaser;

1328

(c) A qualified institutional buyer;

1329

(d) A financing entity, a;

1330

(e) A special purpose entity, or a;

1331

(f) A related provider trust.

1332

(9) The licensee or any officer, partner, member, key	1333
management personnel, or designee of the licensee has violated any	1334
provision of this chapter or any rule adopted under this chapter.	1335

(10) The licensee or any officer, partner, member, key	1336
management personnel, or designee of the licensee has committed	1337
any coercive, fraudulent, or dishonest act, or made any untrue,	1338
deceptive, or misleading statement, in connection with a viatical	1339
transaction or a proposed viatical transaction.	1340

(B) Before the superintendent refuses to issue a license	1341
under this chapter, or suspends,or revokes, or refuses to renew	1342
the license of a viatical settlement provider or, viatical	1343
settlement broker, or life expectancy provider, the superintendent	1344
shall provide the licensee or applicant with notice and an	1345
opportunity for hearing as provided in chapterChapter 119. of the	1346
Revised Code, except as follows:	1347

(1)(a) Any notice of opportunity for hearing, the hearing	1348
officer's findings and recommendations, or the superintendent's	1349
order shall be served by certified mail at the last known address	1350
of the licensee or applicant. Service shall be evidenced by return	1351
receipt signed by any person.	1352

For purposes of this section, the "last known address" is the	1353
address that appears in the licensing records of the department of	1354
insurance.	1355

(b) If the certified mail envelope is returned with an	1356
endorsement showing that service was refused, or that the envelope	1357
was unclaimed, the notice and all subsequent notices required by	1358
Chapter 119. of the Revised Code may be served by ordinary mail to	1359
the last known address of the licensee or applicant. The mailing	1360
shall be evidenced by a certificate of mailing. Service is deemed	1361
complete as of the date of such certificate provided that the	1362
ordinary mail envelope is not returned by the postal authorities	1363
with an endorsement showing failure of delivery. The time period	1364
in which to request a hearing, as provided in Chapter 119. of the	1365
Revised Code, begins to run on the date of mailing.	1366

(c) If service by ordinary mail fails, the superintendent may	1367
cause a summary of the substantive provisions of the notice to be	1368
published once a week for three consecutive weeks in a newspaper	1369
of general circulation in the county where the last known place of	1370
residence or business of the licensee or applicant is located. The	1371
notice is considered served on the date of the third publication.	1372

(d) Any notice required to be served under Chapter 119. of	1373
the Revised Code shall also be served upon the attorney of the	1374
licensee or applicant by ordinary mail if the attorney has entered	1375
an appearance in the matter.	1376

(e) The superintendent may, at any time, perfect service on a	1377
licensee or applicant by personal delivery of the notice by an	1378
employee of the department.	1379

(f) Notices regarding the scheduling of hearings and all	1380
other matters not described in division (B)(1)(a) of this section	1381
shall be sent by ordinary mail to the licensee or applicant and to	1382
the attorney of the licensee or applicant.	1383

(2) Any subpoena for the appearance of a witness or the	1384
production of documents or other evidence at a hearing, or for the	1385
purpose of taking testimony for use at a hearing, shall be served	1386
by certified mail, return receipt requested, by an attorney or by	1387
an employee of the department designated by the superintendent.	1388
Such subpoenas shall be enforced in the manner provided in section	1389
119.09 of the Revised Code. Nothing in this section shall be	1390
construed as limiting the superintendent's other statutory powers	1391
to issue subpoenas.	1392

Sec. 3916.16.  (A)(1) It is a violation of this chapter for	1393
any person to enter into a viatical settlement contract prior to	1394
the application for or issuance of a policy that is the subject	1395
of the viatical settlement contract.	1396

(2) It is a violation of this chapter for any person to	1397
issue, solicit, market, or otherwise promote the purchase of a	1398
life insurance policy for the purpose of or with an emphasis on	1399
selling the policy.	1400

(B) It is a violation of this chapter for any person to enter	1401
into a viatical settlement contract within a two-yearfive-year	1402
period commencing with the date of issuance of the insurance	1403
policy or certificate unless the viator certifies to the viatical	1404
settlement provider that one or more of the following conditions	1405
have been met within that two-year periodfive years after the	1406
issuance of the policy:	1407

(1) The policy or certificate was issued upon the viator's	1408
exercise of conversion rights arising out of a group policy or	1409
certificate, provided the total of the time covered under the	1410
conversion policy or certificate plus the time covered under the	1411
groupprior policy or certificate is at least twenty-foursixty	1412
months. The time covered under thea group policy or certificate	1413
shall be calculated without regard to any change in insurance	1414
carriers, provided the coverage has been continuous and under the	1415
same group sponsorship.	1416

(2) The viator is a charitable organization exempt from	1417
taxation under 26 U.S.C. section 501(c)(3).	1418

(3) The viator is not an individual.

1419

(4) The viator certifies and submits independent evidence to	1420
the viatical settlement provider that one or more of the	1421
following conditions have been met within that two-yearfive-year	1422
period:	1423

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

1424

(b) The viator's spouse dies.

1425

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

1426

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

1427

(e) The viator becomes physically or mentally disabled, and a	1428
physician determines that the disability prevents the viator from	1429
maintaining full-time employment.	1430

(f) The viator was the insured's employer at the time the	1431
policy or certificate was issued and the employment relationship	1432
terminated.	1433

(g) A court of competent jurisdiction enters a final order,	1434
judgementjudgment, or decree on the application of a creditor of	1435
the viator and adjudicates the viator bankrupt or insolvent or	1436
approves a petition seeking reorganization of the viator or	1437
appointing a receiver, trustee, or liquidator to all or a	1438
substantial part of the viator's assets.	1439

(h) The viator experiences a significant decrease in income	1440
that is unexpected and that impairs the viator's reasonable	1441
ability to pay the policy premium.	1442

(i) The viator or insured disposes of the viator's or	1443
insured's ownership interests in a closely held corporation	1444

(g) The sole beneficiary of the policy is a family member of	1445
the viator and the beneficiary dies.	1446

(3) The viator enters into a viatical settlement contract	1447
more than two years after the date of issuance of a policy, and	1448
all of the following have been true with respect to that policy	1449
at all times during those two years:	1450

(a) The viator has funded policy premiums using one or more	1451
of the following methods:	1452

(i) Unencumbered assets provided by the insured which may	1453
include an interest in the life insurance policy being viaticated	1454
up to the amount of the policy's net cash surrender value;	1455

(ii) Full recourse liability financing incurred by the	1456
insured;	1457

(iii) An agreement described in division (P)(3)(e) of section	1458
3916.01 of the Revised Code.	1459

(b) The viator does not have an agreement or understanding	1460
with any other person to guarantee any such liability, to	1461
purchase, or to stand ready to purchase the policy, including	1462
through an assumption or forgiveness of the loan;	1463

(c) Neither the insured nor the policy has been evaluated for	1464
settlement in connection with the issuance of the policy.	1465

(B)(C) Copies of the independent evidence described in	1466
division (A)(4)(B)(2) of this section and documents required by	1467
section 3916.07 of the Revised Code shall be submitted to the	1468
insurer when the viatical settlement provider or any other party	1469
entering into a viatical settlement contract with a viator	1470
submits a request to the insurer for verification of coverage.	1471
The copies shall be accompanied by a letter of attestation from	1472
the viatical settlement provider that the copies are true and	1473
correct copies of the documents received by the viatical	1474
settlement provider.	1475

(C)(D) If the viatical settlement provider submits to the	1476
insurer a copy of the owner or insured's certification and	1477
independent evidence described in division (A)(4)(B)(2) of this	1478
section when the viatical settlement provider submits a request	1479
to the insurer to effect the transfer of the policy or	1480
certificate to the viatical settlement provider, the copy	1481
conclusively establishes that the viatical settlement contract	1482
satisfies the requirements of this section, and the insurer shall	1483
timely respond to the request.	1484

(E) No insurer, as a condition of responding to a request for	1485
verification of coverage or effecting the transfer of a policy	1486
pursuant to a viatical settlement contract, may require the	1487
viator, insured, viatical settlement provider, or viatical	1488
settlement broker to sign any form, disclosure, consent, or	1489
waiver form that has not been approved by the superintendent of	1490
insurance for use in connection with viatical settlement	1491
contracts.	1492

(F) Upon receipt of a properly completed request for change	1493
of ownership or beneficiary of a policy, the insurer shall respond	1494
in writing within thirty calendar days to confirm that the insurer	1495
has made the change or specify reasons that the change cannot be	1496
processed. No insurer shall unreasonably delay effecting change in	1497
ownership or beneficiary or seek to interfere with any viatical	1498
settlement contract lawfully entered into in this state.	1499

(G) A viatical settlement provider or viatical settlement	1500
broker that is party to a plan, transaction, or series of	1501
transactions to originate, renew, continue, or finance a life	1502
insurance policy with the insurer for the purpose of engaging in	1503
the business of viatical settlements at any time prior to or	1504
during the first five years after the insurer issues the policy	1505
shall fully disclose the plan, transaction, or series of	1506
transactions to the insurer that issued that policy.	1507

Sec. 3916.17.  (A) The general assembly hereby declares that	1508
the purpose of this section is to provide prospective viators with	1509
clear and unambiguous statements in the advertisement of viatical	1510
settlements and to assure the clear, truthful, and adequate	1511
disclosure of the benefits, risks, limitations, and exclusions of	1512
any viatical settlement contract. This purpose is intended to be	1513
accomplished by the establishment of guidelines and standards of	1514
permissible and impermissible conduct in the advertising of	1515
viatical settlements to assure that product descriptions are	1516
presented in a manner that prevents unfair, deceptive, or	1517
misleading advertising and is conducive to accurate presentation	1518
and description of viatical settlements through the advertising	1519
media and material used by viatical settlement licensees.	1520

Divisions (B) to (P)(Q) of this section apply to any	1521
advertising of viatical settlement contracts, or any related	1522
products or services intended for dissemination in this state,	1523
including, but not limited to, internet advertising viewed by	1524
persons located in this state. In cases in which disclosure	1525
requirements are established pursuant to federal regulation, this	1526
section shall be interpreted so as to minimize or eliminate	1527
conflict with federal regulation wherever possible.	1528

(B)(1) Every person licensed under this chapter shall file	1529
with the superintendent of insurance all advertisements of its	1530
contract, products, and services.	1531

(2) No person licensed under this chapter shall enter into a	1532
viatical settlement contract unless the materials promoting,	1533
advertising, and marketing the viatical settlement contract have	1534
been filed with the superintendent.	1535

(3) All materials filed with the superintendent pursuant to	1536
division (B)(1) of this section shall be filed in a format	1537
prescribed by the superintendent. Any filings not disapproved by	1538
the superintendent within sixty days of the superintendent's	1539
receipt of the materials shall be considered approved unless the	1540
superintendent requests additional time, in writing, from the	1541
person that filed the materials. The superintendent may assess	1542
fees for the review of the materials under this division.	1543

(C) Every viatical settlement licensee shall establish and at	1544
all times shall maintain a system of control over the content,	1545
form, and method of dissemination of all advertisements of its	1546
contracts, products, and services. All advertisements, regardless	1547
of by whom they are written, created, designed, or presented,	1548
shall be the responsibility of the viatical settlement licensee	1549
and of the individual who created or presented the	1550
advertisement. A system of control shall include regular routine	1551
notification, at least once a year, to agents and others	1552
authorized by the viatical settlement licensee who disseminate	1553
advertisements of the requirements and procedures for approval	1554
prior to the use of any advertisements not furnished by the	1555
viatical settlement licensee.	1556

(C)(D) All advertisements that are subject to this section	1557
shall be truthful and not misleading in fact or by implication.	1558
The form and content of an advertisement of a viatical settlement	1559
contract shall be sufficiently complete and clear so as to avoid	1560
deception and shall not have the capacity or tendency to mislead	1561
or deceive. The determination of whether an advertisement has the	1562
capacity or tendency to mislead or deceive shall be made by the	1563
superintendent of insurance, from the overall impression that the	1564
advertisement may be reasonably expected to create upon a person	1565
of average education or intelligence within the segment of the	1566
public to which it is directed.	1567

(D)(E) Viatical settlement advertisements containing any	1568
representation set forth in this division are deemed false and	1569
misleading on their face and are prohibited. False and misleading	1570
viatical settlement advertisements include, but are not limited	1571
to, those including any of the following representations:	1572

(1) "Guaranteed," "fully secured," "100 percent secured,"	1573
"fully insured," "secure," "safe," "backed by rated insurance	1574
companies," "backed by federal law," "backed by state law," or	1575
"state guaranty funds," or similar representations;	1576

(2) "No risk," "minimal risk," "low risk," "no speculation,"	1577
"no fluctuation," or similar representations;	1578

(3) "Qualified or approved for individual retirement accounts	1579
(IRAs), Roth IRAs, 401(k) plans, simplified employee pensions	1580
(SEPs), 403(b), Keogh plans, TSA, or other retirement account	1581
rollovers," "tax deferred," or similar representations;	1582

(4) Utilization of the word "guaranteed" to describe the	1583
fixed return, annual return, principal, earnings, profits,	1584
investment, or similar representations;	1585

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

1586

(6) "High yield," "superior return," "excellent return,"	1587
"high return," "quick profit," or similar representations;	1588

(7) Purported favorable representations or testimonials about	1589
the benefits of viatical settlement contracts or viatical	1590
settlement purchase agreements as an investment, taken out of	1591
context from any newspaper, trade paper, journal, radio or	1592
television program, or any other form of print and electronic	1593
media.	1594

(E)(F)(1) The information required to be disclosed under this	1595
section shall not be minimized, rendered obscure, or presented in	1596
an ambiguous fashion or intermingled with the text of the	1597
advertisement so as to be confusing or misleading.	1598

An advertisement shall not omit material information or use	1599
any words, phrases, statements, references, or illustrations if	1600
the omission or use has the capacity, tendency, or effect of	1601
misleading or deceiving viators, as to the nature or extent of any	1602
benefit, loss covered, premium payable, or state or federal tax	1603
consequence. The fact that the viatical settlement contract	1604
offered is made available for inspection prior to consummation of	1605
the sale, that an offer is made to refund the payment if the	1606
viator is not satisfied, or that the viatical settlement contract	1607
includes a "free look" period that satisfies or exceeds legal	1608
requirements, does not remedy any misleading statements.	1609

(2) An advertisement shall not use the name or title of a	1610
life insurance company or a life insurance policy unless the	1611
advertisement has been approved by the insurerthat company.	1612

(3) An advertisement shall not represent that any premium	1613
payments will not be required to be paid on the life insurance	1614
policy that is the subject of a viatical settlement contract or	1615
viatical settlement purchase agreement in order to maintain that	1616
policy, unless that is the fact.	1617

(4) An advertisement shall not state or imply that interest	1618
charged on an accelerated death benefit or a policy loan is	1619
unfair, inequitable, or in any manner an incorrect or improper	1620
practice.	1621

(5) The words "free," "no cost," "without cost," "no	1622
additional cost," "at no extra cost," or words of similar import	1623
shall not be used with respect to any life insurance policy or to	1624
any benefit or service unless true. An advertisement may specify	1625
the charge for a benefit or a service or may state that a charge	1626
is included in the payment or use other appropriate language.	1627

(6)(a) TerstimonialsTestimonials, appraisals, analyses, or	1628
endorsements used in advertisements must satisfy all of the	1629
following:	1630

(i) They must be genuine.

1631

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

1632

(iii) They must be applicable to the viatical settlement	1633
contrctcontract product or service advertised, if any.	1634

(iv) They must be accurately reproduced with sufficient	1635
completeness to avoid misleading or deceiving prospective viators	1636
as to the nature or scope of the testimonials, appraisals,	1637
analyses, or endorsements.	1638

(b) In using testimonials, appraisals, analyses, or	1639
endorsements, the viatical settlement licensee makes as its own	1640
all the statements contained in the testimonials, appraisals,	1641
analyses, or endorsements, and the statements are subject to all	1642
the provisions of this section.	1643

(c) If the individual making a testimonial, appaisal	1644
appraisal, analysis, or endorsement has a funancialfinancial	1645
interest in the viatical settlement provider or related entity	1646
subject of that testimonial, appraisal, analysis, or endorsement	1647
directly or indirectly as a stockholder, director, officer,	1648
employee, or otherwise, or receives any benefit directly or	1649
indirectly other than required union scale wages, that fact shall	1650
be prominently disclosed in the advertisement.	1651

(d) An advertisement shall not state or im-plyimply that a	1652
viatical settlement contract benefit or service has been approved	1653
or endorsed by a group of individuals, society, association, or	1654
other organization unless that is the fact and unless any	1655
relationship between the individualgroup of individuals, society,	1656
association, or organization and the viatical settlement provider	1657
is disclosed. If the entity making the endorsement or testimonial	1658
is owned, controlled, or managed by the viatical settlement	1659
provider, or receives any payment or other consideration from the	1660
viatical settlement provider for making an endorsement or	1661
testimonial, that fact shall be disclosed in the advertisement.	1662

(e) When an endorsement refers to benefits received under a	1663
viatical settlement contract, all pertinent information shall be	1664
retained for a period of at least five years after its use.	1665

(F)(G) An advertisement shall not contain statistical	1666
information unless the information accurately reflects recent and	1667
relevant facts. The source of all statistics used in an	1668
advertisement shall be identified.	1669

(G)(H) An advertisement shall not disparage any insurer,	1670
viatical settlement provider, viatical settlement broker, viatical	1671
settlement investment agent, insurance producer, policy, service,	1672
or method of marketing.	1673

(H)(I) All advertisements about a viatical settlement	1674
provider or its viatical settlement contract, products, or	1675
services shall clearly identify the viatical settlement	1676
provider's name. If any specific viatical settlement contract is	1677
advertised, the viatical settlement contract shall be identified	1678
either by form number or some other appropriate description. If	1679
an application is part of the advertisement, the name of the	1680
viatical settlement provider shall be shown on the application.	1681

(I)(J) An advertisement shall not use a trade name, group	1682
designation, name of the parent company of a viatical settlement	1683
licensee, name of a particular division of the viatical	1684
settlement licensee, service mark, slogan, symbol, or other	1685
device or reference without disclosing the name of the viatical	1686
settlement licensee, if either of the following applies regarding	1687
the advertisement:	1688

(1) It would have the capacity or tendency to mislead or	1689
deceive as to the true identity of the viatical settlement	1690
licensee.	1691

(2) It would have the capacity or tendency to create the	1692
impression that a company other than the viatical settlement	1693
licensee would have any responsibility for the financial	1694
obligation under a viatical settlement contract.	1695

(J)(K) An advertisement shall not use any combination of	1696
words, symbols, or physical materials that, by their content,	1697
phraseology, shape, color, or other characteristics, are so	1698
similar to a combination of words, symbols, or physical materials	1699
used by a government program or agency or otherwise appear to be	1700
of such a nature that they tend to mislead prospective viators	1701
into believing that the solicitation is in some manner connected	1702
with a government program or agency.	1703

(K)(L) An advertisement may state that a viatical settlement	1704
provider is licensed in the state in which the advertisement	1705
appears, provided it does not exaggerate that fact or suggest or	1706
imply that competing viatical settlement providers may not be so	1707
licensed. The advertisement may ask the audience to consult the	1708
licensee'sviatical settlement provider's web site or contact the	1709
department of insurance to find out if the state in which the	1710
advertisement appears requires licensing and, if it does, whether	1711
the viatical settlement provider or viatical settlement broker is	1712
licensed.	1713

(L)(M) An advertisement shall not create the impression that	1714
the viatical settlement provider, its financial condition or	1715
status, the payment of its claims, or the merits, desirability,	1716
or advisability of its viatical settlement contracts are	1717
recommended or endorsed by any government entity.	1718

(M)(N) All advertisements of an actual licensee shall state	1719
the name of the actual licensee. An advertisement shall not use	1720
a trade name, any group designation, name of any affiliate or	1721
controlling entity of the licensee, service mark, slogan, symbol,	1722
or other device in a manner that would have the capacity or	1723
tendency to mislead or deceive as to the true identity of the	1724
actual licensee or create the false impression that an affiliate	1725
or controlling entity would have any responsibility for the	1726
financial obligation of the licensee.	1727

(N)(O) An advertisement shall not directly or indirectly	1728
create the impression that any division or agency of this state,	1729
any other state, or the United States government endorses,	1730
approves, or favors any of the following:	1731

(1) Any viatical settlement licensee or its business	1732
practices or methods of operation;	1733

(2) The merits, desirability, or advisability of any viatical	1734
settlement contract, or viatical settlement program;	1735

(3) Any viatical settlement contract, or viatical settlement	1736
program;	1737

(4) Any life insurance policy or certificate or life	1738
insurance company.	1739

(O)(P) If the advertiser emphasizes the speed with which the	1740
viatication will occur, the advertising must disclose the average	1741
time frame, from completed application to the date of offer and	1742
from acceptance of the offer to receipt of the funds by the	1743
viator.	1744

(P)(Q) If the advertising emphasizes the dollar amounts	1745
available to viators, the advertising shall disclose the average	1746
purchase price as a per cent of face value obtained by viators	1747
contracting with the licensee during the past six months.	1748

Sec. 3916.171. (A) No person shall commit a fraudulent	1749
viatical settlement act.	1750

(B) All of the following acts are fraudulent viatical	1751
settlement acts when committed by any person who, knowingly or	1752
with intent to defraud and for the purpose of depriving another of	1753
property or for pecuniary gain, commits, or permits any of its	1754
employees or its agents to commit them:	1755

(1) Presenting, causing to be presented, or preparing with	1756
knowledge or belief that it will be presented to or by a viatical	1757
settlement provider, viatical settlement broker, life expectancy	1758
provider, viatical settlement purchaser, financing entity,	1759
insurer, insurance broker, insurance agent, or any other person,	1760
any false material information, or concealing any material	1761
information, as part of, in support of, or concerning a fact	1762
material to, one or more of the following:	1763

(a) An application for the issuance of a viatical settlement	1764
contract or insurance policy;	1765

(b) The underwriting of a viatical settlement contract or	1766
insurance policy;	1767

(c) A claim for payment or benefit pursuant to a viatical	1768
settlement contract or insurance policy;	1769

(d) Any premiums paid on an insurance policy;

1770

(e) Any payments and changes in ownership or beneficiary made	1771
in accordance with the terms of a viatical settlement contract or	1772
insurance policy;	1773

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

1774

(g) The solicitation, offer, effectuation, or sale of a	1775
viatical settlement contract or insurance policy;	1776

(h) The issuance of written evidence of a viatical settlement	1777
contract or insurance policy;	1778

(i) A financing transaction;

1779

(j) Any application for or the existence of or any payments	1780
related to a loan secured directly or indirectly by any interest	1781
in a life insurance policy.	1782

(2) Failing to disclose to the insurer, where the insurer has	1783
requested such disclosure, that the prospective insured has	1784
undergone a life expectancy evaluation by any person or entity	1785
other than the insurer or its authorized representatives in	1786
connection with the application, underwriting, and issuance of the	1787
policy.	1788

(3) In the furtherance of a fraud or to prevent the detection	1789
of a fraud, doing any of the following:	1790

(a) Removing, concealing, altering, destroying, or	1791
sequestering from the superintendent of insurance the assets or	1792
records of a licensee or another person engaged in the business of	1793
viatical settlements;	1794

(b) Misrepresenting or concealing the financial condition of	1795
a licensee, financing entity, insurer, or any other person;	1796

(c) Transacting the business of viatical settlements in	1797
violation of any law of this state requiring a license,	1798
certificate of authority, or other legal authority for the	1799
transaction of the business of viatical settlements;	1800

(d) Filing with the superintendent of insurance or the chief	1801
insurance regulatory official of another jurisdiction a document	1802
containing false information or otherwise concealing from the	1803
superintendent any information about a material fact.	1804

(4) Recklessly entering into, negotiating, brokering, or	1805
otherwise dealing in a viatical settlement contract involving a	1806
life insurance policy that was obtained by presenting false,	1807
deceptive, or misleading information of any fact material to the	1808
policy, or by concealing information concerning any fact material	1809
to the policy, for the purpose of misleading and with the intent	1810
to defraud the issuer of the policy, the viatical settlement	1811
provider, or the viator;	1812

(5) Committing any embezzlement, theft, misappropriation, or	1813
conversion of moneys, funds, premiums, credits, or other property	1814
of a viatical settlement provider, insurer, insured, viator,	1815
insurance policyowner, or any other person engaged in the business	1816
of viatical settlements or insurance;	1817

(6) Employing any plan, financial structure, device, scheme,	1818
or artifice to defraud in the business of viatical settlements;	1819

(7) Misrepresenting the state of residence or facilitating	1820
the change of the state in which a person owns a policy or the	1821
state of residency of a viator to a state or jurisdiction that	1822
does not have laws similar to this chapter for the express	1823
purposes of evading or avoiding the provisions of this chapter;	1824

(8) In the solicitation, application, or issuance of a life	1825
insurance policy, employing any device, scheme, or artifice in	1826
violation of sections 3911.09 or 3911.091 of the Revised Code;	1827

(9) Engaging in any conduct related to a viatical settlement	1828
contract if the person knows or reasonably should have known that	1829
the intent of the transaction was to avoid the disclosure and	1830
notice requirements of section 3916.06 of the Revised Code;	1831

(10) Entering into a premium finance agreement with any	1832
person pursuant to which the person will receive, directly or	1833
indirectly, any proceeds, fees, or other considerations from the	1834
insurance policy, the owner of the insurance policy, or from any	1835
other person with respect to the premium finance agreement or any	1836
viatical settlement contract, or from any transaction related to	1837
the insurance policy, that are in addition to the amount required	1838
to pay the principal, interest, and service charges related to the	1839
policy premiums pursuant to the premium finance agreement or	1840
subsequent sale of the agreement. Any payments, charges, fees, or	1841
other amounts in addition to the amounts required to pay the	1842
principal, interest, and service charges related to policy	1843
premiums paid under the premium finance agreement shall be	1844
remitted to the original owner of the policy or, if the owner is	1845
not living at the time of the determination of the overpayment, to	1846
the estate of the owner.	1847

(11) With respect to any viatical settlement contract or	1848
insurance policy, for a viatical settlement broker or an agent	1849
registered under this chapter as operating as a viatical	1850
settlement broker to knowingly solicit an offer from, effectuate a	1851
viatical settlement with, or make a sale to any viatical	1852
settlement provider, viatical settlement purchaser, financing	1853
entity, or related provider trust that is controlling, controlled	1854
by, or under common control with such viatical settlement broker	1855
or registered agent;	1856

(12) With respect to any viatical settlement contract or	1857
insurance policy, for a viatical settlement provider to knowingly	1858
enter into a viatical settlement contract with a viator if, in	1859
connection with such viatical settlement contract, anything of	1860
value will be paid to a viatical settlement broker or an agent	1861
registered under this chapter as operating as a viatical	1862
settlement broker that is controlling, controlled by, or under	1863
common control with such viatical settlement provider or the	1864
viatical settlement purchaser, financing entity, or related	1865
provider trust that is involved in such viatical settlement	1866
contract;	1867

(13) Issuing, soliciting, marketing, or otherwise promoting	1868
the purchase of an insurance policy for the purpose of or with	1869
emphasis on settling the policy;	1870

(14) Issuing or using a pattern of false, misleading, or	1871
deceptive life expectancies;	1872

(15) Issuing, soliciting, marketing, or otherwise promoting	1873
stranger-originated life insurance;	1874

(16) Attempting to commit, assisting, aiding or abetting in	1875
the commission of, or conspiracy to commit any act or omission	1876
specified in divisions (B)(1) to (15) of this section.	1877

Sec. 3916.18.  (A)(1) No person shall commit a fraudulent	1878
viatical settlement act.	1879

(2) No person shall knowingly or intentionally interfere with	1880
the enforcement of the provisions of this chapter or	1881
investigations of suspected or actual violations of this chapter.	1882

(3)(2) No person in the business of viatical settlements	1883
shall knowingly or intentionally permit any person convicted of a	1884
felony involving dishonesty or breach of trust to participate in	1885
the business of viatical settlements.	1886

(B)(1) Each viatical settlement contract and each application	1887
for a viatical settlement, regardless of the form of transmission,	1888
shall contain the following statement or a substantially similar	1889
statement:	1890

"Any person who knowingly presents false information in an	1891
application for insurance or viatical settlement contract is	1892
guilty of a crime and may be subject to fines and imprisonment."	1893

(2) The lack of a statement as required in division (B)(1) of	1894
this section does not constitute a defense in any prosecution for	1895
a fraudulent viatical settlement act.	1896

(C)(1) Every person engaged in the business of viatical	1897
settlements having knowledge or a reasonable belief that a	1898
fraudulent viatical settlement act is being, will be, or has been	1899
committed shall provide to the superintendent of insurance the	1900
information required by the superintendent. The person shall	1901
provide the information in a manner prescribed by the	1902
superintendent.	1903

(2) Every person having knowledge or a reasonable belief	1904
suspicion that a fraudulent viatical settlement act is being, will	1905
be, or has been committed may provide to the superintendent the	1906
information required by the superintendent. The person shall	1907
provide the information under this division in a manner prescribed	1908
by the superintendent.	1909

(D)(1) No civil liability shall be imposed on, and no cause	1910
of action shall arise from, a person's furnishing information	1911
concerning suspected, anticipated, or completed fraudulent	1912
viatical settlement acts or suspected or completed fraudulent	1913
insurance acts, if the information is provided to or received from	1914
any of the following:	1915

(a) The superintendent, or the superintendent's employees,	1916
agents, or representatives;	1917

(b) Law enforcement or regulatory officials of this state,	1918
another state, the united statesUnited States, or a political	1919
subdivision of this state or another state, or any employee,	1920
agent, or representative of any of those officials:;	1921

(c) A person involved in the prevention and detection of	1922
fraudulent viatical settlement acts or any agent, employee, or	1923
representative of any person so involved;	1924

(d) The NAIC, national association of securities dealers	1925
(NASD)financial industry regulatory authority (FINRA), the north	1926
americanAmerican securities amdiministratorsadministrators	1927
association (NASAA), any employee, agent, or representative of	1928
any of those associations., or other regulatory body overseeing	1929
life insurance, viatical settlements, securities, or investment	1930
fraud;	1931

(e) The life insurer that issued the life insurance policy or	1932
certificate covering the life of the insured.	1933

(2) The immunity provided in division (D)(1) of this section	1934
shall not apply to any statement made with actual malice. In an	1935
action brought against a person for filing a report or furnishing	1936
other information concerning a fraudulent viatical settlement act	1937
or a fraudulent insurance act, the party bringing the action shall	1938
plead specifically any allegation that the immunity provided in	1939
division (D)(1) of this section does not apply because the person	1940
filing the report or furnishing the information did so with actual	1941
malice.	1942

(3) If a person is the prevailing party in a civil action for	1943
libel, slander, or any other relevant tort arising out of	1944
activities in carrying out the provisions of this chapter, if the	1945
prevailing party is a person identified in division (D)(1) of this	1946
section and the immunity described in that division applies to the	1947
person, and if the party who brought the action was not	1948
substantially justified in doing so, the person who is the	1949
prevailing party is entitled to an award of attorney's fees and	1950
costs arising out of the action. However, the person is not	1951
entitled to an award of attorney's fees if the person provided	1952
information about the person's own fraudulent viatical settlement	1953
acts. For purposes of this division, an action is "substantially	1954
justified" if it had a reasonable basis in law or fact at the time	1955
that it was initiated.	1956

(4) This section does not abrogate or modify any common law	1957
or statutory privilege or immunity enjoyed by a person described	1958
in division (D)(1) of this section.	1959

(E)(1) The documents and evidence provided pursuant to	1960
division (D) of this section or obtained by the superintendent in	1961
an investigation of any suspected or actual fraudulent viatical	1962
settlement act is privileged and confidential, is not a public	1963
record open for inspection under section 149.43 of the Revised	1964
Code, and is not subject to discovery or subpoena in a civil or	1965
criminal action.	1966

(2) Division (E)(1) of this section does not prohibit release	1967
by the superintendent of any document or evidence obtained in an	1968
investigation of suspected or actual fraudulent viatical	1969
settlement acts, in any of the following manners or circumstances:	1970

(a) In any administrative or judicial proceeding to enforce	1971
any laws administeradministered by the superintendent;	1972

(b) To any law enforcement or regulatory agency of this	1973
state, another state, the united statesUnited States, or a	1974
politcalpolitical subdivision of this state or another state, to	1975
an organization established for the purpose of detecting and	1976
preventing fraudulent viatical settlement actacts, or to the NACI	1977
NAIC;	1978

(c) At the discretion of the superintendent, to a person in	1979
the business of viatical settlements that is aggrieved by a	1980
fraudulent viatical settlement act.	1981

(3) Release of documents and evidence under division (E)(2)	1982
of this section does not abrogate or modify the privilege granted	1983
in division (E)(1) of this section.	1984

(F) The provisions of this chapter do not do any of the	1985
following:	1986

(1) Preempt the authority or relieve the duty of any other	1987
law enforcement or regulatory agencies to investigate, examine, or	1988
prosecute suspected violations of law;	1989

(2) Prevent or prohibit a person from disclosing voluntarily	1990
any information concerning viatical settlement fraud to a law	1991
enforcement or regulatory agency other than the department of	1992
insurance;	1993

(3) Limit any power granted elsewhere by the law of this	1994
state to the superintendent or an insurance fraud unit to	1995
investigate and examine possible violations of law and to take	1996
appropriate action against wrongdoers.	1997

(G)(1) Viatical settlement providers and viatical settlement	1998
brokers shall adopt and have in place antifraud initiatives	1999
reasonably calculated to detect, prosecute, and prevent	2000
fraudulent viatical settlement acts. At the discretion of the	2001
superintendent, the superintendent may order, or a licensee	2002
viatical settlement provider or viatical settlement broker may	2003
request and the superintendent may grant, any modifications of	2004
the following required initiatives described in divisions	2005
(G)(1)(a) and (b) of this section that are necessary to ensure	2006
an effective antifraud program. The modifications may be more or	2007
less restrictive than the required initiatives so long as the	2008
modifications may reasonably be expected to accomplish the	2009
purpose of this section. Antifraud initiatives under this	2010
division shall include all of the following:	2011

(a) Fraud investigators, who may be licensed viatical	2012
settlement provider or licensed viatical settlement broker	2013
employees or independent contractors;	2014

(b) An antifraud plan that includes, but not is not limited	2015
to, all of the following:	2016

(i) A description of the procedures for detecting and	2017
investigating possible fraudulent viatical settlement acts and	2018
procedures for resolving material inconsistencies between medical	2019
records and insurance applications;	2020

(ii) A description of the procedures for reporting possible	2021
fraudulent viatical settlement acts to the superintendent;	2022

(iii) A description of the plan for atifraudantifraud	2023
education and training of underwriters and other personnel;	2024

(iv) A description or charpchart outlining the	2025
organizational arrangement of the antifraud personnel who are	2026
responsible for the investigation and reporting of possible	2027
fraudulent viatical settlement acts and investigating unresolved	2028
material inconsistencies between medical records and insurance	2029
applications;	2030

(v) A description of the procedures used to perform initial	2031
and continuing review of the accuracy of life expectancies used in	2032
connection with a viatical settlement contract.	2033

(2) The superintendent, by rule adopted in accordance with	2034
Chapter 119. of the Revised Code, may require that antifraud plans	2035
required under division (G)(1) of this section be submitted to the	2036
superintendent. If the superintendent requires that antifraud	2037
plans be submitted to the superintendent, the plans so submitted	2038
are privileged and confidential, are not a public record open for	2039
inspection under section 149.43 of the revised codeRevised Code,	2040
and are not subject to discovery or subpoena in a civil or	2041
criminal action.	2042

(H) No insurer that issued a policy being viaticated shall be	2043
responsible, under this chapter, for any act or omission of a	2044
viatical settlement broker or viatical settlement provider	2045
arising out of or in connection with the viatical settlement	2046
transaction unless the insurer receives compensation for the	2047
placement of a viatical settlement contract from the viatical	2048
settlement provider or viatical settlement broker in connection	2049
with the viatical settlement contract.	2050

Sec. 3916.19.  (A) In addition to the penalties and other	2051
enforcement provisions contained in this chapter, if any person	2052
violates any provision of this chapter or any rule or regulation	2053
implementing any provision of this chapter that constitutes a	2054
fraudulent viatical settlement act, the superintendent of	2055
insurance may seek an injunction in a court of competent	2056
jurisdiction and may apply for any temporary or permanent order	2057
that the superintendent determines is necessary to restrain the	2058
person from committing the violation.	2059

(B) Any person damaged by any act of a person in violation of	2060
any provision of this chapter may bring a civil action against the	2061
person committing the violation in a court of competent	2062
jurisdiction. A civil action brought under this division does not	2063
preclude the superintendent from exercising any regulatory,	2064
enforcement, or other authority available to the superintendent	2065
under this chapter.	2066

(C) In addition to the penalties and other enforcement	2067
provisions contained in this chapter, any person who violates any	2068
provision of this chapter that constitutes a fraudulent viatical	2069
settlement act is subject to a civil penalty of up to ten thousand	2070
dollars per violation. Imposition of civil penalties described in	2071
this division shall be pursuant to an order of the superintendent	2072
issued under Chapter 119. of the Revised Code. The	2073
superintendent's order may require a person found to be in	2074
violation of this chapter to make restitution to persons aggrieved	2075
by violations of this chapter.	2076

(D) Any transaction related to the sale or financing of an	2077
interest or investment in a viatical settlement is subject to	2078
Chapter 1707. of the Revised Code and the rules adopted	2079
thereunder. Nothing in this chapter shall preempt, supersede, or	2080
limit the application of Chapter 1707. of the Revised Code and the	2081
rules adopted thereunder.	2082

Sec. 3916.20.  The superintendent of insurance may adopt	2083
rules in accordance with Chapter 119. of the Revised Code for	2084
purposes of implementing this chapter, including, but not limited	2085
to, rules that do the following:	2086

(A) Govern the relationship and responsibilities of both	2087
insurers and, viatical settlement providers, and viatical	2088
settlement brokers during the viatication of a life insurance	2089
policy or certificate.	2090

(B) Establish standards for evaluating the reasonableness of	2091
payments under viatical settlement contracts for persons with a	2092
terminal or chronic illness or condition. This authority includes,	2093
but is not limited to, the regulation of discount rates used to	2094
determine the amount paid in exchange for the assignment,	2095
transfer, sale, devise, or bequest of a benefit under a life	2096
insurance policy or certificateinsuring persons with a terminal	2097
or chronic illness or condition.	2098

(C) Establish appropriate licensing requirements, fees, and	2099
standards for continued licensure for viatical settlement	2100
providers and, viatical settlement brokers, and life expectancy	2101
providers;	2102

(D) Require a bond or other mechanism for ensuring the	2103
financial accountability of viatical settlement providers and	2104
viatical settlement brokers.	2105

Sec. 3916.99.  (A) Whoever violates section 3916.02 of the	2106
Revised Code is guilty of a felony of the third degree.	2107

(B) Whoever violates division (A)(1) of section 3916.18	2108
3916.171 of the Revised Code is guilty of a violation of section	2109
2913.02 of the Revised Code.	2110

Section 2.  That existing sections 3916.01, 3916.02, 3916.03,	2111
3916.05, 3916.06, 3916.07, 3916.08, 3916.09, 3916.10, 3916.11,	2112
3916.12, 3916.13, 3916.14, 3916.15, 3916.16, 3916.17, 3916.18,	2113
3916.19, 3916.20, and 3916.99 of the Revised Code are hereby	2114
repealed.	2115

Section 3. Division (A) of section 3916.02 as amended by this	2116
act shall take effect 90 days after the effective date of this	2117
act.	2118