Section 1. That sections 1321.72, 1321.78, 3916.01, 3916.02, | 7 |
3916.03,
3916.05,
3916.06, 3916.07, 3916.09, 3916.10, 3916.11, | 8 |
3916.12,
3916.13, 3916.14, 3916.15, 3916.16, 3916.17, 3916.18, | 9 |
3916.19,
3916.20, and 3916.99 be amended and sections 3911.021, | 10 |
3916.031,
3916.171, 3916.172, and 3916.173
of the Revised Code be | 11 |
enacted to read as follows: | 12 |
(D) Persons lawfully doing business under the authority of | 25 |
any law of this state, another state, or the United States | 26 |
relating to banks,
savings banks, trust companies, savings and | 27 |
loan associations,
lenders authorized to make loans pursuant to | 28 |
sections 1321.01 to
1321.19 of the Revised Code, lenders | 29 |
authorized to
make loans pursuant to sections 1321.51 to 1321.60 | 30 |
of
the Revised Code, or any credit union; | 31 |
(D) Notwithstanding divisions (C) and (D) of section 1321.72 | 59 |
of the Revised Code, in the case of a life insurance policy, any | 60 |
premium finance company shall give notice of its financing to the | 61 |
insurer either prior to the issuance of the life insurance policy | 62 |
if the financing agreement is accepted prior to the issuance of | 63 |
the policy or prior to the completion of the premium financing | 64 |
transaction if the financing agreement is accepted after the | 65 |
issuance of the policy. | 66 |
Sec. 3911.021. Any insurance company that issues life | 72 |
insurance policies in this state shall file electronically, in a | 73 |
format prescribed by the superintendent of insurance, on or before | 74 |
June first of each year, a description of the measures taken by | 75 |
the insurance company to detect and prevent stranger-originated | 76 |
life insurance. The description shall be attested to by an officer | 77 |
of the company. The reports shall be maintained by the | 78 |
superintendent as confidential and not a matter of public record. | 79 |
(A)
"Advertising" means any
written, electronic, or printed | 83 |
communication or any communication by means of
recorded telephone | 84 |
messages or
transmitted on radio, television, the internet, or | 85 |
similar
communications media, including, but not limited to, film | 86 |
strips,
motion pictures, and videos, that is directly or | 87 |
indirectly
published, disseminated, circulated, or placed directly | 88 |
or indirectly
before
the public in this state
for the purpose of | 89 |
creating an
interest in or
inducing
a person to purchase or | 90 |
sell, assign,
devise, bequest, or transfer
the death benefit or | 91 |
ownership of a
life insurance policy pursuant
to a viatical | 92 |
settlement
contract. | 93 |
(B)
"Business of viatical settlements" means an activity | 94 |
involved, but not limited to,
in the offering, solicitation, | 95 |
negotiation, procurement,
effectuation, purchasing, investing, | 96 |
financing, monitoring,
tracking,
underwriting, selling, | 97 |
transferring, assigning,
pledging, or
hypothecating or in any | 98 |
other manner acquiring an
interest in a policy by
means of | 99 |
viatical
settlement contracts or
purchase
agreements or
any | 100 |
similar
activity related to viatical
settlement
contracts or | 101 |
purchase
agreements. | 102 |
(1) Being unable to perform, without
substantial assistance | 106 |
from another individual, at least two
activities of daily
living, | 107 |
including, but not limited to, eating,
toileting,
transferring, | 108 |
bathing, dressing, or continence for at least ninety days due to a | 109 |
loss of functional capacity; or | 110 |
(D) "Escrow agent" means an independent third-party person | 119 |
who, pursuant to a written agreement signed by the viatical | 120 |
settlement provider and viator, provides escrow services related | 121 |
to the acquisition of a policy pursuant to a
viatical settlement | 122 |
contract. "Escrow agent" does not include any
person associated | 123 |
with, affiliated with, or under the control of a
person licensed | 124 |
under this chapter or described in division (C) of section 3916.02 | 125 |
of the Revised Code. | 126 |
(E)(1)
"Financing entity" means an underwriter, placement | 127 |
agent,
lender, purchaser of securities, purchaser of a policy or | 128 |
certificate from a
viatical settlement provider, credit enhancer, | 129 |
or any other person that
has a direct ownership interest in a | 130 |
policy or certificate
that is the subject of a viatical settlement | 131 |
contract and to which both of the
following apply: | 132 |
(1) Presenting, causing to be presented, or preparing with | 146 |
knowledge or belief that it will be presented to or by a viatical | 147 |
settlement provider, viatical settlement broker, viatical | 148 |
settlement
purchaser, financing entity,
insurer, insurance | 149 |
broker,
insurance
agent, or any other person,
any false material | 150 |
information, or
concealing any material
information, as part of, | 151 |
in support of, or
concerning a fact
material to, one or more of | 152 |
the following: | 153 |
(3) Presenting, causing to be presented, or preparing with | 187 |
knowledge or reason to believe that it will be presented, to or by | 188 |
a
viatical settlement provider, viatical settlement broker, | 189 |
insurer,
insurance agent, financing entity, viatical settlement | 190 |
purchaser,
or any other person, in connection with a viatical | 191 |
settlement
transaction or insurance transaction, an insurance | 192 |
policy or
certificate that the actor knows was fraudulently | 193 |
obtained by the
insured, the owner, or any agent of the insured or | 194 |
owner; | 195 |
(4) Committing any embezzlement, theft, misappropriation, or | 196 |
conversion of moneys, funds, premiums, credits or other property | 197 |
of a
viatical settlement provider, insurer, insured, viator, | 198 |
insurance
policyowner, or any other person engaged in the business | 199 |
of
viatical settlements or insurance; | 200 |
(I) Notwithstanding section 1.59 of the Revised Code, | 210 |
"person"
means a natural person or a legal entity, including, but | 211 |
not limited to,
an individual, partnership, limited liability | 212 |
company, limited liability partnership, association,
trust, | 213 |
business trust, or corporation. | 214 |
(H)(K)
"Related provider trust" means a titling trust or any | 220 |
other
trust established by a licensed viatical settlement provider | 221 |
or a financing entity for the sole purpose of holding ownership or | 222 |
beneficial interest in purchased policies in connection with a | 223 |
financing transaction, provided that the trust has a written | 224 |
agreement with the licensed viatical settlement provider under | 225 |
which the licensed viatical settlement provider is responsible for | 226 |
ensuring compliance with all statutory and regulatory requirements | 227 |
and under which the trust agrees to make all records and files | 228 |
related to viatical settlement transactions available to the | 229 |
superintendent of insurance as if those records and files were | 230 |
maintained
directly by the licensed viatical settlement provider. | 231 |
(K)(N)
"Viatical settlement broker" means a
person that, on | 245 |
behalf
of a viator and for a fee, commission, or
other valuable | 246 |
consideration, offers
or attempts to negotiate
viatical | 247 |
settlements between a viator and one or more
viatical
settlement | 248 |
providers or viatical settlement brokers.
"Viatical settlement | 249 |
broker" does
not include
an
attorney, a certified public | 250 |
accountant, or a
financial planner
accredited
by a nationally | 251 |
recognized
accreditation agency, who is
retained to
represent the | 252 |
viator and,
whose compensation is not
paid directly or indirectly | 253 |
by the
viatical settlement provider or
purchaser. | 254 |
(1)(a) A written agreement establishingbetween a viator and | 257 |
a viatical settlement provider that establishes the terms under | 258 |
which
compensation or any thinganything of value, that is less | 259 |
than the expected
death
benefit of the insurance policy is or | 260 |
certificate will be
paid
in return
for the viator's present or | 261 |
future assignment,
transfer,
sale, release, devise, or
bequest | 262 |
of
the death benefit
or ownership of any
portion of the | 263 |
insurance policy or
certificate of insuranceany beneficial | 264 |
interest in the policy
or
its ownership; | 265 |
(3) An agreement to transfer ownership or change the | 271 |
beneficiary
designation of the policy or certificate at a later | 272 |
date, regardless of
the date that compensation is paid to the | 273 |
viator(b) The transfer or acquisition for compensation or | 274 |
anything of value for ownership or beneficial interest in a trust | 275 |
or an interest in another person that owns such a policy if the | 276 |
trust or other person was formed or availed of for the
principal | 277 |
purpose of
acquiring one or more life insurance
policies; | 278 |
(b) Loan proceeds that are used solely to pay premiums for | 296 |
the policy and the costs of the loan including interest, | 297 |
arrangement fees, utilization fees and similar fees, closing | 298 |
costs, legal fees and expenses, trustee fees and expenses, and | 299 |
third-party collateral provider fees and expenses, including fees | 300 |
payable to letter of credit issuers; | 301 |
(c) A loan made by a regulated financial institution in which | 302 |
the lender takes an interest in a policy solely to
secure | 303 |
repayment of a loan or, if there is a default on the loan
and the | 304 |
policy is transferred, the transfer of such a policy by
the | 305 |
lender, provided that neither the default itself nor the
transfer | 306 |
is pursuant to an agreement or understanding with any
other | 307 |
person for the purpose of evading regulation under this
chapter; | 308 |
(O)(R)
"Viator" means the owner of a life insurance policy or | 381 |
a
certificate holder under a group policy
that has not previously | 382 |
been viaticated who, in return for
compensation or any thing | 383 |
anything of
value that is less than the expected
death
benefit of | 384 |
the policy
or certificate, assigns, transfers,
sells, releases, | 385 |
devises, or bequests
the death benefit or ownership of any | 386 |
portion of
the insurance
policy or certificate of insurance. For | 387 |
the
purposes of this
chapter, a
"viator" is not limited to an | 388 |
owner of
a life insurance
policy or a certificate holder under a | 389 |
group
policy insuring the
life of an individual with a terminal | 390 |
or
chronic illness or
conditionwho is terminally or chronically | 391 |
ill except where specifically addressed.
"Viator" does not | 392 |
include any of the following: | 393 |
(P)(S)
"Viatical settlement purchaser" means a person who | 401 |
givesprovides a
sum of money as consideration for a life | 402 |
insurance policy or an
interest in the death benefits of a life | 403 |
insurance policy from a viatical settlement provider that is the | 404 |
subject of a
viatical settlement contract, or a
person who owns, | 405 |
acquires, or
is entitled to a beneficial interest
in a trust or | 406 |
person that owns a
viatical settlement contract or is the | 407 |
beneficiary of a life
insurance policy that has been or will be | 408 |
is
the subject of a
viatical settlement contract, for the purpose | 409 |
of
deriving an
economic benefit.
"Viatical settlement purchaser" | 410 |
does
not include
any of the following: | 411 |
(S)
"Securities Act of 1933" has the same
meaning as in | 427 |
section
1707.01 of the Revised Code(X) "Regulated financial | 428 |
institution" means a bank, a savings association, or credit union | 429 |
operating under authority granted by the superintendent of | 430 |
financial institutions, the regulatory authority of any other | 431 |
state of the United States, the office of thrift supervision, the | 432 |
national credit union administration, or the office of the | 433 |
comptroller of the currency. | 434 |
Sec. 3916.02. No(A) Notwithstanding division (C) of this | 454 |
section, no person shall operate in this state as a
viatical | 455 |
settlement provider or viatical settlement broker without
first | 456 |
having obtained a license from
the superintendent of
insurance | 457 |
and, if different fromthe owner
of the policy to be viaticated | 458 |
is not a resident of this
state,
from the comparable
official of | 459 |
the state of residence
of
the
viatorowner if that state issues | 460 |
licenses for viatical settlement providers or viatical settlement | 461 |
brokers. If | 462 |
(B)(1) If there is
more than one viatorowner on a single | 463 |
policy
or
certificate and the
viatorsowners are residents of | 464 |
different
states, the
viatical settlement contract
shall be | 465 |
governed by
the law of
the state in
which the viatorowner | 466 |
having the largest
percentage
ownership of the
policy or | 467 |
certificate resides or, if
the viatorsowners hold equal | 468 |
ownership, the
state of residence
of one viatorowner agreed | 469 |
upon in
writing by all
viatorsowners. | 470 |
(C)(1) A person who represents the viator and is not | 476 |
compensated
directly or indirectly by the viatical settlement | 477 |
provider or viatical settlement purchaser, who is
licensed as an | 478 |
attorney, certified public
accountant, or financial
planner | 479 |
accredited by a nationally
recognized accreditation agency
may | 480 |
negotiate viatical settlement
contracts on behalf of a viator | 481 |
without obtaining a license
pursuant to division (A) of this | 482 |
section. | 483 |
(2) An individual insurance agent, in good standing, who has | 484 |
been licensed as a resident or nonresident insurance agent with a | 485 |
life line of authority in this state for at least five years may | 486 |
operate as a viatical settlement broker without obtaining a | 487 |
license pursuant to division (A) of this section if the viatical | 488 |
settlement broker activities of the
insurance agent are | 489 |
incidental to the insurance agent's insurance
business | 490 |
activities. | 491 |
(B) A license issued under
this
chapter to a person other | 498 |
than an individual authorizes all
partners, officers, members, or | 499 |
designated employees of the person
to act as viatical settlement | 500 |
providers or viatical settlement
brokers, as applicable, and all | 501 |
those partners, officers, members,
or designated employees shall | 502 |
be named in the application and any
supplements to the | 503 |
application. | 504 |
(E) An applicant shall provide all information requested by | 557 |
the
superintendent. The superintendent may, at any time, require | 558 |
an applicant to
fully disclose the identity of all stockholders | 559 |
shareholders,
partners, officers, members,
and employees, and may, | 560 |
in the
exercise of the superintendent's discretion,
refuse to | 561 |
issue a
license to an applicant that is not an individual if the | 562 |
superintendent is not
satisfied that each officer, employee, | 563 |
stockholdershareholder, partner, or member who may
materially | 564 |
influence the
applicant's conduct meets the standards set forth in | 565 |
this chapter. | 566 |
(E)(F) Except as otherwise provided in this division, a | 567 |
license
as a
viatical settlement provider or viatical settlement | 568 |
broker
expires on the last
day of
March next after its issuance | 569 |
or
continuance. A license as a
viatical settlement provider
or | 570 |
viatical settlement broker may, in the
discretion of the | 571 |
superintendent and the payment of an annual renewal fee | 572 |
established
by the superintendent by rule adopted in accordance | 573 |
with
chapterChapter 119.
of the Revised Code, be continued past | 574 |
the last
day of March next after its issue
and after the last day | 575 |
of March
in each succeeding year. Failure
to pay the renewal fee | 576 |
by the
required date results in the expiration of the
license. | 577 |
(G)(I) A viatical settlement
provider
or viatical settlement | 592 |
broker shall provide to the
superintendent new or
revised | 593 |
information regarding any change
in
its officers, any shareholder | 594 |
owning ten per cent or
more of its
stockholdersvoting | 595 |
securities, or its partners,
directors,
members, or
designated | 596 |
employees within thirty days of the change. | 597 |
Sec. 3916.05. (A) A person shall not use a viatical | 607 |
settlement
contract form or provide a disclosure statement form to | 608 |
a viator in this state
unless the viatical settlement contract | 609 |
form or the disclosure statement form
is filed with and approved | 610 |
by the superintendent of
insurance. The superintendent shall | 611 |
disapprove a viatical settlement contract
form or a disclosure | 612 |
statement form if, in the superintendent's opinion, the
viatical | 613 |
settlement contract
form, the disclosure statement form, or any | 614 |
provision contained therein fails to meet the requirements of | 615 |
section 3916.06 of the Revised Code, is
unreasonable, is contrary | 616 |
to the
interests of the public, or is otherwise misleading or | 617 |
unfair to the
viator.
At the superintendent's
discretion, the | 618 |
superintendent
may require the submission of advertising
material | 619 |
to which
section 3916.17 of the Revised Code applies. If not | 620 |
disapproved by the superintendent, a filing made pursuant to this | 621 |
section shall be considered approved forty-five days after the | 622 |
contract form, disclosure form, or advertising material is filed. | 623 |
(B) Any insurance company that issues life insurance | 624 |
policies
in this state shall include questions in its life | 625 |
insurance
applications that
are reasonably structured to | 626 |
identify and
prevent stranger-originated
life insurance. The | 627 |
superintendent
shall adopt rules under Chapter
119. of the | 628 |
Revised Code for the
implementation of this section. Each insurer | 629 |
shall file with the
superintendent copies of its amended | 630 |
applications for life
insurance with twelve months following the | 631 |
effective date of the
superintendent's adoption of rules pursuant | 632 |
to this division. | 633 |
(e) That the viator has a right to rescind the viatical | 660 |
settlement
contract for at least fifteen calendar days after the | 661 |
viator receives the
viatical
settlement proceeds, as provided in | 662 |
section 3916.08 of
the
Revised Code,. If the insured dies during | 663 |
the
rescission period, the viatical settlement contract shall be | 664 |
deemed to
have been
rescinded, subject to repayment of all | 665 |
viatical
settlement proceeds to the
viatical settlement
company. | 666 |
(h) That following execution of the viatical settlement | 678 |
contract, the viatical settlement provider or the
authorized | 679 |
representative of the
viatical settlement provider may
contact | 680 |
the insured for the purpose
of determining the
insured's
health | 681 |
status and to confirm the
insured's residential
or
business | 682 |
address and telephone number or
for other purposes
permitted by | 683 |
law. Any such contact shall be
limited to once in
any | 684 |
three-month period if the insured has a
life expectancy of
more | 685 |
than one year or to once per month if the
insured has a life | 686 |
expectancy of one year or less. | 687 |
"All medical, financial, or personal information solicited or | 701 |
obtained by a viatical settlement provider or viatical settlement | 702 |
broker
about an insured, including the insured's identity or the | 703 |
identity
of family members, a spouse, or a significant other may | 704 |
be disclosed as
necessary to effect the viatical settlement | 705 |
between the viator and
the viatical settlement provider. If you | 706 |
are asked to provide
this information, you will be asked to | 707 |
consent to the disclosure.
The information may be provided to | 708 |
someone who buys the policy or
provides funds for the purchase. | 709 |
You may be asked to renew your
permission to share information | 710 |
every two years." | 711 |
(e)(f) The dollar amount of the current death benefit payable | 735 |
to
the viatical
settlement provider under the policy or | 736 |
certificate,
and, if known, the
availability of any additional | 737 |
guaranteed
insurance benefits, the dollar
amount of any | 738 |
accidental
death and
dismemberment benefits under the policy or | 739 |
certificate,
and the
viatical settlement provider'sextent to | 740 |
which the
viator's
interest in those
benefits will be | 741 |
transferred as a
result of the
viatical settlement contract. | 742 |
(f) The name, business
address, and telephone number of the | 743 |
independent third-party
escrow agent, and the fact that the | 744 |
viator
or owner
may inspect or
receive
copies of the relevant | 745 |
escrow or
trust agreements or
documents(g) That an escrow agent | 746 |
shall provide escrow services to the parties pursuant to a written | 747 |
agreement, signed by the viatical settlement provider, the | 748 |
viatical settlement broker, and the viator. At the close of | 749 |
escrow, the escrow agent will distribute the proceeds of the sale | 750 |
to the viator, minus any compensation to be paid to any other | 751 |
persons who provided services and to whom the viator has agreed to | 752 |
compensate out of the gross amount offered by the viatical | 753 |
settlement purchaser. All persons receiving any form of | 754 |
compensation under the escrow agreement shall be clearly | 755 |
identified, including name, business address, telephone number, | 756 |
and tax identification number. | 757 |
(d) The amount and method of calculating the viatical | 769 |
settlement
broker's compensation and, if any portion of
the | 770 |
viatical settlement broker's
compensation is taken
from the | 771 |
viatical settlement offer, the
total amount of the
viatical | 772 |
settlement offer and the viatical settlement
broker's | 773 |
compensation as a percentage of that total. As used in
this | 774 |
division, "compensation" includes anything of value paid or
given | 775 |
to a viatical settlement broker related to the settlement
of a | 776 |
policy. | 777 |
(B) Within twenty days after a viator executes
documents | 804 |
necessary to transfer any rights under an insurancea
policy or | 805 |
certificate or within twenty days of entering any
expressed or | 806 |
implied
agreement, option,
promise, or other form of
understanding | 807 |
to viaticate the policy,
the viatical settlement
provider
shall | 808 |
give written notice to the
insurer that issued that
insurance | 809 |
policy or certificate that the
policy or certificate has
or will | 810 |
become a viaticated policy or
certificate. The notice
shall be | 811 |
accompanied by the documents
required by division (C) of
this | 812 |
section. | 813 |
(C) The viatical settlement provider shall deliver a
copy of | 814 |
the
medical
release required under division (A)(2) of
this | 815 |
section, a
copy of
the viator's application for the viatical | 816 |
settlement
contract, the
notice required under division (B) of | 817 |
this section,
and a request
for verification of coverage to the | 818 |
insurer that
issued the life
insurance policy or certificate that | 819 |
is the
subject of the
viatical transaction. The viatical | 820 |
settlement
provider shall
use the NAIC's
form for verification of | 821 |
coverage
unless standards for
verification areanother form is | 822 |
developed or
approved by
the superintendent of insurance. | 823 |
(D) The insurer shall respond to a request for verification | 824 |
of
coverage submitted on an approved form by a viatical | 825 |
settlement provider or viatical settlement broker
within
thirty | 826 |
calendar days
after the date the request
is
received and
shall | 827 |
indicate whether,
based on the medical
evidence
and
documents | 828 |
provided, the insurer
intends to pursue an
investigation at that | 829 |
time regarding possible
fraud or the
validity of the life | 830 |
insurance contract or
certificatepolicy that is
the subject of | 831 |
the
request.
The insurer shall
accept an original
or facsimile | 832 |
or
electronic copy of such request
and any
accompanying | 833 |
authorization signed by the viator. | 834 |
(E) Prior to or at the time of execution of the viatical | 835 |
settlement contract, the viatical settlement provider
shall | 836 |
obtain
a witnessed
document in which the viator consents to
the | 837 |
viatical
settlement contract, represents that the viator has a | 838 |
full and
complete understanding of the viatical settlement | 839 |
contract and a
full and complete understanding of the benefits of | 840 |
the life
insurance policy or certificate, and acknowledges that | 841 |
the viator
is entering into the viatical settlement contract | 842 |
freely and
voluntarily and, for persons with a terminal or chronic | 843 |
illness or
conditionwho are terminally or chronically ill, | 844 |
acknowledges that the insured has a terminal
or chronic
illnessis | 845 |
terminally or chronically ill and that the terminal or chronic | 846 |
illness or
condition was
diagnosed after the life insurance policy | 847 |
or
certificate was
issued. | 848 |
Sec. 3916.09. (A) The viatical settlement provider
shall | 856 |
instruct
the viator to send the executed documents required
to | 857 |
effect the change in
ownership, assignment, or
change in | 858 |
beneficiary directly to the independent escrow agent. Within
three | 859 |
business days after the
date the escrow agent receives the | 860 |
documents, or from the date the viatical settlement
provider | 861 |
receives the documents if the viator
erroneously provides
the | 862 |
documents directly to the viatical settlement
provider, the | 863 |
viatical settlement
provider shall pay or
transfer
the proceeds of | 864 |
gross amount to be paid by the viatical
settlement provider to an | 865 |
the
escrow oragent for deposit in a
trust or escrow
account set | 866 |
up for that
purpose by the escrow agent in a state or federally | 867 |
charteredregulated
financial
institution whose deposits
are | 868 |
insured by
the federal
deposit
insurance corporation.
Upon | 869 |
payment of the
settlement
proceeds
into the escrow or trust | 870 |
account, the escrow
agent
or
trustee
shall deliver the original | 871 |
change in ownership,
assignment,
or
change in beneficiary forms | 872 |
to
the viatical
settlement provider, a representative of the | 873 |
viatical settlement
provider, or
related provider trust. Upon the | 874 |
licensed
provider'sescrow agent's receipt of
the acknowledgment | 875 |
of the
properly completed transfer of
ownership,
assignment, or | 876 |
designation of beneficiary from the
insurance
company, the | 877 |
licensed providerescrow agent shall instruct the escrow
agent to | 878 |
pay the settlement proceeds to the viator and any other person | 879 |
pursuant to the viatical settlement contract and the escrow | 880 |
agreement. The escrow
agent shall
make payment within three | 881 |
business days of the date
the providerescrow agent
received the | 882 |
acknowledged
forms from the insurance
company. Funds
are | 883 |
considered sent to
a viator as of the
date that the
escrow | 884 |
agent either releases the
funds for wire
transfer to the
viator | 885 |
or places a check for
delivery to the
viator via United
States | 886 |
postal service or other
nationally
recognized delivery
service. | 887 |
(B) Failure to transfer the proceeds to the viator within
the | 888 |
period of time disclosed pursuant to division (A)(1)(f)
of
section | 889 |
3916.06 of the Revised Code renders the viatical
settlement | 890 |
contract voidable by the viator for lack of
consideration until | 891 |
the time
consideration is tendered to and
accepted by the viator. | 892 |
If a viatical settlement
contract is
voided by the viator pursuant | 893 |
to this division, ownership of
the
insurance policy or certificate | 894 |
reverts to the viator or to
the
viator's estate if the viator is | 895 |
deceased, irrespective of any
transfer of ownership of the policy | 896 |
or certificate by the viator, viatical settlement
provider, or | 897 |
any other person. | 898 |
Sec. 3916.10. After a viatical settlement has occurred, | 899 |
contact with the insured for the purpose of
determining the health | 900 |
status of the insured by the viatical settlement
provider
or | 901 |
viatical settlement broker shall be made only by the
viatical | 902 |
settlement provider or broker licensed
in
this state, or the | 903 |
authorized
representative of the viatical
settlement
provider. | 904 |
The viatical
settlement
provider or viatical
settlement broker, | 905 |
or
authorized
representative shall
not contact the insured for | 906 |
the
purpose of
determining
the
insured's health status more than | 907 |
once
every three
months if the
insured
has a life expectancy of | 908 |
more
than one year,
or more than
once per month if
the insured | 909 |
has a
life expectancy
of one year or
less. The viatical | 910 |
settlement
provider or viatical settlement
broker shall
explain | 911 |
the
procedure
for making these contacts at
the time the
viatical | 912 |
settlement
contract is
entered into. | 913 |
(2) Every licensee, or
person from whom
information is | 954 |
sought, and
all officers,
directors, employees,
and agents of | 955 |
any
licensee, or person
from whom
information is
sought, shall | 956 |
provide
to the examiners timely,
convenient, and
free access at | 957 |
all
reasonable hours at the
licensee's or person's offices to all | 958 |
books,
records, accounts,
papers, documents, assets, and computer | 959 |
or
other recordings
relating to the property, assets, business, | 960 |
and
affairs of the
licensee being
examined. The officers, | 961 |
directors, employees, and
agents of the
licensee or person shall | 962 |
facilitate the examination
and aid in the
examination so far as | 963 |
it
is in their power to do
so. | 964 |
The refusal of a licensee, by its officers,
directors, | 965 |
employees,
or agents, to
submit to examination or to
comply with | 966 |
any reasonable
written
request of the superintendent
shall be | 967 |
grounds for suspension,
revocation, denial of issuance,
or | 968 |
nonrenewal of any license or
authority held by the licensee to | 969 |
engage in the business of
viatical
settlement business | 970 |
settlements or other business
subject to the
superintendent's | 971 |
jurisdiction. Any proceedings for
suspension,
revocation, denial, | 972 |
or nonrenewal ofrefusal to renew any license or
authority
isare | 973 |
subject
to chapterChapter 119. of the Revised Code. | 974 |
(3) The superintendent has the power to issue subpoenas, to | 975 |
administer oaths, and to examine under oath any person as to any | 976 |
matter
pertinent to the examination. Upon the failure or refusal | 977 |
of a
person to obey a subpoena, the superintendent may petition a | 978 |
court
of competent jurisdiction, and, upon proper showing, the | 979 |
court may
enter an order compelling the witness to appear and | 980 |
testify or
produce documentary evidence. Failure to obey the court | 981 |
order
shall be punishable as contempt of court. | 982 |
(4) When making an examination under this chapter, the | 983 |
superintendent may retain attorneys, appraisers, independent | 984 |
actuaries,
independent certified public accountants, or other | 985 |
professionals and
specialists as examiners, and the licensee that | 986 |
is the subject of
the
examination shall
bear the cost of those | 987 |
examiners pursuant to division (F) of this section. Examiners
who | 988 |
are appointed by
the superintendent, but
who are not employees
of | 989 |
the department
of insurance, shall be
compensated for their
work, | 990 |
travel, and
living expenses at
reasonable and customary
rates. | 991 |
(6) Nothing contained in this chapter limits the | 998 |
superintendent's
authority to use and, if appropriate, to make | 999 |
public any final or preliminary
examination report, any examiner | 1000 |
or licensee working papers or
other
documents, or
any other | 1001 |
information discovered or developed
during
the course
of any | 1002 |
examination in the furtherance of any
legal or
regulatory
action | 1003 |
that the superintendent, in the
superintendent's
sole | 1004 |
discretion,
considers appropriate. | 1005 |
(C)(1) Examination reports shall be comprised of only facts | 1006 |
appearing upon the books, records, or other documents of the | 1007 |
licensee, its
agents, or other persons examined, or as ascertained | 1008 |
from the testimony of its officers, agents, or other persons | 1009 |
examined concerning its affairs, and the conclusions and | 1010 |
recommendations that the examiners find reasonably warranted from | 1011 |
the facts. | 1012 |
(2) Upon completion of the examination, the examiner in | 1013 |
charge
shall file with the superintendent a verified written | 1014 |
report of
examination. Upon receipt of the verified report, the | 1015 |
superintendent
shall transmit the report to the licensee examined, | 1016 |
together with a
notice that
shall afford the
licensee examined a | 1017 |
reasonable
opportunity of
not more than thirty days
from receipt | 1018 |
of the
report to make a
written submission or
rebuttal with | 1019 |
respect to
any matters
contained in the examination
report. | 1020 |
(2) Except as otherwise provided in this chapter or in the | 1028 |
law of
another state or jurisdiction that is substantially similar | 1029 |
to this
chapter, all examination reports, working papers, recorded | 1030 |
information, documents, and copies of those reports, papers, | 1031 |
information, documents, and copies produced by, obtained by, or | 1032 |
disclosed to the superintendent or to any other person in the | 1033 |
course of an examination made under this chapter or under the law | 1034 |
of another state or jurisdiction that is substantially similar to | 1035 |
this chapter, or in the course of the superintendent's analysis or | 1036 |
investigation of the financial condition or market conduct of a | 1037 |
licensee are confidential by law and privileged, are not a public | 1038 |
record open for inspection under section 149.43 of the Revised | 1039 |
Code, are not subject to subpoena, and are not subject to | 1040 |
discovery or admissible in evidence in any private civil action. | 1041 |
The superintendent may use the documents, materials, or other | 1042 |
information in the furtherance of any regulatory or legal action | 1043 |
brought as part of the superintendent's official duties. | 1044 |
(3) Documents, materials, or other information, including, | 1045 |
but
not limited to, all working papers, and copies of working | 1046 |
papers, in the
possession or control of the NAIC and its | 1047 |
affiliates and
subsidiaries are confidential by law and | 1048 |
privileged, are not subject to subpoena, and are not subject to | 1049 |
discovery or
admissible in evidence in any private civil action, | 1050 |
if either of the
following applies: | 1051 |
(4) Neither the superintendent nor any person that received | 1062 |
the
documents, material, or other information while acting under | 1063 |
the
authority of the superintendent, including the NAIC and its | 1064 |
affiliates and subsidiaries, shall be permitted to testify in any | 1065 |
private
civil action concerning any confidential
documents, | 1066 |
materials, or information subject to division (D)(1) of
this | 1067 |
section. | 1068 |
(i) Share documents, materials, or other information, | 1072 |
including
the confidential and privileged documents, materials, or | 1073 |
information
subject to division (D)(1) of this section, with other | 1074 |
state, federal, and international regulatory agencies, with the | 1075 |
NAIC and its affiliates and subsidiaries, and with
state, federal, | 1076 |
and international law enforcement authorities, if
the recipient | 1077 |
agrees to maintain the confidentiality and
privileged status of | 1078 |
the document, material, communication, or
other information; | 1079 |
(ii) Receive documents, materials, communications, or | 1080 |
information, including otherwise confidential and privileged | 1081 |
documents,
materials, or information, from the NAIC and its | 1082 |
affiliates
and subsidiaries, and from regulatory and law | 1083 |
enforcement officials of other foreign or
domestic jurisdictions; | 1084 |
(8) Nothing contained in this chapter prevents or prohibits | 1103 |
the
superintendent from disclosing the content of an examination | 1104 |
report, preliminary examination report or results, or any matter | 1105 |
relating to those reports or results, to the official of any other | 1106 |
state or country that is comparable to the superintendent, or to | 1107 |
law enforcement officials of this or any other state or agency of | 1108 |
the federal government at any time, or to the NAIC, if the agency | 1109 |
or office receiving the report or matters relating to it agrees in | 1110 |
writing to hold it confidential and in a manner
consistent with | 1111 |
this chapter. | 1112 |
(2) Notwithstanding the requirements of division (E) of this | 1124 |
section, the superintendent may retain from time to time, on an | 1125 |
individual basis, qualified actuaries, certified public | 1126 |
accountants, or other similar individuals who are independently | 1127 |
practicing their professions, even though these persons may from | 1128 |
time to time be similarly employed or retained by persons subject | 1129 |
to examination under this chapter. | 1130 |
(3) Upon an insurer's failure to comply with
division (A) of | 1149 |
this
section, the
superintendent may initiate
proceedings in | 1150 |
accordance with
Chapter
119. of the Revised Code
to revoke, | 1151 |
suspend, or
refuse to renew
the certificate of
authority or | 1152 |
license of the insurer. Additionally, theThe superintendent
may | 1153 |
request the attorney
general to initiate a civil
action in
the | 1154 |
court of common pleas of
Franklin county to obtain
and
enforce a | 1155 |
judgment for expenses
incurred in the performance of a
market | 1156 |
conduct examination. | 1157 |
(2) No cause of action shall arise nor shall any liability
be | 1163 |
imposed against any person for the act of communicating or | 1164 |
delivering
information or data to the superintendent, any | 1165 |
authorized representative
of the superintendent, or any examiner | 1166 |
appointed by the
superintendent pursuant to an examination made | 1167 |
under this chapter,
if the act of communication or delivery was | 1168 |
performed in good
faith and without fraudulent intent or the | 1169 |
intent to deceive.
Division (G)(2) of this sectionThis division | 1170 |
does not
abrogate or modify in any
way any common law or statutory | 1171 |
privilege or immunity previously enjoyed
by any person identified | 1172 |
in division (G)(1) of this
section. | 1173 |
(3) A person identified in division (G)(1) or (2) of this | 1174 |
section
shall be entitled to an award of attorney's fees and costs | 1175 |
if the
person is the prevailing party in a civil action for libel, | 1176 |
slander, or
any other relevant tort arising out of activities in | 1177 |
carrying out the
provisions of this chapter and the party bringing | 1178 |
the action was
not substantially justified in bringing the action. | 1179 |
For purposes
of this division (G)(3) of this section, a proceeding | 1180 |
an action
is
"substantially
justified" if it had a reasonable | 1181 |
basis in law
or
fact at the time that
it was initiated. | 1182 |
Sec. 3916.12. (A) Each viatical settlement provider
and | 1186 |
viatical
settlement broker licensedlicensee under this chapter | 1187 |
shall file with the
superintendent of insurance, on
or before the | 1188 |
first day of
March
of each year, an annual statement
containing | 1189 |
the information
required by the
superintendent by rule
adopted in | 1190 |
accordance with
chapter
119. of the Revised Codeverified under | 1191 |
oath by two officers in the form prescribed by the | 1192 |
superintendent. The annual statement for a viatical settlement | 1193 |
provider shall include the following information about the | 1194 |
viatical settlement provider's transactions: | 1195 |
(B) On or before the first day of May of each year, a | 1207 |
viatical settlement provider licensed in this state shall file | 1208 |
with the superintendent its financial statement, audited by an | 1209 |
independent certified public accountant along with a letter | 1210 |
stating whether any significant deficiencies or material | 1211 |
weaknesses were detected during the audit pursuant to statement on | 1212 |
auditing standards number 112 or as amended or superseded. | 1213 |
(2) Viatical settlement providers may assume that the users | 1225 |
of the interim financial statements have access to the prior | 1226 |
fiscal year-end audited financial statements and that the adequacy | 1227 |
of additional disclosure needed for a fair presentation, except in | 1228 |
regard to material contingencies, may be determined in that | 1229 |
context. A footnote disclosure that would substantially duplicate | 1230 |
the disclosure contained in the audited financial statements for | 1231 |
the preceding fiscal year may be omitted. A footnote disclosure | 1232 |
shall be provided if events subsequent to the fiscal year end have | 1233 |
a material impact on the viatical settlement provider. | 1234 |
(D) A viatical settlement provider that willfully fails to | 1235 |
file the annual statements required by this section, or willfully | 1236 |
fails to reply within thirty calendar days to a written inquiry | 1237 |
from the superintendent or the superintendent's designee, shall, | 1238 |
in addition to other penalties provided by this chapter, be | 1239 |
subject to a penalty of up to two hundred fifty dollars per day, | 1240 |
not to exceed twenty-five thousand dollars in the aggregate for | 1241 |
each such failure. | 1242 |
Sec. 3916.13. Except as otherwise permitted or required by | 1249 |
law, a viatical
settlement provider, viatical
settlement
broker, | 1250 |
insurance company, insurance agent, insurance
broker, information | 1251 |
bureau, rating agency or company, or any other
person with actual | 1252 |
knowledge of a viator or
an insured's identity, shall not | 1253 |
disclose that
identity as an insured,
including
the viator or | 1254 |
insured's name
and
individual identification data, or the viator | 1255 |
or insured's
financial or
medical information, unless
any of the | 1256 |
following apply: | 1257 |
(3) In lieu of an examination under this chapter of any | 1299 |
foreign
or alien licensee licensed under this chapter, the | 1300 |
superintendent,
at the superintendent's discretion, may accept an | 1301 |
examination
report on the licensee as prepared by the official of | 1302 |
the
licensee's state of domicile or port-of-entry state who is | 1303 |
comparable to the superintendent. As far as is practical, the | 1304 |
superintendent shall cooperate with that official for any | 1305 |
examination of a foreign or alien licensee. | 1306 |
(2) The applicant or licensee or any officer, partner, | 1319 |
member, key
management
personnel, or designee of the applicant or | 1320 |
licensee has been convicted of
fraudulent or
dishonest practices, | 1321 |
is subject
to a final administrative action in another state, has | 1322 |
been the subject of an administrative or civil action brought by | 1323 |
the department of commerce, division of securities, or
is | 1324 |
otherwise shown to be
untrustworthy or incompetent. | 1325 |
(4) The licensee or any officer, partner, member, key | 1328 |
management
personnel, or designee of the licensee has been | 1329 |
convicted of or has pleaded
guilty or no
contest
to a felony or to | 1330 |
a misdemeanor involving fraud, moral turpitude, dishonesty,
or | 1331 |
breach of trust, regardless of whether a judgment of conviction | 1332 |
has been
entered by the court. | 1333 |
(10) The licensee or any officer, partner, member, key | 1355 |
management
personnel, or designee of the licensee has committed | 1356 |
any coercive, fraudulent,
or dishonest
act, or made any untrue, | 1357 |
deceptive, or misleading statement, in connection
with a viatical
| 1358 |
settlement
transaction or a proposed viatical settlement | 1359 |
transaction. | 1360 |
(B) Before the superintendent refuses to issue a license | 1361 |
under
this chapter, or suspends, revokes, or refuses to renew
the | 1362 |
license of a
viatical settlement provider or viatical
settlement | 1363 |
broker, the superintendent
shall
provide the licensee or | 1364 |
applicant
with notice and an
opportunity
for hearing as provided | 1365 |
in
chapterChapter
119. of the
Revised
Code, except as follows: | 1366 |
(b) If the certified mail envelope is returned with an | 1375 |
endorsement showing that service was refused, or that the envelope | 1376 |
was
unclaimed, the notice and all subsequent notices required by | 1377 |
Chapter
119. of the Revised Code may be served by ordinary mail to | 1378 |
the last known address of the
licensee or applicant. The mailing | 1379 |
shall be evidenced by a certificate of
mailing. Service is deemed | 1380 |
complete as of the date of such certificate
provided that the | 1381 |
ordinary mail envelope is not returned by the postal
authorities | 1382 |
with an endorsement showing failure of delivery. The time period | 1383 |
in which to request a hearing, as provided in Chapter 119. of the | 1384 |
Revised Code,
begins to run on the date of mailing. | 1385 |
(2) Any subpoena for the appearance of a witness or the | 1404 |
production of
documents or other evidence at a hearing, or for the | 1405 |
purpose of taking
testimony for use at a hearing, shall be served | 1406 |
by certified mail, return
receipt requested, by an attorney or by | 1407 |
an employee of the department
designated by the superintendent. | 1408 |
Such subpoenas shall be enforced in the
manner provided in section | 1409 |
119.09 of the Revised Code. Nothing in this section shall be | 1410 |
construed as limiting the superintendent's other statutory powers | 1411 |
to issue
subpoenas. | 1412 |
(1) The policy or certificate was issued upon the viator's | 1428 |
exercise of conversion rights arising out of a group
policy or | 1429 |
certificate,
provided the total of the time covered
under the | 1430 |
conversion policy or
certificate plus the time covered
under the | 1431 |
groupprior policy or
certificate is at least
twenty-foursixty | 1432 |
months. The
time covered
under thea group
policy or certificate | 1433 |
shall be
calculated without
regard to any
change in insurance | 1434 |
carriers,
provided the coverage
has been
continuous and under the | 1435 |
same group
sponsorship. | 1436 |
(B)(C) Copies of the independent evidence described in | 1498 |
division
(A)(4)(B)(2) of this section and documents
required by | 1499 |
section
3916.07
of the Revised Code shall be
submitted to the | 1500 |
insurer when
the viatical settlement provider or any other party | 1501 |
entering into
a viatical settlement contract with a viator | 1502 |
submits
a request to
the insurer for
verification of coverage.
| 1503 |
The copies
shall be
accompanied by a
letter of attestation from | 1504 |
the viatical
settlement provider that
the copies are true and | 1505 |
correct
copies
of the documents received
by the viatical | 1506 |
settlement
provider. | 1507 |
(C)(D) If the viatical settlement provider submits to
the | 1508 |
insurer a
copy of the owner or insured's certification and | 1509 |
independent
evidence described
in division
(A)(4)(B)(2) of this | 1510 |
section when the
viatical settlement provider submits a
request | 1511 |
to the
insurer to effect the
transfer of the policy or | 1512 |
certificate to the viatical settlement
provider,
the
copy | 1513 |
conclusively establishes that the
viatical settlement
contract | 1514 |
satisfies the requirements of this
section, and the
insurer shall | 1515 |
timely respond to the request. | 1516 |
(E) No insurer, as a condition of responding to a request for | 1517 |
verification of coverage or effecting the transfer of a policy | 1518 |
pursuant to a viatical settlement contract, may require the | 1519 |
viator, insured, viatical settlement provider, or
viatical | 1520 |
settlement broker to sign any
form, disclosure,
consent, or | 1521 |
waiver form that has not been
approved by the
superintendent of | 1522 |
insurance for use in connection
with viatical
settlement | 1523 |
contracts. | 1524 |
(G) A viatical settlement provider or viatical settlement | 1532 |
broker that is party to a
plan, transaction,
or series of | 1533 |
transactions to originate, renew,
continue, or
finance a policy | 1534 |
with the insurer for
the purpose
of engaging in
the business of | 1535 |
viatical settlements at
any time
prior to or
during the first | 1536 |
five years after the insurer
issues
the policy
shall fully | 1537 |
disclose the plan, transaction, or
series
of
transactions to | 1538 |
the superintendent of insurance. | 1539 |
Sec. 3916.17. (A) The general assembly hereby declares
that | 1540 |
the
purpose of this section is to provide prospective viators
with | 1541 |
clear and unambiguous statements in the advertisement of
viatical | 1542 |
settlements and to assure the clear, truthful, and
adequate | 1543 |
disclosure of the benefits, risks, limitations, and
exclusions of | 1544 |
any viatical settlement contract. This purpose is
intended to be | 1545 |
accomplished by the establishment of guidelines and
standards of | 1546 |
permissible and impermissible conduct in the
advertising of | 1547 |
viatical settlements to assure that product
descriptions are | 1548 |
presented in a manner that prevents unfair,
deceptive, or | 1549 |
misleading advertising and is conducive to accurate
presentation | 1550 |
and description of viatical settlements through the
advertising | 1551 |
media and material used by viatical settlement
licensees. | 1552 |
Divisions (B) to (P) of this section apply to any | 1553 |
advertising
of
viatical settlement contracts, or any related | 1554 |
products or
services
intended for dissemination in this state, | 1555 |
including, but
not
limited to, internet advertising viewed by | 1556 |
persons located in
this
state. In cases in which disclosure | 1557 |
requirements are
established
pursuant to federal regulation, this | 1558 |
section shall be
interpreted
so as to minimize or eliminate | 1559 |
conflict with federal
regulation
wherever possible. | 1560 |
(B) Every viatical settlement licensee shall establish and
at | 1561 |
all
times shall maintain a
system of control over the content, | 1562 |
form,
and method of
dissemination of all advertisements of its | 1563 |
contracts, products,
and services. All advertisements, regardless | 1564 |
of by whom they are
written, created, designed, or presented, | 1565 |
shall be the
responsibility of the viatical settlement
licensee | 1566 |
and of
the individual whoperson that created or
presented the | 1567 |
advertisement.
A
system of control shall include
regular routine | 1568 |
notification, at
least once a year, to agents and
others | 1569 |
authorized by the
viatical
settlement licensee who disseminate | 1570 |
advertisements of the
requirements and procedures for approval | 1571 |
compliance under this section
prior to the use of any | 1572 |
advertisements not furnished by the
viatical settlement | 1573 |
licensee. | 1574 |
(C) All advertisements that are subject to this section
shall | 1575 |
be
truthful and not misleading in fact or by implication.
The form | 1576 |
and content of an advertisement of a viatical settlement
contract | 1577 |
shall be sufficiently complete and clear so as to avoid
deception | 1578 |
and shall not have the capacity or tendency to mislead
or deceive. | 1579 |
The determination of whether an advertisement has the
capacity or | 1580 |
tendency to mislead or deceive shall be made by the
superintendent | 1581 |
of insurance, from the overall impression that the
advertisement | 1582 |
may be reasonably expected to create upon a person
of average | 1583 |
education or intelligence within the segment of the
public to | 1584 |
which it is directed. | 1585 |
(1)
"Guaranteed,"
"fully secured,"
"100 percent secured," | 1591 |
"fully
insured,"
"secure,"
"safe,"
"backed by rated insurance | 1592 |
companies,"
"backed by federal law,"
"backed by state law," or | 1593 |
"state guaranty
funds," or similar representations; | 1594 |
An advertisement shall not omit material information or use | 1617 |
any
words, phrases, statements, references, or illustrations if | 1618 |
the omission
or use has the capacity, tendency, or effect of | 1619 |
misleading or deceiving
viators, as to the nature or extent of any | 1620 |
benefit, loss covered,
premium payable, or state or federal tax | 1621 |
consequence. The fact
that the viatical settlement contract | 1622 |
offered is made available
for inspection prior to consummation of | 1623 |
the sale, that an offer is
made to refund the payment if the | 1624 |
viator is not satisfied, or that
the viatical settlement contract | 1625 |
includes a
"free look" period
that satisfies or exceeds legal | 1626 |
requirements, does not remedy any
misleading statements. | 1627 |
(5) The words
"free,"
"no cost,"
"without cost,"
"no | 1640 |
additional
cost,"
"at no extra cost," or words of similar import | 1641 |
shall not be used
with respect to any policy or to
any benefit or | 1642 |
service unless
true. An advertisement may
specify
the charge for | 1643 |
a benefit or a
service or may state that a
charge
is included in | 1644 |
the payment or
use other appropriate
language. | 1645 |
(b) In using testimonials, appraisals, analyses, or | 1657 |
endorsements,
the viatical settlement licensee makes as its own | 1658 |
all the
statements contained
in the testimonials, appraisals, | 1659 |
analyses,
or endorsements, and
the statements are subject to all | 1660 |
the
provisions of this section. | 1661 |
(c) If the individual making a testimonial, appaisal | 1662 |
appraisal,
analysis,
or endorsement has a
funancialfinancial | 1663 |
interest in the
viatical
settlement
provider or related entity | 1664 |
subject of that testimonial, appraisal, analysis, or endorsement | 1665 |
directly or indirectly as a stockholdershareholder,
director, | 1666 |
officer,
employee, or otherwise, or receives any benefit
directly | 1667 |
or
indirectly other than required union scale wages, that
fact | 1668 |
shall
be prominently disclosed in the advertisement. | 1669 |
(d) An advertisement shall not state or
im-plyimply that a | 1670 |
viatical
settlement contract benefit or service has been approved | 1671 |
or endorsed by a group of individuals, society,
association, or | 1672 |
other organization unless that is the fact and
unless any | 1673 |
relationship between the individualgroup of individuals, society, | 1674 |
association, or
organization and the viatical settlement
provider | 1675 |
is disclosed.
If
the entity making the endorsement or
testimonial | 1676 |
is owned,
controlled, or managed by the viatical
settlement | 1677 |
provider, or
receives any payment or other
consideration from the | 1678 |
viatical
settlement provider for
making an endorsement or | 1679 |
testimonial, that
fact shall be disclosed
in the advertisement. | 1680 |
(H) All advertisements about a viatical
settlement
provider | 1692 |
or
its viatical settlement contract,
products,
or
services | 1693 |
shall
clearly identify the viatical settlement
provider's name. | 1694 |
If any
specific viatical
settlement
contract is
advertised, the | 1695 |
viatical
settlement
contract shall be
identified
either by form | 1696 |
number or
some other
appropriate
description. If
an application | 1697 |
is part of
the
advertisement, the
name of the
viatical | 1698 |
settlement
provider
shall be shown on the
application. | 1699 |
(I) An advertisement shall not use a trade name, group | 1700 |
designation, name of the parent company of a viatical
settlement | 1701 |
licensee, name of a
particular division of the viatical | 1702 |
settlement
licensee, service mark, slogan, symbol, or
other | 1703 |
device
or
reference without disclosing the name of the viatical | 1704 |
settlement
licensee,
if either of the following applies regarding | 1705 |
the
advertisement: | 1706 |
(J) An advertisement shall not use any combination of
words, | 1714 |
symbols, or physical materials that, by their content, | 1715 |
phraseology, shape, color, or other characteristics, are so | 1716 |
similar to a
combination of words, symbols, or physical materials | 1717 |
used by a
government program or agency or otherwise appear to be | 1718 |
of such a
nature that they tend to mislead prospective viators | 1719 |
into
believing that the solicitation is in some manner connected | 1720 |
with a
government program or agency. | 1721 |
(K) An advertisement may state that a viatical
settlement | 1722 |
providerlicensee is licensed in the state in which the | 1723 |
advertisement
appears, provided it does not exaggerate that fact | 1724 |
or suggest or
imply that competing viatical settlement providers | 1725 |
competitors
may not be so
licensed. The advertisement may ask the | 1726 |
audience to
consult the
licensee's web site or contact the | 1727 |
department of insurance to find
out if the state in which the | 1728 |
advertisement appears requires
licensing
and, if it does, whether | 1729 |
the viatical settlement
provider or viatical
settlement broker | 1730 |
person is
licensed. | 1731 |
(M) All advertisements of an actual licensee shall state
the | 1737 |
name
of the actual
licensee. An advertisement
shall not use
a | 1738 |
trade name, any group
designation, name of any
affiliate or | 1739 |
controlling entity of the
licensee, service mark, slogan, symbol, | 1740 |
or other
device
in a manner that would have the capacity or | 1741 |
tendency to
mislead or
deceive as to the true identity of the | 1742 |
actual licensee or create the false impression that an
affiliate | 1743 |
or controlling entity would have any responsibility for
the | 1744 |
financial obligation of the licensee. | 1745 |
(1) Presenting, causing to be presented, or preparing with | 1774 |
knowledge or belief that it will be presented to or by a viatical | 1775 |
settlement provider, viatical settlement broker, life expectancy | 1776 |
provider, viatical
settlement
purchaser, financing entity, | 1777 |
insurer, insurance broker,
insurance
agent, or any other person, | 1778 |
any false material
information, or
concealing any material | 1779 |
information, as part of,
in support of, or
concerning a fact | 1780 |
material to, one or more of
the following: | 1781 |
(4) Recklessly entering into, negotiating, brokering, or | 1823 |
otherwise dealing in a viatical settlement contract involving a | 1824 |
policy that was obtained by presenting false,
deceptive, or | 1825 |
misleading information of any fact material to the
policy, or by | 1826 |
concealing
information concerning any fact material
to the | 1827 |
policy, for the
purpose of misleading and with the intent
to | 1828 |
defraud the issuer
of
the policy, the viatical settlement | 1829 |
provider, or the viator; | 1830 |
(5) Committing any embezzlement, theft, misappropriation, or | 1831 |
conversion of moneys, funds, premiums, credits, or other property | 1832 |
of a
viatical settlement provider, insurer, insured, viator,
| 1833 |
policyowner, or any other person engaged in the business
of | 1834 |
viatical settlements or insurance; | 1835 |
(10) Entering into a premium finance agreement with any | 1850 |
person pursuant to which the person will receive, directly or | 1851 |
indirectly, any proceeds, fees, or other considerations from the
| 1852 |
policy, the owner of the policy, the issuer of the policy, or from | 1853 |
any
other person with respect to the premium finance agreement or | 1854 |
any
viatical settlement contract, or from any transaction related | 1855 |
to
the policy, that are in addition to the amount required
to | 1856 |
pay the principal, interest, costs, and expenses related to the | 1857 |
policy premiums pursuant to the premium finance agreement or | 1858 |
subsequent sale of the agreement. Any payments, charges, fees, or | 1859 |
other amounts in addition to the amounts required to pay the | 1860 |
principal, interest, costs, and expenses related to policy | 1861 |
premiums paid under the premium finance agreement shall be | 1862 |
remitted to the original owner of the policy or, if the owner is | 1863 |
not living at the time of the determination of the overpayment, to | 1864 |
the estate of the owner. | 1865 |
(11) With respect to any viatical settlement contract or
a | 1866 |
policy, for a viatical settlement broker or an agent
registered | 1867 |
under this chapter as operating as a viatical
settlement broker | 1868 |
to knowingly solicit an offer from, effectuate a
viatical | 1869 |
settlement with, or make a sale to any viatical
settlement | 1870 |
provider, viatical settlement purchaser, financing
entity, or | 1871 |
related provider trust that is controlling, controlled
by, or | 1872 |
under common control with such viatical settlement broker
or | 1873 |
registered agent unless both of the following are true: | 1874 |
(12) With respect to any viatical settlement contract or
a | 1881 |
policy, for a viatical settlement provider to knowingly
enter | 1882 |
into a viatical settlement contract with a viator if, in | 1883 |
connection with such viatical settlement contract, anything of | 1884 |
value will be paid to a viatical settlement broker or an agent | 1885 |
registered under this chapter as operating as a viatical | 1886 |
settlement broker that is controlling, controlled by, or under | 1887 |
common control with such viatical settlement provider or the | 1888 |
viatical settlement purchaser, financing entity, or related | 1889 |
provider trust that is involved in such viatical settlement | 1890 |
contract unless both of the following are true: | 1891 |
Sec. 3916.172. Any contract, agreement, arrangement, or | 1908 |
transaction including, but not limited to, any financing | 1909 |
agreement or arrangement identified in section 1321.72 of the | 1910 |
Revised Code entered into for the furtherance or aid of a | 1911 |
stranger-originated life insurance act, practice, arrangement, or | 1912 |
agreement is void and unenforceable. | 1913 |
(3) Any life insurer that has a good faith belief that a | 1950 |
person is participating or has participated in a | 1951 |
stranger-originated life insurance transaction shall report the | 1952 |
person to the superintendent in a form and manner prescribed by | 1953 |
the superintendent. Upon receipt of the insurer's report, the | 1954 |
superintendant shall conduct an investigation to determine whether | 1955 |
there is probable cause, based on the totality of the facts and | 1956 |
circumstances that the person has or had engaged in a | 1957 |
stranger-originated life insurance transaction. If the | 1958 |
superintendent finds probable cause, the superintendent shall do | 1959 |
one of the following: | 1960 |
(a) If the person is licensed or regulated by the department | 1961 |
of insurance, the superintendent shall provide the person an | 1962 |
opportunity for notice and hearing pursuant to Chapter 119. of the | 1963 |
Revised Code. If the person waives or does not request a hearing | 1964 |
pursuant to Chapter 119. of the Revised Code, or a hearing is held | 1965 |
and the person is found to have participated in one or more | 1966 |
stranger-originated life insurance transactions, the | 1967 |
superintendent shall publish the order on the department's web | 1968 |
site, and shall notify each insurance company licensed in this | 1969 |
state that the person has been adjudicated as having participated | 1970 |
in one or more stranger-originated life insurance transactions. | 1971 |
(d) The NAIC, national association of securities dealers | 1990 |
(NASD)financial industry regulatory authority (FINRA),
the north | 1991 |
americanAmerican securities
amdiministratorsadministrators | 1992 |
association
(NASAA),
any employee, agent, or
representative of | 1993 |
any of those
associations., or other regulatory
body overseeing | 1994 |
life insurance,
viatical settlements, securities,
or
investment | 1995 |
fraud; | 1996 |
(2) The immunity provided in division (D)(1) of this section | 1999 |
shall not apply to any statement made with actual malice. In an | 2000 |
action brought against a person for filing a report or
furnishing | 2001 |
other information concerning a fraudulent viatical
settlement act | 2002 |
or a fraudulent insurance act, the party bringing
the action shall | 2003 |
plead specifically any allegation that the
immunity provided in | 2004 |
division (D)(1) of this section does not
apply because the person | 2005 |
filing the report or furnishing the information
did so with actual | 2006 |
malice. | 2007 |
(3) If a person is the prevailing party in a civil action | 2008 |
for
libel, slander, or any other relevant tort arising out of | 2009 |
activities in
carrying out the provisions of this chapter, if the | 2010 |
prevailing party is
a person identified in division (D)(1) of this | 2011 |
section and the
immunity described in that division applies to the | 2012 |
person, and if the party who brought the action was not | 2013 |
substantially
justified in doing so, the person who is the | 2014 |
prevailing party is
entitled to an award of attorney's fees and | 2015 |
costs arising out of
the action. However, the person is not | 2016 |
entitled to an award of attorney's fees if the person provided | 2017 |
information about the person's own fraudulent viatical settlement | 2018 |
acts. For purposes of this division,
an action is
"substantially | 2019 |
justified" if it had a reasonable
basis in law or fact at the time | 2020 |
that
it was initiated. | 2021 |
(G)(1) Viatical settlement providers and
viatical settlement | 2063 |
brokers shall adopt and have in place
antifraud initiatives | 2064 |
reasonably calculated to detect, prosecute,
and prevent | 2065 |
fraudulent
viatical settlement acts. At the discretion
of the | 2066 |
superintendent, the superintendent may order, or a licensee | 2067 |
viatical settlement provider or viatical
settlement broker may | 2068 |
request and the
superintendent may grant,
any modifications of | 2069 |
the
following
required initiatives described
in divisions | 2070 |
(G)(1)(a)
and (b) of
this section that are necessary
to ensure | 2071 |
an effective
antifraud
program. The modifications may
be more or | 2072 |
less
restrictive than
the
required initiatives so long
as the | 2073 |
modifications may
reasonably be expected to
accomplish the | 2074 |
purpose
of this section.
Antifraud initiatives
under this | 2075 |
division shall
include all of the
following: | 2076 |
(2) The superintendent, by rule adopted in accordance with | 2099 |
Chapter 119. of the Revised Code, may require that antifraud plans | 2100 |
required
under division (G)(1) of this section be submitted to the | 2101 |
superintendent. If the superintendent requires that antifraud | 2102 |
plans be submitted to the superintendent, the plans so submitted | 2103 |
are privileged and confidential, are not a public record
open for | 2104 |
inspection under section 149.43 of the
revised codeRevised Code, | 2105 |
and
are not
subject to discovery or subpoena in a civil or | 2106 |
criminal
action. | 2107 |
(H) No insurer that issued a policy being viaticated shall be | 2108 |
responsible, under this chapter, for any act or omission of a | 2109 |
viatical settlement broker or viatical
settlement provider | 2110 |
arising out of or in
connection with the
viatical settlement | 2111 |
transaction unless the
insurer receives
compensation for the | 2112 |
placement of a viatical
settlement contract
from the viatical | 2113 |
settlement provider or viatical settlement broker
in connection | 2114 |
with the viatical
settlement contract. | 2115 |
Sec. 3916.19. (A) In addition to the penalties and other | 2116 |
enforcement provisions contained in this chapter, if any person | 2117 |
violates any provision of this chapter or any rule or regulation | 2118 |
implementing any provision of this chapter, the superintendent of | 2119 |
insurance may seek an injunction in a court of competent | 2120 |
jurisdiction and may apply for any temporary or permanent order | 2121 |
that the superintendent determines is necessary to restrain the | 2122 |
person from committing the violation. | 2123 |
(C) In addition to the penalties and other enforcement | 2131 |
provisions
contained in this chapter, any person who violates any | 2132 |
provision
of this chapter is subject to a civil penalty of up to | 2133 |
ten
thousand
dollars per violation. Imposition of civil penalties | 2134 |
described in
this division shall be pursuant to an order of the | 2135 |
superintendent
issued under Chapter 119. of the Revised Code. The | 2136 |
superintendent's order may require a person found to be in | 2137 |
violation of this chapter to make restitution to persons aggrieved | 2138 |
by
violations of this chapter. | 2139 |
(B) Establish standards for evaluating the reasonableness of | 2154 |
payments
under
viatical settlement contracts for persons with a | 2155 |
terminal or chronic illness
or conditionwho are terminally or | 2156 |
chronically ill. This authority
includes,
but is not limited
to, | 2157 |
the regulation of discount rates
used to
determine the amount | 2158 |
paid in exchange
for the assignment, release,
transfer, sale, | 2159 |
devise, or bequest of a benefit under a
life
insurance policy or | 2160 |
certificateinsuring persons who are terminally or chronically | 2161 |
ill. | 2162 |
Section 2. That existing sections 1321.72, 1321.78, 3916.01, | 2174 |
3916.02, 3916.03,
3916.05, 3916.06, 3916.07, 3916.09,
3916.10, | 2175 |
3916.11,
3916.12, 3916.13, 3916.14, 3916.15, 3916.16,
3916.17, | 2176 |
3916.18,
3916.19, 3916.20, and 3916.99 of the Revised
Code are | 2177 |
hereby
repealed. | 2178 |