130th Ohio General Assembly
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As Reported by House Civil and Commercial Law Committee

123rd General Assembly
Regular Session
1999-2000
Sub. H. B. No. 551

REPRESENTATIVE SALERNO-PETERSON-CALLENDER-WOMER BENJAMIN


A BILL
To amend sections 1707.01, 1707.02, 1707.11, 1707.15, 1707.151, 1707.16, 1707.17, and 1707.23; to enact sections 3916.01, 3916.02, 3916.03, 3916.05, 3916.07, 3916.08, 3916.10, 3916.12, 3916.13, 3916.15, 3916.17, 3916.19, 3916.21, 3916.22, 3916.24, 3916.26, 3916.28, 3916.30, 3916.32, and 3916.99; and to repeal sections 1707.432, 1707.433, 1707.434, 1707.435, 1707.436, 1707.437, 1707.438, and 1707.439 of the Revised Code to adopt the Viatical Settlements Model Act of the National Association of Insurance Commissioners, to make life settlement interests subject to the Ohio Securities Law, and to make other changes in the Securities Law, including changes relative to exempt securities, consent to service of process, application for a dealer's, investment adviser's, or salesperson's license, and private civil actions seeking damages arising from the sale of a security.

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


Section 1. That sections 1707.01, 1707.02, 1707.11, 1707.15, 1707.151, 1707.16, 1707.17, and 1707.23 be amended and sections 3916.01, 3916.02, 3916.03, 3916.05, 3916.07, 3916.08, 3916.10, 3916.12, 3916.13, 3916.15, 3916.17, 3916.19, 3916.21, 3916.22, 3916.24, 3916.26, 3916.28, 3916.30, 3916.32, and 3916.99 of the Revised Code be enacted to read as follows:

Sec. 1707.01. As used in this chapter:

(A) Whenever the context requires it, "division" or "division of securities" may be read as "director of commerce" or as "commissioner of securities."

(B) "Security" means any certificate or instrument that represents title to or interest in, or is secured by any lien or charge upon, the capital, assets, profits, property, or credit of any person or of any public or governmental body, subdivision, or agency. It includes shares of stock, certificates for shares of stock, membership interests in limited liability companies, voting-trust certificates, warrants and options to purchase securities, subscription rights, interim receipts, interim certificates, promissory notes, all forms of commercial paper, evidences of indebtedness, bonds, debentures, land trust certificates, fee certificates, leasehold certificates, syndicate certificates, endowment certificates, certificates or written instruments in or under profit-sharing or participation agreements or in or under oil, gas, or mining leases, or certificates or written instruments of any interest in or under the same, receipts evidencing preorganization or reorganization subscriptions, preorganization certificates, reorganization certificates, certificates evidencing an interest in any trust or pretended trust, any investment contract, ANY LIFE SETTLEMENT INTEREST, any instrument evidencing a promise or an agreement to pay money, warehouse receipts for intoxicating liquor, and the currency of any government other than those of the United States and Canada, but sections 1707.01 to 1707.45 of the Revised Code do not apply to the sale of real estate.

(C)(1) "Sale" has the full meaning of "sale" as applied by or accepted in courts of law or equity, and includes every disposition, or attempt to dispose, of a security or of an interest in a security. "Sale" also includes a contract to sell, an exchange, an attempt to sell, an option of sale, a solicitation of a sale, a solicitation of an offer to buy, a subscription, or an offer to sell, directly or indirectly, by agent, circular, pamphlet, advertisement, or otherwise.

(2) "Sell" means any act by which a sale is made.

(3) The use of advertisements, circulars, or pamphlets in connection with the sale of securities in this state exclusively to the purchasers specified in division (D) of section 1707.03 of the Revised Code is not a sale when the advertisements, circulars, and pamphlets describing and offering those securities bear a readily legible legend in substance as follows: "This offer is made on behalf of dealers licensed under sections 1707.01 to 1707.45 of the Revised Code, and is confined in this state exclusively to institutional investors and licensed dealers."

(4) The offering of securities by any person in conjunction with a licensed dealer by use of advertisement, circular, or pamphlet is not a sale if that person does not otherwise attempt to sell securities in this state.

(5) Any security given with, or as a bonus on account of, any purchase of securities is conclusively presumed to constitute a part of the subject of that purchase and has been "sold."

(6) "Sale" by an owner, pledgee, or mortgagee, or by a person acting in a representative capacity, includes sale on behalf of such party by an agent, including a licensed dealer or salesperson.

(D) "Person," except as otherwise provided in this chapter, means a natural person, firm, partnership, limited partnership, partnership association, syndicate, joint-stock company, unincorporated association, trust or trustee except where the trust was created or the trustee designated by law or judicial authority or by a will, and a corporation or limited liability company organized under the laws of any state, any foreign government, or any political subdivision of a state or foreign government.

(E)(1) "Dealer," except as otherwise provided in this chapter, means every person, other than a salesperson, who engages or professes to engage, in this state, for either all or part of the person's time, directly or indirectly, either in the business of the sale of securities for the person's own account, or in the business of the purchase or sale of securities for the account of others in the reasonable expectation of receiving a commission, fee, or other remuneration as a result of engaging in the purchase and sale of securities. "Dealer" does not mean any of the following:

(a) Any issuer, including any officer, director, employee, or trustee of, or member or manager of, or partner in, or any general partner of, any issuer, that sells, offers for sale, or does any act in furtherance of the sale of a security that represents an economic interest in that issuer, provided no commission, fee, or other similar remuneration is paid to or received by the issuer for the sale;

(b) Any licensed attorney, public accountant, or firm of such attorneys or accountants, whose activities are incidental to the practice of the attorney's, accountant's, or firm's profession;

(c) Any person that, for the account of others, engages in the purchase or sale of securities that are issued and outstanding before such purchase and sale, if a majority or more of the equity interest of an issuer is sold in that transaction, and if, in the case of a corporation, the securities sold in that transaction represent a majority or more of the voting power of the corporation in the election of directors;

(d) Any person that brings an issuer together with a potential investor and whose compensation is not directly or indirectly based on the sale of any securities by the issuer to the investor;

(e) Any bank, savings and loan association, savings bank, or credit union chartered under the laws of the United States or any state of the United States, provided that all transactions are consummated by or through a person licensed pursuant to section 1707.14 of the Revised Code;

(f) Any person that the division of securities by rule exempts from the definition of "dealer" under division (E)(1) of this section.

(2) "Licensed dealer" means a dealer licensed under this chapter.

(F)(1) "Salesman" or "salesperson" means every natural person, other than a dealer, who is employed, authorized, or appointed by a dealer to sell securities within this state.

(2) The general partners of a partnership, and the executive officers of a corporation or unincorporated association, licensed as a dealer are not salespersons within the meaning of this definition, nor are such clerical or other employees of an issuer or dealer as are employed for work to which the sale of securities is secondary and incidental; but the division of securities may require a license from any such partner, executive officer, or employee if it determines that protection of the public necessitates the licensing.

(3) "Licensed salesperson" means a salesperson licensed under this chapter.

(G) "Issuer" means every person who has issued, proposes to issue, or issues any security.

(H) "Director" means each director or trustee of a corporation, each trustee of a trust, each general partner of a partnership, except a partnership association, each manager of a partnership association, and any person vested with managerial or directory power over an issuer not having a board of directors or trustees.

(I) "Incorporator" means any incorporator of a corporation and any organizer of, or any person participating, other than in a representative or professional capacity, in the organization of an unincorporated issuer.

(J) "Fraud," "fraudulent," "fraudulent acts," "fraudulent practices," or "fraudulent transactions" means anything recognized on or after July 22, 1929, as such in courts of law or equity; any device, scheme, or artifice to defraud or to obtain money or property by means of any false pretense, representation, or promise; any fictitious or pretended purchase or sale of securities; and any act, practice, transaction, or course of business relating to the purchase or sale of securities that is fraudulent or that has operated or would operate as a fraud upon the seller or purchaser.

(K) Except as otherwise specifically provided, whenever any classification or computation is based upon "par value," as applied to securities without par value, the average of the aggregate consideration received or to be received by the issuer for each class of those securities shall be used as the basis for that classification or computation.

(L)(1) "Intangible property" means patents, copyrights, secret processes, formulas, services, good will, promotion and organization fees and expenses, trademarks, trade brands, trade names, licenses, franchises, any other assets treated as intangible according to generally accepted accounting principles, and securities, accounts receivable, or contract rights having no readily determinable value.

(2) "Tangible property" means all property other than intangible property and includes securities, accounts receivable, and contract rights, when the securities, accounts receivable, or contract rights have a readily determinable value.

(M) "Public utilities" means those utilities defined in sections 4905.02, 4905.03, 4907.02, and 4907.03 of the Revised Code; in the case of a foreign corporation, it means those utilities defined as public utilities by the laws of its domicile; and in the case of any other foreign issuer, it means those utilities defined as public utilities by the laws of the situs of its principal place of business. The term always includes railroads whether or not they are so defined as public utilities.

(N) "State" means any state of the United States, any territory or possession of the United States, the District of Columbia, and any province of Canada.

(O) "Bank" means any bank, trust company, savings and loan association, savings bank, or credit union that is incorporated or organized under the laws of the United States, any state of the United States, Canada, or any province of Canada and that is subject to regulation or supervision by that country, state, or province.

(P) "Include," when used in a definition, does not exclude other things or persons otherwise within the meaning of the term defined.

(Q)(1) "Registration by description" means that the requirements of section 1707.08 of the Revised Code have been complied with.

(2) "Registration by qualification" means that the requirements of sections 1707.09 and 1707.11 of the Revised Code have been complied with.

(3) "Registration by coordination" means that there has been compliance with section 1707.091 of the Revised Code. Reference in this chapter to registration by qualification also shall be deemed to include registration by coordination unless the context otherwise indicates.

(R) "Intoxicating liquor" includes all liquids and compounds that contain more than three and two-tenths per cent of alcohol by weight and are fit for use for beverage purposes.

(S) "Institutional investor" means any corporation, bank, insurance company, pension fund or pension fund trust, employees' profit-sharing fund or employees' profit-sharing trust, any association engaged, as a substantial part of its business or operations, in purchasing or holding securities, or any trust in respect of which a bank is trustee or cotrustee. "Institutional investor" does not include any business entity formed for the primary purpose of evading sections 1707.01 to 1707.45 of the Revised Code.

(T) "Securities Act of 1933," 48 Stat. 74, 15 U.S.C. 77a, "Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 78a, "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C. 1, "Investment Advisers Act of 1940," 54 Stat. 847, 15 U.S.C. 80b, and "Investment Company Act of 1940," 54 Stat. 789, 15 U.S.C. 80a mean the federal statutes of those names as amended before or after March 18, 1999.

(U) "Securities and exchange commission" means the securities and exchange commission established by the Securities Exchange Act of 1934.

(V)(1) "Control bid" means the purchase of or offer to purchase any equity security of a subject company from a resident of this state if either of the following applies:

(a) After the purchase of that security, the offeror would be directly or indirectly the beneficial owner of more than ten per cent of any class of the issued and outstanding equity securities of the issuer.

(b) The offeror is the subject company, there is a pending control bid by a person other than the issuer, and the number of the issued and outstanding shares of the subject company would be reduced by more than ten per cent.

(2) For purposes of division (V)(1) of this section, "control bid" does not include any of the following:

(a) A bid made by a dealer for the dealer's own account in the ordinary course of business of buying and selling securities;

(b) An offer to acquire any equity security solely in exchange for any other security, or the acquisition of any equity security pursuant to an offer, for the sole account of the offeror, in good faith and not for the purpose of avoiding the provisions of this chapter, and not involving any public offering of the other security within the meaning of Section 4 of Title I of the "Securities Act of 1933," 48 Stat. 77, 15 U.S.C.A. 77d(2), as amended;

(c) Any other offer to acquire any equity security, or the acquisition of any equity security pursuant to an offer, for the sole account of the offeror, from not more than fifty persons, in good faith and not for the purpose of avoiding the provisions of this chapter.

(W) "Offeror" means a person who makes, or in any way participates or aids in making, a control bid and includes persons acting jointly or in concert, or who intend to exercise jointly or in concert any voting rights attached to the securities for which the control bid is made and also includes any subject company making a control bid for its own securities.

(X)(1) "Investment adviser" means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as a part of regular business, issues or promulgates analyses or reports concerning securities.

(2) "Investment adviser" does not mean any of the following:

(a) Any attorney, accountant, engineer, or teacher, whose performance of investment advisory services described in division (X)(1) of this section is solely incidental to the practice of the attorney's, accountant's, engineer's, or teacher's profession;

(b) A publisher of any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation;

(c) A person who acts solely as an investment adviser representative;

(d) A bank holding company, as defined in the "Bank Holding Company Act of 1956," 70 Stat. 133, 12 U.S.C. 1841, that is not an investment company;

(e) A bank, or any receiver, conservator, or other liquidating agent of a bank;

(f) Any licensed dealer or licensed salesperson whose performance of investment advisory services described in division (X)(1) of this section is solely incidental to the conduct of the dealer's or salesperson's business as a licensed dealer or licensed salesperson and who receives no special compensation for the services;

(g) Any person, the advice, analyses, or reports of which do not relate to securities other than securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States, or securities issued or guaranteed by corporations in which the United States has a direct or indirect interest, and that have been designated by the secretary of the treasury as exempt securities as defined in the "Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 78c;

(h) Any person that is excluded from the definition of investment adviser pursuant to section 202(a)(11)(A) to (E) of the "Investment Advisers Act of 1940," 15 U.S.C. 80b-2(a)(11), or that has received an order from the securities and exchange commission under section 202(a)(11)(F) of the "Investment Advisers Act of 1940," 15 U.S.C. 80b-2(a)(11)(F), declaring that the person is not within the intent of section 202(a)(11) of the Investment Advisers Act of 1940.

(i) Any other person that the division designates by rule, if the division finds that the designation is necessary or appropriate in the public interest or for the protection of investors or clients and consistent with the purposes fairly intended by the policy and provisions of this chapter.

(Y)(1) "Subject company" means an issuer that satisfies both of the following:

(a) Its principal place of business or its principal executive office is located in this state, or it owns or controls assets located within this state that have a fair market value of at least one million dollars.

(b) More than ten per cent of its beneficial or record equity security holders are resident in this state, more than ten per cent of its equity securities are owned beneficially or of record by residents in this state, or more than one thousand of its beneficial or record equity security holders are resident in this state.

(2) The division of securities may adopt rules to establish more specific application of the provisions set forth in division (Y)(1) of this section. Notwithstanding the provisions set forth in division (Y)(1) of this section and any rules adopted under this division, the division, by rule or in an adjudicatory proceeding, may make a determination that an issuer does not constitute a "subject company" under division (Y)(1) of this section if appropriate review of control bids involving the issuer is to be made by any regulatory authority of another jurisdiction.

(Z) "Beneficial owner" includes any person who directly or indirectly through any contract, arrangement, understanding, or relationship has or shares, or otherwise has or shares, the power to vote or direct the voting of a security or the power to dispose of, or direct the disposition of, the security. "Beneficial ownership" includes the right, exercisable within sixty days, to acquire any security through the exercise of any option, warrant, or right, the conversion of any convertible security, or otherwise. Any security subject to any such option, warrant, right, or conversion privilege held by any person shall be deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by that person, but shall not be deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person. A person shall be deemed the beneficial owner of any security beneficially owned by any relative or spouse or relative of the spouse residing in the home of that person, any trust or estate in which that person owns ten per cent or more of the total beneficial interest or serves as trustee or executor, any corporation or entity in which that person owns ten per cent or more of the equity, and any affiliate or associate of that person.

(AA) "Offeree" means the beneficial or record owner of any security that an offeror acquires or offers to acquire in connection with a control bid.

(BB) "Equity security" means any share or similar security, or any security convertible into any such security, or carrying any warrant or right to subscribe to or purchase any such security, or any such warrant or right, or any other security that, for the protection of security holders, is treated as an equity security pursuant to rules of the division of securities.

(CC) "Investment company" has the same meaning as in section 3(A) of the "Investment Company Act of 1940," 54 Stat. 789, 15 U.S.C. 80a-1 to 80a-52.

(DD) "Penny stock" has the same meaning as in section 3(A)(51) of the "Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 78a-78jj, and the rules, regulations, and orders issued pursuant to that section.

(EE) "Going concern transaction" has the same meaning given that term under the rules or regulations on the securities and exchange commission issued pursuant to section 13(c) of the "Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 78a-78jj.

(FF) "Person acting on behalf of an issuer" means an officer, director, or employee of an issuer.

(GG) "Blank check company," "roll-up transaction," "executive officer of an entity," and "direct participation program" have the same meanings given those terms by rule or regulation of the securities and exchange commission.

(HH) "Forward-looking statement" means any of the following:

(1) A statement containing a projection of revenues, income including income loss, earnings per share including earnings loss per share, capital expenditures, dividends, capital structure, or other financial items;

(2) A statement of the plans and objectives of the management of the issuer for future operations, including plans or objectives relating to the products or services of the issuer;

(3) A statement of future economic performance, including any statement of that nature contained in a discussion and analysis of financial conditions by the management or in the results of operations included pursuant to the rules and regulations of the securities and exchange commission;

(4) Any disclosed statement of the assumptions underlying or relating to a statement described in division (B)(1), (2), or (3) of section 1707.437 of the Revised Code;

(5) Any report issued by an outside reviewer retained by an issuer to the extent that the report relates to a forward-looking statement made by the issuer;

(6) A statement containing a projection or estimate of any other items that may be specified by rule or regulation of the securities and exchange commission.

(II)(1) "Investment adviser representative" means a supervised person of an investment adviser, provided that the supervised person has more than five clients who are natural persons other than excepted persons defined in division (KK) of this section, and that more than ten per cent of the supervised person's clients are natural persons other than excepted persons defined in division (KK) of this section. "Investment adviser representative" does not mean any of the following:

(a) A supervised person that does not on a regular basis solicit, meet with, or otherwise communicate with clients of the investment adviser;

(b) A supervised person that provides only investment advisory services described in division (X)(1) of this section by means of written materials or oral statements that do not purport to meet the objectives or needs of specific individuals or accounts;

(c) Any other person that the division designates by rule, if the division finds that the designation is necessary or appropriate in the public interest or for the protection of investors or clients and is consistent with the provisions fairly intended by the policy and provisions of this chapter.

(2) For the purpose of the calculation of clients in division (II)(1) of this section, a natural person and the following persons are deemed a single client: Any minor child of the natural person; any relative, spouse, or relative of the spouse of the natural person who has the same principal residence as the natural person; all accounts of which the natural person or the persons referred to in division (II)(2) of this section are the only primary beneficiaries; and all trusts of which the natural person or persons referred to in division (II)(2) of this section are the only primary beneficiaries. Persons who are not residents of the United States need not be included in the calculation of clients under division (II)(1) of this section.

(3) If subsequent to March 18, 1999, amendments are enacted or adopted defining "investment adviser representative" for purposes of the Investment Advisers Act of 1940 or additional rules or regulations are promulgated by the securities and exchange commission regarding the definition of "investment adviser representative" for purposes of the Investment Advisers Act of 1940, the division of securities shall, by rule, adopt the substance of the amendments, rules, or regulations, unless the division finds that the amendments, rules, or regulations are not necessary for the protection of investors or in the public interest.

(JJ) "Supervised person" means a natural person who is any of the following:

(1) A partner, officer, or director of an investment adviser, or other person occupying a similar status or performing similar functions with respect to an investment adviser;

(2) An employee of an investment adviser;

(3) A person who provides investment advisory services described in division (X)(1) of this section on behalf of the investment adviser and is subject to the supervision and control of the investment adviser.

(KK) "Excepted person" means a natural person to whom any of the following applies:

(1) Immediately after entering into the investment advisory contract with the investment adviser, the person has at least seven hundred fifty thousand dollars under the management of the investment adviser.

(2) The investment adviser reasonably believes either of the following at the time the investment advisory contract is entered into with the person:

(a) The person has a net worth, together with assets held jointly with a spouse, of more than one million five hundred thousand dollars.

(b) The person is a qualified purchaser as defined in division (LL) of this section.

(3) Immediately prior to entering into an investment advisory contract with the investment adviser, the person is either of the following:

(a) An executive officer, director, trustee, general partner, or person serving in a similar capacity, of the investment adviser;

(b) An employee of the investment adviser, other than an employee performing solely clerical, secretarial, or administrative functions or duties for the investment adviser, which employee, in connection with the employee's regular functions or duties, participates in the investment activities of the investment adviser, provided that, for at least twelve months, the employee has been performing such nonclerical, nonsecretarial, or nonadministrative functions or duties for or on behalf of the investment adviser or performing substantially similar functions or duties for or on behalf of another company.

If subsequent to March 18, 1999, amendments are enacted or adopted defining "excepted person" for purposes of the Investment Advisers Act of 1940 or additional rules or regulations are promulgated by the securities and exchange commission regarding the definition of "excepted person" for purposes of the Investment Advisers Act of 1940, the division of securities shall, by rule, adopt the substance of the amendments, rules, or regulations, unless the division finds that the amendments, rules, or regulations are not necessary for the protection of investors or in the public interest.

(LL)(1) "Qualified purchaser" means either of the following:

(a) A natural person who owns not less than five million dollars in investments as defined by rule by the division of securities;

(b) A natural person, acting for the person's own account or accounts of other qualified purchasers, who in the aggregate owns and invests on a discretionary basis, not less than twenty-five million dollars in investments as defined by rule by the division of securities.

(2) If subsequent to March 18, 1999, amendments are enacted or adopted defining "qualified purchaser" for purposes of the Investment Advisers Act of 1940 or additional rules or regulations are promulgated by the securities and exchange commission regarding the definition of "qualified purchaser" for purposes of the Investment Advisers Act of 1940, the division of securities shall, by rule, adopt the amendments, rules, or regulations, unless the division finds that the amendments, rules, or regulations are not necessary for the protection of investors or in the public interest.

(MM)(1) "Purchase" has the full meaning of "purchase" as applied by or accepted in courts of law or equity and includes every acquisition of, or attempt to acquire, a security or an interest in a security. "Purchase" also includes a contract to purchase, an exchange, an attempt to purchase, an option to purchase, a solicitation of a purchase, a solicitation of an offer to sell, a subscription, or an offer to purchase, directly or indirectly, by agent, circular, pamphlet, advertisement, or otherwise.

(2) "Purchase" means any act by which a purchase is made.

(3) Any security given with, or as a bonus on account of, any purchase of securities is conclusively presumed to constitute a part of the subject of that purchase.

(NN) "LIFE SETTLEMENT INTEREST" MEANS THE ENTIRE INTEREST OR ANY FRACTIONAL INTEREST IN AN INSURANCE POLICY OR CERTIFICATE OF INSURANCE, OR IN AN INSURANCE BENEFIT UNDER SUCH A POLICY OR CERTIFICATE, THAT IS THE SUBJECT OF A LIFE SETTLEMENT CONTRACT.

FOR PURPOSES OF THIS DIVISION, "LIFE SETTLEMENT CONTRACT" MEANS AN AGREEMENT FOR THE PURCHASE, SALE, ASSIGNMENT, TRANSFER, DEVISE, OR BEQUEST OF ANY PORTION OF THE DEATH BENEFIT OR OWNERSHIP OF ANY LIFE INSURANCE POLICY OR CONTRACT, IN RETURN FOR CONSIDERATION OR ANY OTHER THING OF VALUE THAT IS LESS THAN THE EXPECTED DEATH BENEFIT OF THE LIFE INSURANCE POLICY OR CONTRACT. "LIFE SETTLEMENT CONTRACT" INCLUDES A VIATICAL SETTLEMENT CONTRACT AS DEFINED IN SECTION 3916.01 OF THE REVISED CODE, BUT DOES NOT INCLUDE ANY OF THE FOLLOWING:

(1) A LOAN BY AN INSURER UNDER THE TERMS OF A LIFE INSURANCE POLICY, INCLUDING, BUT NOT LIMITED TO, A LOAN SECURED BY THE CASH VALUE OF THE POLICY;

(2) AN AGREEMENT WITH A BANK THAT TAKES AN ASSIGNMENT OF A LIFE INSURANCE POLICY AS COLLATERAL FOR A LOAN;

(3) THE PROVISION OF ACCELERATED BENEFITS AS DEFINED IN SECTION 3915.21 OF THE REVISED CODE;

(4) ANY AGREEMENT BETWEEN AN INSURER AND A REINSURER;

(5) AN AGREEMENT BY AN INDIVIDUAL TO PURCHASE AN EXISTING LIFE INSURANCE POLICY OR CONTRACT FROM THE ORIGINAL OWNER OF THE POLICY OR CONTRACT, IF THE INDIVIDUAL DOES NOT ENTER INTO MORE THAN ONE LIFE SETTLEMENT CONTRACT PER CALENDAR YEAR;

(6) THE INITIAL PURCHASE OF AN INSURANCE POLICY OR CERTIFICATE OF INSURANCE FROM ITS OWNER BY A VIATICAL SETTLEMENT PROVIDER, AS DEFINED IN SECTION 3916.01 OF THE REVISED CODE, THAT IS LICENSED UNDER CHAPTER 3916. OF THE REVISED CODE.

Sec. 1707.02. (A) "Exempt," as used in this section, means exempt from sections 1707.08 to 1707.11 and 1707.39 of the Revised Code.

(B)(1) Except as provided in division (B)(2) of this section, the following securities are exempt, if the issuer or guarantor has the power of taxation or assessment for the purpose of paying the obligation represented by the security, or is in specific terms empowered by the laws of the state of issuance to issue securities payable as to principal or interest, or as to both, out of revenues collected or administered by such issuer:

(a) Any security issued or guaranteed by the United States;

(b) Any security issued or guaranteed by, and recognized, at the time of sale, as its valid obligation by, any foreign government with which the United States is, at the time of sale, maintaining diplomatic relations;

(c) Any security issued or guaranteed, and recognized as its valid obligation, by any political subdivision or any governmental or other public body, corporation, or agency in or of the United States, any state, territory, or possession of the United States, or any foreign government with which the United States is, at the time of sale, maintaining diplomatic relations.

(2) If a security described in division (B)(1) of this section is not payable out of the proceeds of a general tax, the security is exempt only if, at the time of its first sale in this state, there is no default in the payment of any of the interest or principal of the security, and there are no adjudications or pending suits adversely affecting its validity.

(C) Any security issued by and representing an interest in or an obligation of a state or nationally chartered bank, savings and loan association, savings bank, or credit union, or a governmental corporation or agency created by or under the laws of the United States or of Canada is exempt, if it is under the supervision of or subject to regulation by the government or state under whose laws it was organized.

(D) Any interim certificate is exempt, if the securities to be delivered therefor are themselves exempt, are the subject matter of an exempt transaction, have been registered by description or registered by qualification, or are the subject matter of a transaction which has been registered by description.

(E)(1) Any A security, whether a preliminary or final security, is exempt, which, at the time of sale within this state, is listed, or listed upon notice of issuance, on the Cincinnati stock exchange, the Midwest stock exchange, the New York stock exchange, or the American stock exchange, or is designated, or approved for designation upon notice of issuance, as a national market system security on the national association of securities dealers automated quotation system, or is listed or designated on any other stock exchange or national quotation system approved by the division as having listing requirements substantially equivalent to those of any one of those exchanges or systems, and any security senior to any security so listed or designated is also exempt; but these exemptions shall apply only so long as such security remains so listed or designated pursuant to official action of such exchange or system and not under suspension, and only so long as such exchange or system remains approved under this section IF IT MEETS ANY OF THE FOLLOWING REQUIREMENTS:

(a) THE SECURITY IS LISTED, OR AUTHORIZED FOR LISTING, ON THE NEW YORK STOCK EXCHANGE, THE AMERICAN STOCK EXCHANGE, OR THE NATIONAL MARKET SYSTEM OF THE NASDAQ STOCK MARKET, OR ANY SUCCESSOR TO SUCH ENTITIES.

(b) THE SECURITY IS LISTED, OR AUTHORIZED FOR LISTING, ON A NATIONAL SECURITIES EXCHANGE OR SYSTEM, OR ON A TIER OR SEGMENT OF SUCH EXCHANGE OR SYSTEM, DESIGNATED BY THE SECURITIES AND EXCHANGE COMMISSION IN RULE 146(b) PROMULGATED UNDER SECTION 18(b)(1) OF THE SECURITIES ACT OF 1933.

(c) THE SECURITY IS LISTED, OR AUTHORIZED FOR LISTING, ON A NATIONAL SECURITIES EXCHANGE OR SYSTEM, OR ON A TIER OR SEGMENT OF SUCH EXCHANGE OR SYSTEM, THAT HAS LISTING STANDARDS THAT THE DIVISION OF SECURITIES, ON ITS OWN INITIATIVE OR ON THE BASIS OF AN APPLICATION, DETERMINES BY RULE ARE SUBSTANTIALLY SIMILAR TO THE LISTING STANDARDS APPLICABLE TO SECURITIES DESCRIBED IN DIVISION (E)(1)(a) OF THIS SECTION.

(d) THE SECURITY IS A SECURITY OF THE SAME ISSUER THAT IS EQUAL IN SENIORITY OR THAT IS A SENIOR SECURITY TO A SECURITY DESCRIBED IN DIVISION (E)(1)(a), (b), OR (c) OF THIS SECTION.

(2) Application for approval of a stock exchange or system not approved in this section may be made by any organized stock exchange or system, or by any dealer who is a member of such exchange, in such manner and upon such forms as are prescribed by the division, accompanied by payment of an approval fee of two hundred dollars, and the division shall make such investigation and may hold such hearings as it deems necessary to determine the propriety of giving approval. The cost of such investigation shall be borne by the applicant. The division may enter an order of approval, and if it does so, it shall notify the applicant of such approval.

(3) The division may revoke the approval of an exchange or system approved ENUMERATED in DIVISION (E)(1) OF this section or approved by it upon finding, PROVIDED THAT THE EXCHANGE OR SYSTEM IS NOT LISTED IN SECTION 18(b)(1) OF THE SECURITIES ACT OF 1933 OR ANY RULE PROMULGATED THEREUNDER. THE DIVISION MAY EFFECT A REVOCATION after due notice, investigation, and A hearing, AND A FINDING that the practices or requirements of such exchange or system have been so changed or modified, or are, in their actual operation, such that the contemplated protection is no longer afforded. The principles of res adjudicata ordinarily applicable in civil matters shall not be applicable to this matter, which is hereby declared to be administrative rather than judicial. Notice of the hearing may ye given by certified mail at least ten days before such hearing.

(4) The division may suspend the exemption of any security described in division (E)(1) of this section, PROVIDED THAT THE SECURITY IS LISTED OR AUTHORIZED FOR LISTING ON AN EXCHANGE OR SYSTEM THAT IS NOT LISTED IN SECTION 18(b)(1) OF THE SECURITIES ACT OF 1933 OR ANY RULE PROMULGATED THEREUNDER. THE DIVISION MAY EFFECT A SUSPENSION by giving notice, by certified mail, to that effect to the exchange or system upon which such security is listed or designated and to the issuer of such security. After notice and hearing, the division may revoke such exemption if it appears to it that sales of such security have been fraudulent or that future sales of it would be fraudulent. The division shall set such hearing not later than ten days from the date of the order of suspension, but may for good cause continue such hearing upon application of the exchange or system upon which such security is listed or designated or upon application of the issuer of such security.

(F) Any security, issued or guaranteed as to principal, interest, or dividend or distribution by a corporation owning or operating any public utility, is exempt, if such corporation is, as to its rates and charges or as to the issuance and guaranteeing of securities, under the supervision of or regulated by a public commission, board, or officer of the United States, or of Canada, or of any state, province, or municipal corporation in either of such countries. Equipment-trust securities based on chattel mortgages, leases, or agreements for conditional sale, of cars, locomotives, motor trucks, or other rolling stock or of motor vehicles mortgaged, leased, or sold to, or finished for the use of, a public utility, are exempt; and so are equipment securities where the ownership or title of such equipment is pledged or retained, in accordance with the laws of the United States or of any state, or of Canada or any province thereof, to secure the payment of such securities.

(G) Commercial paper and promissory notes are exempt when they are not offered directly or indirectly for sale to the public.

(H) Any security issued or guaranteed by an insurance company, except as provided in section 1707.32 of the Revised Code, is exempt if such company is under the supervision of, and the issuance or guaranty of such security is regulated by, a state.

(I) Any security, except notes, bonds, debentures, or other evidences of indebtedness or of promises or agreements to pay money, which is issued by a person, corporation, or association organized not for profit, including persons, corporations, and associations organized exclusively for conducting county fairs, or for religious, educational, social, recreational, athletic, benevolent, fraternal, charitable, or reformatory purposes, and agricultural cooperatives as defined in section 1729.01 of the Revised Code, is exempt, if no part of the net earnings of such issuer inures to the benefit of any shareholder or member of such issuer or of any individual, and if the total commission, remuneration, expense, or discount in connection with the sale of such securities does not exceed two per cent of the total sale price thereof plus five hundred dollars.

(J)(1) Any securities outstanding for a period of not less than five years, on which there has occurred no default in payment of principal, interest, or dividend or distribution for the five years immediately preceding the sale, are exempt.

(2) For the purpose of division (J) of this section, the dividend, distribution, or interest rate on securities in which no such rate is specified shall be at the rate of at least four per cent annually on the aggregate of the price at which such securities are to be sold.

(K) All bonds issued under authority of Chapter 165. or 761., or section 4582.06 or 4582.31 of the Revised Code are exempt.

Sec. 1707.11. For the purposes of this section, a "person," or an "applicant" for registration or claim of exemption, means every issuer.

Every applicant for registration or for claim of exemption pursuant to division (Q), (W), (X), or (Y) of section 1707.03 of the Revised Code, and every (A) EACH person submitting a notice filing pursuant to section 1707.092 of the Revised Code, for the sale of securities pursuant to this chapter, which THAT is an incorporated applicant or person not domiciled in ORGANIZED UNDER THE LAWS OF this state or, THAT IS not licensed under section 1703.03 of the Revised Code, or is an unincorporated applicant or person having the situs of THAT DOES NOT HAVE its principal place of business outside IN this state, shall file with its application or notice filing its SUBMIT TO THE DIVISION OF SECURITIES AN IRREVOCABLE CONSENT TO SERVICE OF PROCESS, AS DESCRIBED IN DIVISION (B) OF THIS SECTION, IN CONNECTION WITH ANY OF THE FOLLOWING:

(1) FILINGS TO CLAIM ANY OF THE EXEMPTIONS ENUMERATED IN DIVISION (Q), (W), (X), OR (Y) OF SECTION 1707.03 OF THE REVISED CODE;

(2) APPLICATIONS FOR REGISTRATION BY DESCRIPTION, QUALIFICATION, OR COORDINATION;

(3) NOTICE FILINGS PURSUANT TO SECTION 1707.092 OR 1707.141 OF THE REVISED CODE;

(4) APPLICATIONS FOR LICENSURE AS A SECURITIES DEALER UNDER SECTION 1707.15 OF THE REVISED CODE;

(5) APPLICATIONS FOR LICENSURE AS AN INVESTMENT ADVISER UNDER SECTION 1707.151 OF THE REVISED CODE.

(B) THE irrevocable written consent, SHALL BE executed and acknowledged by an individual duly authorized to give the consent, AND SHALL DO ALL OF THE FOLLOWING:

(1) DESIGNATE THE SECRETARY OF STATE AS AGENT FOR SERVICE OF PROCESS OR PLEADINGS;

(2) STATE that actions growing out of the sale of such securities, THE GIVING OF INVESTMENT ADVICE, or fraud committed by an applicant in this state A PERSON ON WHOSE BEHALF THE CONSENT IS SUBMITTED may be commenced against it THE PERSON, in the proper court of any county in this state in which a cause of action for fraud may arise or in which the plaintiff in the action may reside, by serving on the secretary of state any proper process or pleading authorized by the laws of this state. Such consent shall stipulate;

(3) STIPULATE that service of process or pleading on the secretary of state shall be taken in all courts to be as valid and binding as if service had been made upon the applicant itself PERSON ON WHOSE BEHALF THE CONSENT IS SUBMITTED.

(C) Service of any process or pleadings may be made on the secretary of state by duplicate copies, of which one shall be filed in the office of the secretary of state, and the other immediately forwarded by the secretary of state by certified mail to the principal place of business of the applicant, PERSON ON WHOSE BEHALF THE CONSENT IS SUBMITTED or TO the last known address as shown on the application form filed FILING MADE with the division, or if it has a principal office in this state, then to the principal office; but. HOWEVER, failure to mail such copy shall DOES not invalidate the service.

Sec. 1707.15. An application to act as dealer (A) APPLICATION FOR A DEALER'S LICENSE shall be MADE in writing ACCORDANCE WITH THIS SECTION and shall be filed BY FILING with the division of securities. It shall be in such form as the division prescribes, and verified by oath of the applicant, his agent, or his attorney, and it shall set forth THE INFORMATION, MATERIALS, AND FORMS SPECIFIED IN RULES ADOPTED BY THE DIVISION, ALONG WITH ALL OF THE FOLLOWING INFORMATION:

(A)(1) The name and address of the applicant;

(B)(2) A description of the applicant, including, if the applicant is a partnership, unincorporated association, or any similar form of business organization, the names and the residence and business addresses of all partners, officers, directors, trustees, or managers of the organization, and the limitation of the liability of any partner or member; and if the applicant is a corporation, a list of its executive officers and directors, and the residence and business addresses of each,; and if it is a foreign corporation, a copy of its articles of incorporation in addition thereto;

(C)(3) The location and addresses of the principal office and all other offices of the applicant;

(D)(4) A general description of the business of the applicant done prior to such THE application, including a list of states in which the applicant is a licensed dealer;

(E) The names and addresses of all salesmen of the applicant at the date of the application;

(F) The nature of the applicant's business, and its places of business, for the period of ten years next preceding the date of application.

Every (B) EACH applicant not a resident of this state shall name a person within this state upon whom process against such applicant may be served and shall give the complete residence and business address of the person designated.

Every applicant shall file an irrevocable consent to service of process on the secretary of state in the event that such applicant, if a resident of this state, or the person designated by the nonresident applicant, cannot be found at the address given. Such consent shall be given and service thereunder shall be made as provided in section 1707.11 of the Revised Code.

(C)(1) The division may investigate any applicant for a license, and may require such additional information as it deems necessary to determine the applicant's business repute and qualifications to act as a dealer in securities.

(2) If the application for any license involves investigation outside of this state, the applicant may be required by the division to advance sufficient funds to pay any of the actual expenses of such examination. An itemized statement of any such expenses which he THE APPLICANT is required to pay shall be furnished the applicant by the division.

If the applicant is merely renewing his license for the previous year the application need contain only the information required by divisions (B), (C), and (E) of this section.

(D) The division shall by rule require an applicant ONE NATURAL PERSON WHO IS A PRINCIPAL, OFFICER, DIRECTOR, GENERAL PARTNER, MANAGER, OR EMPLOYEE OF A DEALER to pass an examination which covers his knowledge of securities laws and practices DESIGNATED BY THE DIVISION. EACH DEALER THAT IS NOT A NATURAL PERSON SHALL NOTIFY THE DIVISION OF THE NAME AND RELATIONSHIP TO THE DEALER OF THE NATURAL PERSON WHO HAS PASSED THE EXAMINATION ON BEHALF OF THE DEALER AND WHO WILL SERVE AS THE DESIGNATED PRINCIPAL ON BEHALF OF THE DEALER.

(E) DEALERS SHALL EMPLOY AS SALESPERSONS ONLY THOSE SALESPERSONS WHO ARE LICENSED UNDER THIS CHAPTER. IF AT ANY TIME A SALESPERSON RESIGNS OR IS DISCHARGED OR A NEW SALESPERSON IS ADDED, THE DEALER SHALL PROMPTLY NOTIFY THE DIVISION.

(F) If the division finds that the applicant is of good business repute, appears qualified to act as a dealer in securities, and has fully complied with sections 1707.01 to 1707.45 of the Revised Code THIS CHAPTER AND RULES ADOPTED UNDER THIS CHAPTER BY THE DIVISION, the division shall issue to such applicant a license to act as dealer, upon payment by the applicant of the fee FEES prescribed by DIVISION (B) OF section 1707.17 of the Revised Code.

The division may, after proper hearing, refuse, as provided in section 1707.19 of the Revised Code, SHALL ISSUE to grant a license to the applicant.

Dealers shall employ as salesmen only those who are licensed under sections 1707.01 to 1707.45 of the Revised Code. If at any time such salesmen resign or are discharged or new salesmen are added, the dealer shall forthwith notify the division and shall file with the division the names and addresses of new salesmen A LICENSE AUTHORIZING THE APPLICANT TO ACT AS A DEALER.

Sec. 1707.151. (A) Application for an investment adviser's license shall be made in accordance with this section and by filing with the division of securities the information, materials, and forms specified in rules adopted by the division.

(B) Every applicant not a resident of this state shall name a person within this state upon whom process against such applicant may be served and shall give the complete residence and business address or addresses of the person designated.

(C) Every EACH applicant shall file an irrevocable consent to service of process naming the secretary of state for service of process in the event that the applicant, if a resident of this state, or the person designated pursuant to division (B) of this section, cannot be found at the address given on the application. The consent shall be given and service of process shall be made as provided in section 1707.11 of the Revised Code.

(D)(C)(1) The division may investigate any applicant for a license and may require any additional information as it considers necessary to determine the applicant's business repute and qualifications to act as an investment adviser.

(2) If the application for any license involves investigation outside of this state, the applicant may be required by the division to advance sufficient funds to pay any of the actual expenses of the examination. The division shall furnish the applicant with an itemized statement of such expenses that the applicant is required to pay.

(E)(D) The division shall by rule require one natural person who is a principal, officer, director, general partner, manager, or employee of an investment adviser to pass an examination designated by the division or achieve a specified professional designation. Every EACH investment adviser that is not a natural person shall notify the division of the name and relationship to the investment adviser of the natural person who has passed the examination or achieved the specified professional designation on behalf of the investment adviser and who will serve as the designated principal on behalf of the investment adviser.

(F)(E) An investment adviser licensed under section 1707.141 of the Revised Code shall employ only investment adviser representatives licensed, or exempted from licensure, under section 1707.161 of the Revised Code.

(G)(F) If the division finds that the applicant is of good business repute, appears to be qualified to act as an investment adviser, and has complied with sections 1707.01 to 1707.45 of the Revised Code THIS CHAPTER and rules adopted under those sections THIS CHAPTER by the division, the division, upon payment of the fees prescribed by division (B) of section 1707.17 of the Revised Code, shall issue to the applicant a license authorizing the applicant to act as an investment adviser.

Sec. 1707.16. (A) Every salesman SALESPERSON of securities must be licensed by the division of securities and shall be employed only by the licensed dealer specified in his THE SALESPERSON'S license. IF THE SALESPERSON SEVERS THE CONNECTION WITH THAT LICENSED DEALER, THE SALESPERSON'S LICENSE IS VOID.

The application (B) APPLICATION for a salesman's SALESPERSON'S license shall set forth BE MADE IN ACCORDANCE WITH THIS SECTION AND BY FILING WITH THE DIVISION THE INFORMATION, MATERIALS, AND FORMS SPECIFIED IN RULES ADOPTED BY THE DIVISION, ALONG WITH ALL OF THE FOLLOWING INFORMATION:

(A)(1) The name and complete residence and business addresses of the applicant;

(B)(2) The name of the dealer who is employing the applicant or who intends to employ him THE APPLICANT;

(C)(3) The applicant's age and education, and his THE APPLICANT'S experience in the sale of securities; whether he THE APPLICANT has ever been licensed by the division, and if so, when; whether he THE APPLICANT has ever been refused a license by the division; and whether he THE APPLICANT has ever been licensed or refused a license or any similar permit by any division or commissioner of securities, whatsoever name known or designated, anywhere;.

(C) THE DIVISION SHALL BY RULE REQUIRE AN APPLICANT TO PASS AN EXAMINATION DESIGNATED BY THE DIVISION.

(D) The nature of the employment, and the names and addresses of the employers, of the applicant for the period of ten years immediately preceding the date of the application.

If the division finds that the applicant is of good business repute, appears to be qualified to act as a salesman SALESPERSON of securities, and has fully complied with sections 1707.01 to 1707.45 of the Revised Code THIS CHAPTER, and that the dealer named in the application is a licensed dealer, the division shall, upon payment of the fees prescribed by section 1707.17 of the Revised Code, issue a license to the applicant authorizing him THE APPLICANT to act as salesman SALESPERSON for the dealer named in the application.

If such salesman severs his connection with such dealer, the salesman's license is void.

The division shall by rule require an applicant to pass an examination which covers his knowledge of securities laws and practices.

If the applicant is merely renewing his license for the previous year or renewing his license upon change of employment, only the information required under divisions (A) and (B) of this section need be given.

Sec. 1707.17. (A)(1) The license of every dealer in and salesperson of securities shall expire on the thirty-first day of December of each year, and may be renewed upon the filing with the division of securities of an application for renewal, and the payment of the fee prescribed in this section, between the first day of November and the fifteenth day of December of each year. The division may accept an application for renewal filed between the fifteenth and the thirty-first day of December of each year. The division also may accept an application for renewal received by the division not later than the tenth day of January of the subsequent calendar year, provided that the application for renewal is accompanied by the license renewal fee and the additional fee prescribed in division (B) of this section. The division shall give notice, without unreasonable delay, of its action on any application for renewal of a dealer's or salesperson's license.

(2) The license of every investment adviser and investment adviser representative licensed under section 1707.141 or 1707.161 of the Revised Code shall expire on the thirty-first day of December of each year. The licenses may be renewed upon the filing with the division of an application for renewal, and the payment of the fee prescribed in division (B) of this section, between the fifteenth day of October and the thirtieth day of November of each year. The division may accept an application for renewal filed between the first and thirty-first day of December of each year. The division also may accept an application for renewal received by the division not later than the tenth day of January of the subsequent calenar CALENDAR year, provided that the application for renewal is accompanied by the license renewal fee and the additional fee prescribed in division (B) of this section. The division shall give notice, without unreasonable delay, of its action on any application for renewal.

(3) An investment adviser required to make a notice filing under division (B) of section 1707.141 of the Revised Code annually shall file with the division the notice filing and the fee prescribed in division (B) of this section, no later than the thirty-first day of December of each year. The division may accept a notice filing received by the division not later than the tenth day of January of the subsequent calendar year, provided that the notice filing is accompanied by the notice filing fee and the additional fee prescribed in division (B) of this section.

(B)(1) The fee for each dealer's license, and for each annual renewal thereof that is received by the division not later than the thirty-first day of December of each year, shall be thirty dollars per salesperson, but not less than one hundred fifty nor more than five thousand dollars. Upon payment of an additional fee of one-half of the license renewal fee, the division may accept an application for renewal received by the division between the first and tenth day of January of the subsequent calendar year. The fee for the examination of applicant dealers, when administered by the division, shall be seventy-five dollars.

(2) The fee for each salesperson's license, and for each annual renewal thereof, shall be fifty dollars. The fee for the examination of an applicant salesperson, when administered by the division, shall be fifty dollars.

(3) The fee for each investment adviser's license, and for each annual renewal thereof that is received by the division not later than the thirty-first day of December of each year, shall be two hundred dollars. Upon the payment of an additional fee of one-half of the license fee, the division may accept a license renewal application received by the division between the first and tenth day of January of the subsequent calendar year. If the fee for an investment adviser license is paid to the division on or before October 1, 1999, that fee shall cover the issuance of the initial license and also shall cover any fee for renewal of the license for the period ending December 31, 2000.

(4) The fee for each investment adviser notice filing required by division (B) of section 1707.141 of the Revised Code and received by the division not later than the thirty-first day of December of each year shall be one hundred dollars. Upon the payment of an additional fee of one-half of the notice filing fee, the division may accept a notice filing received by the division between the first and tenth day of January of the subsequent calendar year. A notice filing may be made at any time during the calendar year. In that event, the notice filing fee shall not be reduced. If the fee for an investment adviser notice filing is paid to the division on or before October 1, 1999, that fee shall cover the initial notice filing and also shall cover any fee for the notice filing for the period ending December 31, 2000.

(5) The fee for each investment adviser representative's license, and for each annual renewal thereof that is received by the division not later than the thirty-first day of December of each year, shall be thirty-five dollars; however, the fee shall be waived for the investment adviser representative designated the principal of the investment adviser pursuant to division (E)(D) of section 1707.151 of the Revised Code. Upon the payment of an additional fee of one-half of the license fee, the division may accept a license renewal application received by the division between the first and tenth day of January of the subsequent calendar year. If the fee for an investment adviser representative's license is paid to the division on or before October 1, 1999, that fee shall cover the issuance of the initial license and also shall cover any fee for renewal of the license for the period ending December 31, 2000.

(C) A dealer's, salesperson's, investment adviser's, or investment adviser representative's license may be issued at any time for the remainder of the calendar year. In that event, the annual fee shall not be reduced.

Sec. 1707.23. Whenever it appears to the division of securities, from its files, upon complaint, or otherwise, that any person has engaged in, is engaged in, or is about to engage in any practice declared to be illegal or prohibited by Chapter 1707. of the Revised Code THIS CHAPTER or rules adopted under that THIS chapter by the division, or defined as fraudulent in that THIS chapter or rules adopted under that THIS chapter by the division, or any other deceptive scheme or practice in connection with the sale of securities, or acting as an investment adviser or investment adviser representative, or when the division believes it to be in the best interests of the public and necessary for the protection of investors, the division may do any of the following:

(A) Require any person to file with it, on such forms as it prescribes, an original or additional statement or report in writing, under oath or otherwise, as to any facts or circumstances concerning the issuance, sale, or offer for sale of securities within this state by the person, as to the person's acts or practices as an investment adviser or investment adviser representative within this state, and as to other information as it deems material or relevant thereto;

(B) Examine any investment adviser, investment adviser representative, or any seller, dealer, salesperson, or issuer of any securities, and any of their agents, employees, partners, officers, directors, members, or shareholders, wherever located, under oath; and examine records, books, documents, accounts, and papers as the division deems material or relevant to the inquiry;

(C) Require the attendance of witnesses, and the production of books, records, and papers, as are required either by the division or by any party to a hearing before the division, and for that purpose issue a subpoena for any witness, or a subpoena duces tecum to compel the production of any books, records, or papers. The subpoena shall be served by PERSONAL SERVICE OR BY certified mail, return receipt requested. If the subpoena is returned because of inability to deliver, or if no return is received within thirty days of the date of mailing, the subpoena may be served by ordinary mail. If no return of ordinary mail is received within thirty days after the date of mailing, service shall be deemed to have been made. If the subpoena is returned because of inability to deliver, the division may designate a person or persons to effect either personal or residence service upon the witness. The person DESIGNATED TO EFFECT PERSONAL OR RESIDENCE SERVICE UNDER THIS DIVISION may be the sheriff of the county in which the witness resides or may be found or any other duly designated person. The fees and mileage of the person serving the subpoena shall be the same as those allowed by the courts of common pleas in criminal cases, and shall be paid from the funds of the division. Fees and mileage for the witness shall be the same as those allowed for witnesses by the courts of common pleas in criminal cases, and shall be paid from the funds of the division upon request of the witness following the hearing.

(D) Proceed under section 1707.19 of the Revised Code to suspend the license of any licensed dealer, licensed salesperson, licensed investment adviser, or licensed investment adviser representative and ultimately, if the division determines, revoke such license under such sections;

(E) Initiate criminal proceedings under section 1707.042 or 1707.44 of the Revised Code or rules adopted under those sections by the division by laying before the prosecuting attorney of the proper county any evidence of criminality which comes to its knowledge; and in the event of the neglect or refusal of the prosecuting attorney to prosecute such violations, or at the request of the prosecuting attorney, the division shall submit the evidence to the attorney general, who may proceed in the prosecution with all the rights, privileges, and powers conferred by law on prosecuting attorneys, including the power to appear before grand juries and to interrogate witnesses before such grand juries.

(F) Require any dealers forthwith to furnish to the division copies of prospectuses, circulars, or advertisements respecting securities that they publish or generally distribute, or require any investment advisers immediately to furnish to the division copies of brochures, advertisements, publications, analyses, reports, or other writings that they publish or distribute;

(G) Require any dealers to mail to the division, prior to sale, notices of intention to sell, in respect to all securities which are not exempt under section 1707.02 of the Revised Code, or which are sold in transactions not exempt under section 1707.03 or 1707.04 of the Revised Code;

(H) Issue and cause to be served by certified mail upon all persons affected an order requiring the person or persons to cease and desist from the acts or practices appearing to the division to constitute violations of Chapter 1707. of the Revised Code THIS CHAPTER or rules adopted under that THIS chapter by the division. The order shall state specifically the section or sections of Chapter 1707. of the Revised Code THIS CHAPTER or the rule or rules adopted under that THIS chapter by the division that appear to the division to have been violated and the facts constituting the violation. If after the issuance of the order it appears to the division that any person or persons affected by the order have engaged in any act or practice from which the person or persons shall have been required, by the order, to cease and desist, the director of commerce may apply to the court of common pleas of any county for, and upon proof of the validity of the order of the division, the delivery of the order to the person or persons affected, and of the illegality and the continuation of the acts or practices that are the subject of the order, the court may grant an injunction implementing the order of the division.

(I) Issue and initiate contempt proceedings in this state regarding subpoenas and subpoenas duces tecum at the request of the securities administrator of another state, if it appears to the division that the activities for which the information is sought would violate Chapter 1707. of the Revised Code THIS CHAPTER if the activities had occurred in this state.

Sec. 3916.01. AS USED IN THIS CHAPTER:

(A) "FINANCING ENTITY" MEANS AN UNDERWRITER, PLACEMENT AGENT, LENDER, PURCHASER OF SECURITIES, PURCHASER OF A POLICY OR CERTIFICATE FROM A VIATICAL SETTLEMENT PROVIDER, CREDIT ENHANCER, OR ANY OTHER PERSON THAT IS A PARTY TO A VIATICAL SETTLEMENT CONTRACT, HAS AN AGREEMENT IN WRITING WITH A VIATICAL SETTLEMENT PROVIDER TO ACT AS A PARTICIPANT IN A FINANCING TRANSACTION, AND HAS A DIRECT OWNERSHIP INTEREST IN THE POLICY OR CERTIFICATE THAT IS THE SUBJECT OF THE VIATICAL SETTLEMENT CONTRACT, BUT WHOSE SOLE ACTIVITY RELATED TO THE TRANSACTION IS PROVIDING FUNDS TO EFFECT THE VIATICAL SETTLEMENT.

(B) "FINANCING TRANSACTION" MEANS A TRANSACTION IN WHICH A LICENSED VIATICAL SETTLEMENT PROVIDER OR A FINANCING ENTITY OBTAINS FINANCING FOR VIATICAL SETTLEMENT CONTRACTS, VIATICATED POLICIES, OR INTERESTS THEREIN, WHICH FINANCING INCLUDES, BUT IS NOT LIMITED TO, ANY SECURED OR UNSECURED FINANCING, ANY SECURITIZATION TRANSACTION OR SECURITIES OFFERING THAT IS EITHER REGISTERED OR EXEMPT FROM REGISTRATION UNDER FEDERAL SECURITIES LAW AND CHAPTER 1707. of the Revised Code, OR ANY DIRECT PURCHASE OF INTERESTS IN A POLICY OR CERTIFICATE, IF THE TRANSACTION COMPLIES WITH FEDERAL SECURITIES LAW AND CHAPTER 1707. of the Revised Code.

(C) "VIATICAL SETTLEMENT BROKER" MEANS A PERSON THAT, ON BEHALF OF A VIATOR AND FOR A FEE, COMMISSION, OR OTHER VALUABLE CONSIDERATION, OFFERS OR ATTEMPTS TO NEGOTIATE VIATICAL SETTLEMENTS BETWEEN A VIATOR AND ONE OR MORE VIATICAL SETTLEMENT PROVIDERS. "VIATICAL SETTLEMENT BROKER" DOES NOT INCLUDE AN ATTORNEY, A CERTIFIED PUBLIC ACCOUNTANT, OR A FINANCIAL PLANNER RETAINED TO REPRESENT THE VIATOR WHOSE COMPENSATION IS PAID DIRECTLY BY, OR AT THE DIRECTION OF, THE VIATOR.

(D) "VIATICAL SETTLEMENT CONTRACT" MEANS EITHER OF THE FOLLOWING:

(1) AN AGREEMENT BETWEEN A VIATICAL SETTLEMENT PROVIDER AND A VIATOR UNDER WHICH THE VIATICAL SETTLEMENT PROVIDER PAYS COMPENSATION OR ANY OTHER THING OF VALUE, WHICH COMPENSATION OR OTHER THING OF VALUE IS LESS THAN THE EXPECTED DEATH BENEFIT OF THE INSURANCE POLICY OR CERTIFICATE, IN RETURN FOR THE VIATOR'S ASSIGNMENT, TRANSFER, SALE, DEVISE, OR BEQUEST OF THE DEATH BENEFIT OR OWNERSHIP OF ALL OR A PORTION OF THE INSURANCE POLICY OR CERTIFICATE TO THE VIATICAL SETTLEMENT PROVIDER;

(2) A CONTRACT FOR A LOAN OR ANY OTHER FINANCIAL TRANSACTION SECURED PRIMARILY BY AN INDIVIDUAL OR GROUP LIFE INSURANCE POLICY OR CERTIFICATE, OTHER THAN A LOAN BY A LIFE INSURANCE COMPANY PURSUANT TO THE TERMS OF THE LIFE INSURANCE CONTRACT OR A LOAN SECURED BY THE CASH VALUE OF A POLICY OR CERTIFICATE.

(E)(1) "VIATICAL SETTLEMENT PROVIDER" MEANS EITHER OF THE FOLLOWING:

(a) A PERSON, OTHER THAN A VIATOR, THAT ENTERS INTO A VIATICAL SETTLEMENT CONTRACT;

(b) A PERSON THAT OBTAINS FINANCING FROM A FINANCING ENTITY FOR THE PURCHASE, ACQUISITION, TRANSFER, OR OTHER ASSIGNMENT OF ONE OR MORE VIATICAL SETTLEMENT CONTRACTS, VIATICATED POLICIES, OR INTERESTS THEREIN, OR THAT OTHERWISE SELLS, ASSIGNS, TRANSFERS, PLEDGES, HYPOTHECATES, OR OTHERWISE DISPOSES OF ONE OR MORE VIATICAL SETTLEMENT CONTRACTS, VIATICATED POLICIES, OR INTERESTS THEREIN.

(2) "VIATICAL SETTLEMENT PROVIDER" DOES NOT INCLUDE ANY OF THE FOLLOWING:

(a) A BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, OR OTHER FINANCIAL INSTITUTION THAT TAKES AN ASSIGNMENT OF A LIFE INSURANCE POLICY OR CERTIFICATE AS COLLATERAL FOR A LOAN;

(b) THE ISSUER OF A LIFE INSURANCE POLICY OR CERTIFICATE PROVIDING ACCELERATED BENEFITS AS DEFINED IN SECTION 3915.21 of the Revised Code;

(c) AN INDIVIDUAL WHO ENTERS INTO NOT MORE THAN ONE AGREEMENT IN ANY CALENDAR YEAR FOR THE TRANSFER OF LIFE INSURANCE POLICIES OR CERTIFICATES FOR ANY VALUE LESS THAN THE EXPECTED DEATH BENEFIT.

(F) "VIATICAL SETTLEMENT REPRESENTATIVE" MEANS AN APPOINTED AGENT OF A LICENSED VIATICAL SETTLEMENT PROVIDER OR VIATICAL SETTLEMENT BROKER, AS APPLICABLE, THAT ACTS OR AIDS IN ANY MANNER IN THE SOLICITATION OF A VIATICAL SETTLEMENT. "VIATICAL SETTLEMENT REPRESENTATIVE" DOES NOT INCLUDE ANY OF THE FOLLOWING:

(1) AN ATTORNEY, A CERTIFIED PUBLIC ACCOUNTANT, A FINANCIAL PLANNER, OR ANY OTHER PERSON EXERCISING A POWER OF ATTORNEY GRANTED BY A VIATOR;

(2) ANY PERSON THAT IS RETAINED TO REPRESENT A VIATOR AND WHOSE COMPENSATION IS PAID BY OR AT THE DIRECTION OF THE VIATOR, REGARDLESS OF WHETHER THE VIATICAL SETTLEMENT IS CONSUMMATED.

(G) "VIATICATED POLICY" MEANS A LIFE INSURANCE POLICY OR CERTIFICATE THAT HAS BEEN ACQUIRED BY A VIATICAL SETTLEMENT PROVIDER, OR BY A PERSON DESIGNATED BY THE VIATICAL SETTLEMENT PROVIDER, PURSUANT TO A VIATICAL SETTLEMENT CONTRACT.

(H) "VIATOR" MEANS THE OWNER OF A LIFE INSURANCE POLICY OR A CERTIFICATE HOLDER UNDER A GROUP POLICY INSURING THE LIFE OF AN INDIVIDUAL WITH A TERMINAL OR CHRONIC ILLNESS OR CONDITION, WHO ENTERS OR SEEKS TO ENTER INTO A VIATICAL SETTLEMENT CONTRACT.

Sec. 3916.02. NO PERSON SHALL ACT AS A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER WITHOUT FIRST HAVING OBTAINED A LICENSE FROM THE SUPERINTENDENT OF INSURANCE.

Sec. 3916.03. (A) AN APPLICANT FOR A LICENSE AS A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER SHALL SUBMIT AN APPLICATION FOR THE LICENSE IN A MANNER PRESCRIBED BY THE SUPERINTENDENT OF INSURANCE. THE APPLICATION SHALL BE ACCOMPANIED BY A FEE ESTABLISHED BY THE SUPERINTENDENT BY RULE ADOPTED IN ACCORDANCE WITH CHAPTER 119. of the Revised Code.

(B) THE SUPERINTENDENT SHALL ISSUE TO AN APPLICANT A LICENSE THAT STATES IN SUBSTANCE THAT THE PERSON IS AUTHORIZED TO ACT AS A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER, AS APPLICABLE, IF BOTH OF THE FOLLOWING APPLY:

(1) THE APPLICANT PROVIDES A DETAILED PLAN OF OPERATION AND, IF THE APPLICANT IS A LEGAL ENTITY, A CERTIFICATE OF GOOD STANDING FROM THE SECRETARY OF STATE OR OTHER PROOF SATISFACTORY TO THE SUPERINTENDENT.

(2) THE SUPERINTENDENT FINDS ALL OF THE FOLLOWING:

(a) THE APPLICANT IS COMPETENT AND TRUSTWORTHY AND INTENDS TO ACT IN GOOD FAITH IN THE CAPACITY OF A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER, AS APPLICABLE.

(b) THE APPLICANT HAS A GOOD BUSINESS REPUTATION AND HAS HAD EXPERIENCE, TRAINING, OR EDUCATION SO AS TO BE QUALIFIED TO ACT IN THE CAPACITY OF A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER, AS APPLICABLE.

(C) AN APPLICANT SHALL PROVIDE ALL INFORMATION REQUESTED BY THE SUPERINTENDENT. THE SUPERINTENDENT MAY, AT ANY TIME, REQUIRE AN APPLICANT TO FULLY DISCLOSE THE IDENTITY OF ALL STOCKHOLDERS, PARTNERS, OFFICERS, MEMBERS, AND EMPLOYEES, AND MAY, IN THE EXERCISE OF THE SUPERINTENDENT'S DISCRETION, REFUSE TO ISSUE A LICENSE TO A LEGAL ENTITY IF THE SUPERINTENDENT IS NOT SATISFIED THAT EACH OFFICER, EMPLOYEE, STOCKHOLDER, PARTNER, OR MEMBER WHO MAY MATERIALLY INFLUENCE THE APPLICANT'S CONDUCT MEETS THE STANDARDS SET FORTH IN THIS CHAPTER.

(D) A LICENSE ISSUED TO A LEGAL ENTITY DOES NOT AUTHORIZE ANY MEMBER, OFFICER, OR EMPLOYEE TO ACT AS A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER, AS APPLICABLE, UNDER THE LICENSE. EACH MEMBER, OFFICER, AND EMPLOYEE INVOLVED IN A VIATICAL SETTLEMENT TRANSACTION SHALL BE LICENSED UNDER THIS CHAPTER, UNLESS THEY PERFORM ONLY CLERICAL OR MINISTERIAL DUTIES.

(E) A LICENSE AS A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER MAY, IN THE DISCRETION OF THE SUPERINTENDENT AND THE PAYMENT OF A RENEWAL FEE ESTABLISHED BY THE SUPERINTENDENT BY RULE ADOPTED IN ACCORDANCE WITH CHAPTER 119. of the Revised Code, BE CONTINUED PAST THE LAST DAY OF FEBRUARY NEXT AFTER ITS ISSUE AND AFTER THE LAST DAY OF FEBRUARY IN EACH SUCCEEDING YEAR. FAILURE TO PAY THE RENEWAL FEE BY THE REQUIRED DATE RESULTS IN THE EXPIRATION OF THE LICENSE.

(F) THE SUPERINTENDENT SHALL NOT ISSUE A LICENSE TO A NONRESIDENT APPLICANT, UNLESS A WRITTEN DESIGNATION OF AN AGENT FOR SERVICE OF PROCESS IS FILED AND MAINTAINED WITH THE SUPERINTENDENT.

(G) ANY FEE COLLECTED UNDER THIS SECTION SHALL BE PAID INTO THE STATE TREASURY TO THE CREDIT OF THE DEPARTMENT OF INSURANCE OPERATING FUND CREATED BY SECTION 3901.021 of the Revised Code.

Sec. 3916.05. (A) A VIATICAL SETTLEMENT REPRESENTATIVE SHALL NOT SOLICIT A VIATICAL SETTLEMENT CONTRACT WITHOUT FIRST OBTAINING AN APPOINTMENT FROM A VIATICAL SETTLEMENT PROVIDER OR VIATICAL SETTLEMENT BROKER.

(B) A VIATICAL SETTLEMENT REPRESENTATIVE SHALL NOT REPRESENT BOTH THE VIATICAL SETTLEMENT PROVIDER AND THE VIATICAL SETTLEMENT BROKER WITH RESPECT TO THE SAME VIATOR.

Sec. 3916.07. (A) IF A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT BROKER, OR VIATICAL SETTLEMENT REPRESENTATIVE SUSPECTS ANOTHER VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT BROKER, OR VIATICAL SETTLEMENT REPRESENTATIVE OF FRAUD, FORGERY, MISREPRESENTATION, THEFT, CONVERSION, ANY OTHER CULPABLE MISAPPROPRIATION, OR ANY VIOLATION OF TITLE XXXIX OF THE REVISED CODE, THE VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT BROKER, OR VIATICAL SETTLEMENT REPRESENTATIVE PROMPTLY SHALL NOTIFY THE SUPERINTENDENT OF INSURANCE OF THE SUSPICION. THE NOTICE SHALL INCLUDE A COMPLETE STATEMENT OF THE FACTS AND THE REASONS THAT GAVE RISE TO THE SUSPICION.

(B) IN THE ABSENCE OF FRAUD OR BAD FAITH, A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT BROKER, OR VIATICAL SETTLEMENT REPRESENTATIVE IS IMMUNE FROM ANY CIVIL LIABILITY THAT OTHERWISE MIGHT BE IMPOSED AS A RESULT OF ANY ACTION TAKEN BY THE VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT BROKER, OR VIATICAL SETTLEMENT REPRESENTATIVE TO COMPLY WITH DIVISION (A) OF THIS SECTION.

Sec. 3916.08. IRRESPECTIVE OF THE MANNER IN WHICH THE VIATICAL SETTLEMENT BROKER IS COMPENSATED, A VIATICAL SETTLEMENT BROKER IS DEEMED TO REPRESENT ONLY THE VIATOR AND OWES A FIDUCIARY DUTY TO THE VIATOR TO ACT ACCORDING TO THE VIATOR'S INSTRUCTIONS AND IN THE BEST INTEREST OF THE VIATOR.

Sec. 3916.10. (A) A PERSON SHALL NOT USE A VIATICAL SETTLEMENT CONTRACT FORM OR PROVIDE A DISCLOSURE STATEMENT FORM TO A VIATOR IN THIS STATE UNLESS THE VIATICAL SETTLEMENT CONTRACT FORM OR THE DISCLOSURE STATEMENT FORM IS FILED WITH AND APPROVED BY THE SUPERINTENDENT OF INSURANCE. THE SUPERINTENDENT SHALL DISAPPROVE A VIATICAL SETTLEMENT CONTRACT FORM OR A DISCLOSURE STATEMENT FORM IF, IN THE SUPERINTENDENT'S OPINION, THE VIATICAL SETTLEMENT CONTRACT FORM, THE DISCLOSURE STATEMENT FORM, OR ANY PROVISION CONTAINED THEREIN IS UNREASONABLE, CONTRARY TO THE INTERESTS OF THE PUBLIC, OR OTHERWISE MISLEADING OR UNFAIR TO THE VIATOR.

(B) THE SUPERINTENDENT MAY ADOPT RULES IN ACCORDANCE WITH CHAPTER 119. of the Revised Code TO ESTABLISH REASONABLE FEES FOR ANY SERVICE OR TRANSACTION PERFORMED BY THE DEPARTMENT OF INSURANCE PURSUANT TO DIVISION (A) OF THIS SECTION. ANY FEE COLLECTED PURSUANT TO THOSE RULES SHALL BE PAID INTO THE STATE TREASURY TO THE CREDIT OF THE DEPARTMENT OF INSURANCE OPERATING FUND CREATED BY SECTION 3901.021 of the Revised Code.

Sec. 3916.12. (A) A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER SHALL DISCLOSE THE FOLLOWING TO A VIATOR NO LATER THAN THE TIME OF APPLICATION:

(1) POSSIBLE ALTERNATIVES TO VIATICAL SETTLEMENT CONTRACTS FOR INDIVIDUALS WITH CATASTROPHIC, LIFE-THREATENING, OR CHRONIC ILLNESSES, INCLUDING ANY ACCELERATED DEATH BENEFITS OFFERED UNDER THE VIATOR'S LIFE INSURANCE POLICY OR CERTIFICATE;

(2) THAT SOME OR ALL OF THE PROCEEDS OF THE VIATICAL SETTLEMENT MAY BE SUBJECT TO FEDERAL INCOME TAXATION AND STATE FRANCHISE AND INCOME TAXATION, AND THAT ASSISTANCE SHOULD BE SOUGHT FROM A PROFESSIONAL TAX ADVISOR;

(3) THAT THE PROCEEDS OF THE VIATICAL SETTLEMENT COULD BE SUBJECT TO THE CLAIMS OF CREDITORS;

(4) THAT RECEIPT OF THE PROCEEDS OF THE VIATICAL SETTLEMENT MAY ADVERSELY AFFECT THE VIATOR'S ELIGIBILITY FOR MEDICAL ASSISTANCE UNDER CHAPTER 5111. of the Revised Code OR OTHER GOVERNMENT BENEFITS OR ENTITLEMENTS, AND THAT ADVICE SHOULD BE OBTAINED FROM THE APPROPRIATE GOVERNMENT AGENCIES;

(5) THAT THE VIATOR HAS A RIGHT TO RESCIND THE VIATICAL SETTLEMENT CONTRACT FOR AT LEAST FIFTEEN DAYS AFTER THE VIATOR RECEIVES THE VIATICAL SETTLEMENT PROCEEDS;

(6) THAT FUNDS WILL BE SENT TO THE VIATOR WITHIN TWO BUSINESS DAYS AFTER THE VIATICAL SETTLEMENT PROVIDER HAS RECEIVED ACKNOWLEDGMENT FROM THE INSURER OR GROUP ADMINISTRATOR THAT OWNERSHIP OF THE POLICY OR INTEREST IN THE CERTIFICATE HAS BEEN TRANSFERRED AND THAT THE BENEFICIARY HAS BEEN DESIGNATED PURSUANT TO THE VIATICAL SETTLEMENT CONTRACT;

(7) THAT ENTERING INTO A VIATICAL SETTLEMENT CONTRACT MAY CAUSE OTHER RIGHTS OR BENEFITS, INCLUDING CONVERSION RIGHTS AND WAIVER OF PREMIUM BENEFITS THAT MAY EXIST UNDER THE POLICY OR CERTIFICATE, TO BE FORFEITED BY THE VIATOR AND THAT ASSISTANCE SHOULD BE SOUGHT FROM A FINANCIAL ADVISOR.

(B) A VIATICAL SETTLEMENT PROVIDER SHALL DISCLOSE THE FOLLOWING TO A VIATOR PRIOR TO THE DATE THE VIATICAL SETTLEMENT CONTRACT IS SIGNED BY ALL THE NECESSARY PARTIES:

(1) THE AFFILIATION, IF ANY, BETWEEN THE VIATICAL SETTLEMENT PROVIDER AND THE ISSUER OF THE INSURANCE POLICY OR CERTIFICATE TO BE VIATICATED;

(2) IF AN INSURANCE POLICY OR CERTIFICATE TO BE VIATICATED HAS BEEN ISSUED AS A JOINT POLICY OR CERTIFICATE OR INVOLVES FAMILY RIDERS OR ANY COVERAGE OF A LIFE OTHER THAN THE INSURED, THE POSSIBLE LOSS OF COVERAGE ON THE OTHER LIVES AND THAT ADVICE SHOULD BE SOUGHT FROM THE VIATOR'S INSURANCE PRODUCER OR THE COMPANY ISSUING THE POLICY OR CERTIFICATE;

(3) THE DOLLAR AMOUNT OF THE CURRENT DEATH BENEFIT PAYABLE TO THE VIATICAL SETTLEMENT PROVIDER UNDER THE POLICY OR CERTIFICATE, ALONG WITH THE AVAILABILITY OF ANY ADDITIONAL GUARANTEED INSURANCE BENEFITS, THE DOLLAR AMOUNT OF ANY ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS UNDER THE POLICY OR CERTIFICATE, AND THE VIATICAL SETTLEMENT PROVIDER'S INTEREST IN THOSE BENEFITS.

Sec. 3916.13. A VIATICAL SETTLEMENT PROVIDER ENTERING INTO A VIATICAL SETTLEMENT CONTRACT SHALL FIRST OBTAIN ALL OF THE FOLLOWING:

(A) IF THE VIATOR IS THE INSURED, A WRITTEN STATEMENT FROM AN ATTENDING PHYSICIAN THAT THE VIATOR IS OF SOUND MIND AND UNDER NO CONSTRAINT OR UNDUE INFLUENCE TO ENTER INTO A VIATICAL SETTLEMENT CONTRACT. AS USED IN THIS DIVISION, "PHYSICIAN" MEANS A PERSON AUTHORIZED UNDER CHAPTER 4731. of the Revised Code TO PRACTICE MEDICINE AND SURGERY OR OSTEOPATHIC MEDICINE AND SURGERY.

(B) A WITNESSED DOCUMENT IN WHICH THE VIATOR, IN WRITING, CONSENTS TO THE VIATICAL SETTLEMENT CONTRACT, ACKNOWLEDGES THAT THE INSURED HAS A TERMINAL OR CHRONIC ILLNESS OR CONDITION, REPRESENTS THAT THE VIATOR HAS A FULL AND COMPLETE UNDERSTANDING OF THE VIATICAL SETTLEMENT CONTRACT AND OF THE BENEFITS OF THE LIFE INSURANCE POLICY OR CERTIFICATE, AND ACKNOWLEDGES THAT THE VIATOR HAS ENTERED INTO THE VIATICAL SETTLEMENT CONTRACT FREELY AND VOLUNTARILY;

(C) A DOCUMENT IN WHICH THE INSURED CONSENTS IN WRITING TO THE RELEASE OF THE INSURED'S MEDICAL RECORDS TO A VIATICAL SETTLEMENT PROVIDER OR VIATICAL SETTLEMENT BROKER.

Sec. 3916.15. EACH VIATICAL SETTLEMENT CONTRACT ENTERED INTO IN THIS STATE SHALL PROVIDE THE VIATOR WITH AN UNCONDITIONAL RIGHT TO RESCIND THE CONTRACT FOR AT LEAST FIFTEEN DAYS AFTER THE RECEIPT OF THE VIATICAL SETTLEMENT PROCEEDS. IF THE INSURED DIES DURING THE RESCISSION PERIOD, THE VIATICAL SETTLEMENT CONTRACT IS DEEMED TO HAVE BEEN RESCINDED, SUBJECT TO REPAYMENT OF ALL VIATICAL SETTLEMENT PROCEEDS TO THE VIATICAL SETTLEMENT PROVIDER. IF A VIATICAL SETTLEMENT CONTRACT IS RESCINDED BY THE VIATOR PURSUANT TO THIS SECTION, OWNERSHIP OF THE INSURANCE POLICY OR CERTIFICATE REVERTS TO THE VIATOR OR TO THE VIATOR'S ESTATE IF THE VIATOR IS DECEASED, IRRESPECTIVE OF ANY TRANSFER OF OWNERSHIP OF THE POLICY OR CERTIFICATE BY THE VIATOR, VIATICAL SETTLEMENT PROVIDER, OR ANY OTHER PERSON.

Sec. 3916.17. (A) A VIATICAL SETTLEMENT PROVIDER, IMMEDIATELY UPON RECEIPT OF DOCUMENTS TO EFFECT THE TRANSFER OF THE INSURANCE POLICY OR CERTIFICATE, SHALL PAY THE PROCEEDS OF THE VIATICAL SETTLEMENT TO AN ESCROW OR TRUST ACCOUNT IN A STATE OR FEDERALLY CHARTERED FINANCIAL INSTITUTION WHOSE DEPOSITS ARE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION. THE ACCOUNT SHALL BE MANAGED BY A TRUSTEE OR ESCROW AGENT INDEPENDENT OF THE PARTIES TO THE CONTRACT. THE TRUSTEE OR ESCROW AGENT SHALL TRANSFER THE PROCEEDS TO THE VIATOR IMMEDIATELY UPON THE VIATICAL SETTLEMENT PROVIDER'S RECEIPT OF ACKNOWLEDGMENT OF THE TRANSFER OF THE INSURANCE POLICY OR CERTIFICATE.

(B) FAILURE TO TRANSFER THE PROCEEDS TO THE VIATOR WITHIN TWO BUSINESS DAYS AFTER THE VIATICAL SETTLEMENT PROVIDER RECEIVES ACKNOWLEDGMENT OF THE TRANSFER OF THE INSURANCE POLICY OR CERTIFICATE RENDERS THE VIATICAL SETTLEMENT CONTRACT VOIDABLE BY THE VIATOR FOR LACK OF CONSIDERATION UNTIL THE TIME CONSIDERATION IS TENDERED TO AND ACCEPTED BY THE VIATOR. IF A VIATICAL SETTLEMENT CONTRACT IS VOIDED BY THE VIATOR PURSUANT TO THIS DIVISION, OWNERSHIP OF THE INSURANCE POLICY OR CERTIFICATE REVERTS TO THE VIATOR OR TO THE VIATOR'S ESTATE IF THE VIATOR IS DECEASED, IRRESPECTIVE OF ANY TRANSFER OF OWNERSHIP OF THE POLICY OR CERTIFICATE BY THE VIATOR, VIATICAL SETTLEMENT PROVIDER, OR ANY OTHER PERSON.

Sec. 3916.19. AFTER A VIATICAL SETTLEMENT HAS OCCURRED, THE VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER SHALL NOT CONTACT THE INSURED FOR THE PURPOSE OF DETERMINING THE INSURED'S HEALTH STATUS MORE THAN ONCE EVERY THREE MONTHS IF THE INSURED HAS A LIFE EXPECTANCY OF MORE THAN ONE YEAR, OR MORE THAN ONCE PER MONTH IF THE INSURED HAS A LIFE EXPECTANCY OF ONE YEAR OR LESS. THE VIATICAL SETTLEMENT PROVIDER OR VIATICAL SETTLEMENT BROKER SHALL EXPLAIN THE PROCEDURE FOR MAKING THESE CONTACTS AT THE TIME THE VIATICAL SETTLEMENT CONTRACT IS ENTERED INTO.

THE LIMITATIONS SET FORTH IN THIS SECTION DO NOT APPLY TO CONTACTS MADE WITH AN INSURED UNDER A VIATICATED POLICY FOR PURPOSES OTHER THAN TO DETERMINE THE INSURED'S HEALTH STATUS.

Sec. 3916.21. (A) EACH VIATICAL SETTLEMENT PROVIDER SHALL MAINTAIN RECORDS OF ALL TRANSACTIONS OF VIATICAL SETTLEMENT CONTRACTS, INCLUDING THE NAME, INDIVIDUAL IDENTIFICATION, AND MEDICAL RECORD OF THE VIATOR. SUCH RECORDS SHALL BE MADE AVAILABLE TO THE SUPERINTENDENT OF INSURANCE FOR INSPECTION DURING REASONABLE BUSINESS HOURS.

(B) A VIATICAL SETTLEMENT PROVIDER SHALL MAINTAIN THE RECORD OF A VIATICAL SETTLEMENT FOR AT LEAST FIVE YEARS AFTER THE DEATH OF THE INSURED.

Sec. 3916.22. EACH VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, AND VIATICAL SETTLEMENT BROKER LICENSED UNDER THIS CHAPTER SHALL FILE WITH THE SUPERINTENDENT OF INSURANCE, ON OR BEFORE THE FIRST DAY OF MARCH, AN ANNUAL STATEMENT CONTAINING THE INFORMATION REQUIRED BY THE SUPERINTENDENT BY RULE ADOPTED IN ACCORDANCE WITH CHAPTER 119. of the Revised Code.

Sec. 3916.24. EXCEPT AS OTHERWISE PERMITTED OR REQUIRED BY LAW, A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, VIATICAL SETTLEMENT BROKER, INSURANCE COMPANY, INSURANCE AGENT, INSURANCE BROKER, INFORMATION BUREAU, RATING AGENCY OR COMPANY, OR ANY OTHER PERSON WITH ACTUAL KNOWLEDGE OF A VIATOR'S IDENTITY, SHALL NOT DISCLOSE THAT IDENTITY AS A VIATOR, INCLUDING THE VIATOR'S NAME, INDIVIDUAL IDENTIFICATION DATA, OR MEDICAL RECORD, UNLESS ANY OF THE FOLLOWING APPLY:

(A) THE DISCLOSURE IS NECESSARY TO EFFECT A VIATICAL SETTLEMENT BETWEEN THE VIATOR AND A VIATICAL SETTLEMENT PROVIDER, AND THE VIATOR HAS PROVIDED PRIOR WRITTEN CONSENT TO THE DISCLOSURE.

(B) THE DISCLOSURE IS PROVIDED IN RESPONSE TO AN INVESTIGATION OR EXAMINATION BY THE SUPERINTENDENT OF INSURANCE OR BY ANY OTHER GOVERNMENTAL OFFICER OR AGENCY.

(C) THE DISCLOSURE IS A TERM OF, OR CONDITION TO, THE TRANSFER OF A VIATICATED POLICY BY ONE VIATICAL SETTLEMENT PROVIDER TO ANOTHER VIATICAL SETTLEMENT PROVIDER.

Sec. 3916.26. (A) THE SUPERINTENDENT OF INSURANCE, OR ANY PERSON APPOINTED BY THE SUPERINTENDENT, MAY EXAMINE, WHENEVER THE SUPERINTENDENT CONSIDERS IT REASONABLY NECESSARY TO PROTECT THE INTERESTS OF THE PUBLIC, THE BUSINESS AND AFFAIRS OF ANY VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER LICENSED UNDER THIS CHAPTER, OR ANY APPLICANT FOR A LICENSE. THE SUPERINTENDENT MAY ORDER ANY LICENSEE OR APPLICANT TO PRODUCE ANY RECORD, BOOK, FILE, OR OTHER INFORMATION REASONABLY NECESSARY TO ASCERTAIN WHETHER THE LICENSEE OR APPLICANT IS ACTING OR HAS ACTED IN VIOLATION OF THE LAW OR IN A MANNER OTHERWISE CONTRARY TO THE INTERESTS OF THE PUBLIC.

(B) THE LICENSEE OR APPLICANT SHALL PAY TO THE SUPERINTENDENT ALL COSTS, ASSESSMENTS, FORFEITURES, OR FINES INCURRED IN CONDUCTING AN EXAMINATION UNDER THIS SECTION. THE SUPERINTENDENT SHALL DEPOSIT THE MONEY INTO THE STATE TREASURY TO THE CREDIT OF THE DEPARTMENT OF INSURANCE OPERATING FUND CREATED BY SECTION 3901.021 of the Revised Code.

(C) THE WORK PAPERS OF THE SUPERINTENDENT, OR OF ANY PERSON APPOINTED BY THE SUPERINTENDENT, RESULTING FROM THE CONDUCT OF AN EXAMINATION MADE UNDER THIS SECTION, ARE CONFIDENTIAL AND ARE NOT A PUBLIC RECORD AS DEFINED IN SECTION 149.43 of the Revised Code. THE ORIGINAL WORK PAPERS AND ANY COPIES OF THEM ARE NOT SUBJECT TO SUBPOENA AND SHALL NOT BE MADE PUBLIC BY THE SUPERINTENDENT OR ANY OTHER PERSON. HOWEVER, THE ORIGINAL WORK PAPERS AND ANY COPIES OF THEM MAY BE RELEASED BY THE SUPERINTENDENT TO THE INSURANCE REGULATORY AUTHORITY OF ANY OTHER STATE IF THAT AUTHORITY AGREES TO MAINTAIN THE CONFIDENTIALITY OF THE WORK PAPERS OR COPIES AND IF THE WORK PAPERS AND COPIES ARE NOT PUBLIC RECORDS UNDER THE LAWS OF THAT STATE.

(D) ANY NAME, INDIVIDUAL IDENTIFICATION DATA, OR MEDICAL RECORD OF A VIATOR THAT IS OBTAINED BY OR DISCLOSED TO THE SUPERINTENDENT OR ANY OTHER PERSON IN THE COURSE OF AN EXAMINATION MADE UNDER THIS SECTION IS CONFIDENTIAL AND IS NOT A PUBLIC RECORD AS DEFINED IN SECTION 149.43 of the Revised Code. THE SUPERINTENDENT OR OTHER PERSON SHALL NOT DISCLOSE SUCH INFORMATION, EXCEPT IN THE FURTHERANCE OF THE SUPERINTENDENT'S OFFICIAL DUTIES, OR TO ANOTHER REGULATOR OR A LAW ENFORCEMENT AGENCY.

Sec. 3916.28. (A) THE SUPERINTENDENT OF INSURANCE MAY SUSPEND, REVOKE, OR REFUSE TO RENEW THE LICENSE OF A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER, IF THE SUPERINTENDENT FINDS THAT ANY OF THE FOLLOWING APPLY:

(1) THERE WAS A MATERIAL MISREPRESENTATION IN THE APPLICATION FOR THE LICENSE.

(2) THE LICENSEE OR ANY OFFICER, PARTNER, MEMBER, OR KEY MANAGEMENT PERSONNEL HAS BEEN CONVICTED OF FRAUDULENT OR DISHONEST PRACTICES, IS SUBJECT TO A FINAL ADMINISTRATIVE ACTION IN ANOTHER STATE, OR IS OTHERWISE SHOWN TO BE UNTRUSTWORTHY OR INCOMPETENT.

(3) THE VIATICAL SETTLEMENT PROVIDER MADE AN UNREASONABLE PAYMENT TO A VIATOR.

(4) THE LICENSEE HAS BEEN CONVICTED OF OR HAS PLEADED GUILTY OR NO CONTEST TO A FELONY, A CRIME INVOLVING MORAL TURPITUDE, OR A MISDEMEANOR INVOLVING FRAUD.

(5) THE VIATICAL SETTLEMENT PROVIDER HAS USED A VIATICAL SETTLEMENT CONTRACT FORM THAT HAS NOT BEEN APPROVED UNDER THIS CHAPTER.

(6) THE VIATICAL SETTLEMENT PROVIDER HAS FAILED TO HONOR CONTRACTUAL OBLIGATIONS SET OUT IN A VIATICAL SETTLEMENT CONTRACT.

(7) THE LICENSEE NO LONGER MEETS THE REQUIREMENTS FOR INITIAL LICENSURE.

(8) THE VIATICAL SETTLEMENT PROVIDER HAS ASSIGNED, TRANSFERRED, OR PLEDGED A VIATICATED POLICY TO A PERSON THAT IS NOT A VIATICAL SETTLEMENT PROVIDER LICENSED IN THIS STATE OR A FINANCING ENTITY.

(9) THE LICENSEE HAS VIOLATED ANY PROVISION OF THIS CHAPTER OR ANY RULE ADOPTED UNDER THIS CHAPTER.

(10) THE LICENSEE HAS COMMITTED ANY COERCIVE, FRAUDULENT, OR DISHONEST ACT, OR MADE ANY UNTRUE, DECEPTIVE, OR MISLEADING STATEMENT, IN CONNECTION WITH A VIATICAL TRANSACTION OR A PROPOSED VIATICAL TRANSACTION.

(B) BEFORE THE SUPERINTENDENT REFUSES TO ISSUE A LICENSE UNDER THIS CHAPTER, OR SUSPENDS, REVOKES, OR REFUSES TO RENEW THE LICENSE OF A VIATICAL SETTLEMENT PROVIDER, VIATICAL SETTLEMENT REPRESENTATIVE, OR VIATICAL SETTLEMENT BROKER, THE SUPERINTENDENT SHALL PROVIDE THE LICENSEE OR APPLICANT WITH NOTICE AND AN OPPORTUNITY FOR HEARING AS PROVIDED IN CHAPTER 119. of the Revised Code, EXCEPT AS FOLLOWS:

(1)(a) ANY NOTICE OF OPPORTUNITY FOR HEARING, THE HEARING OFFICER'S FINDINGS AND RECOMMENDATIONS, OR THE SUPERINTENDENT'S ORDER SHALL BE SERVED BY CERTIFIED MAIL AT THE LAST KNOWN ADDRESS OF THE LICENSEE OR APPLICANT. SERVICE SHALL BE EVIDENCED BY RETURN RECEIPT SIGNED BY ANY PERSON.

FOR PURPOSES OF THIS SECTION, THE "LAST KNOWN ADDRESS" IS THE ADDRESS THAT APPEARS IN THE LICENSING RECORDS OF THE DEPARTMENT OF INSURANCE.

(b) IF THE CERTIFIED MAIL ENVELOPE IS RETURNED WITH AN ENDORSEMENT SHOWING THAT SERVICE WAS REFUSED, OR THAT THE ENVELOPE WAS UNCLAIMED, THE NOTICE AND ALL SUBSEQUENT NOTICES REQUIRED BY CHAPTER 119. of the Revised Code MAY BE SERVED BY ORDINARY MAIL TO THE LAST KNOWN ADDRESS OF THE LICENSEE OR APPLICANT. THE MAILING SHALL BE EVIDENCED BY A CERTIFICATE OF MAILING. SERVICE IS DEEMED COMPLETE AS OF THE DATE OF SUCH CERTIFICATE PROVIDED THAT THE ORDINARY MAIL ENVELOPE IS NOT RETURNED BY THE POSTAL AUTHORITIES WITH AN ENDORSEMENT SHOWING FAILURE OF DELIVERY. THE TIME PERIOD IN WHICH TO REQUEST A HEARING, AS PROVIDED IN CHAPTER 119. of the Revised Code, BEGINS TO RUN ON THE DATE OF MAILING.

(c) IF SERVICE BY ORDINARY MAIL FAILS, THE SUPERINTENDENT MAY CAUSE A SUMMARY OF THE SUBSTANTIVE PROVISIONS OF THE NOTICE TO BE PUBLISHED ONCE A WEEK FOR THREE CONSECUTIVE WEEKS IN A NEWSPAPER OF GENERAL CIRCULATION IN THE COUNTY WHERE THE LAST KNOWN PLACE OF RESIDENCE OR BUSINESS OF THE LICENSEE OR APPLICANT IS LOCATED. THE NOTICE IS CONSIDERED SERVED ON THE DATE OF THE THIRD PUBLICATION.

(d) ANY NOTICE REQUIRED TO BE SERVED UNDER CHAPTER 119. of the Revised Code SHALL ALSO BE SERVED UPON THE ATTORNEY OF THE LICENSEE OR APPLICANT BY ORDINARY MAIL IF THE ATTORNEY HAS ENTERED AN APPEARANCE IN THE MATTER.

(e) THE SUPERINTENDENT MAY, AT ANY TIME, PERFECT SERVICE ON A LICENSEE OR APPLICANT BY PERSONAL DELIVERY OF THE NOTICE BY AN EMPLOYEE OF THE DEPARTMENT.

(f) NOTICES REGARDING THE SCHEDULING OF HEARINGS AND ALL OTHER MATTERS NOT DESCRIBED IN DIVISION (B)(1)(a) OF THIS SECTION SHALL BE SENT BY ORDINARY MAIL TO THE LICENSEE OR APPLICANT AND TO THE ATTORNEY OF THE LICENSEE OR APPLICANT.

(2) ANY SUBPOENA FOR THE APPEARANCE OF A WITNESS OR THE PRODUCTION OF DOCUMENTS OR OTHER EVIDENCE AT A HEARING, OR FOR THE PURPOSE OF TAKING TESTIMONY FOR USE AT A HEARING, SHALL BE SERVED BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, BY AN ATTORNEY OR BY AN EMPLOYEE OF THE DEPARTMENT DESIGNATED BY THE SUPERINTENDENT. SUCH SUBPOENAS SHALL BE ENFORCED IN THE MANNER PROVIDED IN SECTION 119.09 of the Revised Code. NOTHING IN THIS SECTION SHALL BE CONSTRUED AS LIMITING THE SUPERINTENDENT'S OTHER STATUTORY POWERS TO ISSUE SUBPOENAS.

Sec. 3916.30. (A) THE SUPERINTENDENT OF INSURANCE MAY ADOPT RULES IN ACCORDANCE WITH CHAPTER 119. OF THE REVISED CODE FOR PURPOSES OF IMPLEMENTING THIS CHAPTER, INCLUDING RULES GOVERNING THE RELATIONSHIP AND RESPONSIBILITIES OF BOTH INSURERS AND VIATICAL SETTLEMENT PROVIDERS, VIATICAL SETTLEMENT REPRESENTATIVES, AND VIATICAL SETTLEMENT BROKERS DURING THE VIATICATION OF A LIFE INSURANCE POLICY OR CERTIFICATE.

(B) THE SUPERINTENDENT MAY ALSO DO THE FOLLOWING:

(1) ESTABLISH STANDARDS FOR EVALUATING THE REASONABLENESS OF PAYMENTS UNDER VIATICAL SETTLEMENT CONTRACTS. THIS AUTHORITY INCLUDES, BUT IS NOT LIMITED TO, THE REGULATION OF DISCOUNT RATES USED TO DETERMINE THE AMOUNT PAID IN EXCHANGE FOR THE ASSIGNMENT, TRANSFER, SALE, DEVISE, OR BEQUEST OF A BENEFIT UNDER A LIFE INSURANCE POLICY OR CERTIFICATE.

(2) ESTABLISH APPROPRIATE LICENSING REQUIREMENTS AND STANDARDS FOR CONTINUED LICENSURE FOR VIATICAL SETTLEMENT PROVIDERS, VIATICAL SETTLEMENT REPRESENTATIVES, AND VIATICAL SETTLEMENT BROKERS;

(3) REQUIRE A BOND OR OTHER MECHANISM FOR ENSURING THE FINANCIAL ACCOUNTABILITY OF VIATICAL SETTLEMENT PROVIDERS.

Sec. 3916.32. (A) NO PERSON SHALL FAIL TO COMPLY WITH THIS CHAPTER.

(B) WHOEVER VIOLATES DIVISION (A) OF THIS SECTION IS DEEMED TO HAVE ENGAGED IN AN UNFAIR AND DECEPTIVE ACT OR PRACTICE IN THE BUSINESS OF INSURANCE UNDER SECTIONS 3901.19 TO 3901.26 OF THE REVISED CODE.

Sec. 3916.99. WHOEVER VIOLATES SECTION 3916.02 OF THE REVISED CODE IS GUILTY OF A FELONY OF THE THIRD DEGREE.


Section 2. That existing sections 1707.01, 1707.02, 1707.11, 1707.15, 1707.151, 1707.16, 1707.17, and 1707.23 and sections 1707.432, 1707.433, 1707.434, 1707.435, 1707.436, 1707.437, 1707.438, and 1707.439 of the Revised Code are hereby repealed.


Section 3. Sections 1 and 2 of this act shall take effect six months after the effective date of this act.


Section 4. Any person that, on the effective date of this act, transacts business in this state as a viatical settlement provider, viatical settlement representative, or viatical settlement broker may continue to do so pending approval of the person's application for a license, if the person applies for the license during the six-month period immediately following the effective date of this act.
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