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									                                First Regular Session
                            Sixty-fifth General Assembly
                            STATE OF COLORADO
                                                                            INTRODUCED

LLS NO. 05-0493.01 Thomas Morris                                      SENATE BILL05-107
                             SENATE SPONSORSHIP
 Owen,

                              HOUSE SPONSORSHIP
 Jahn,




Senate Committees                                House Committees
Business, Labor and Technology




                                      A BILL FOR AN ACT
101      CONCERNING THE AUTHORIZATION OF VIATICAL SETTLEMENTS, AND,
102             IN CONNECTION THEREWITH, PROTECTING THE RIGHTS OF A
103             LIFE INSURANCE POLICY OWNER TO SEEK A VIATICAL
104             SE T T L E M E NT ,      REGULATING             VIATICAL          SE T T L E M E NT
105             TRANSACTIONS, LICENSING VIATICAL SETTLEMENT PROVIDERS,
106             REQUIRING          ANTI - FRAUD          MEASURES ,          AND      SPECIFYING
107             PENALTIES.


                                            Bill Summary

               (Note: This summary applies to this bill as introduced and does
         not necessarily reflect any amendments that may be subsequently
         adopted.)

                Creates the "Viatical Settlements Act". Authorizes the owner of

             Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
                    Capital letters indicate new material to be added to existing statute.
                    Dashes through the words indicate deletions from existing statute.
    a life insurance policy (a "viator") to sell the viator's interest in the
    benefits payable upon the viator's death to a third party (a "viatical
    settlement provider") for an amount that is less than the expected death
    benefit pursuant to a viatical settlement contract. Regulates viatical
    settlement providers by:
                   Restricting the business of viatical settlements to licensed
                   life insurance producers;
                   Restricting the permissible terms of viatical settlement
                   contracts, mandating procedural safeguards applicable to
                   the negotiation of such contracts, and requiring viatical
                   settlement contracts to be filed with the commissioner of
                   insurance prior to use;
                   Requiring annual reporting and record retention;
                   Authorizing the commissioner to conduct examinations of
                   providers;
                   Specifying confidentiality, advertising, and disclosure
                   requirements;
                   Creates special protections for viators who are chronically
                   or terminally ill;
                   Prohibiting certain conflicts of interest and fraudulent acts
                   and requiring providers to adopt anti-fraud initiatives; and
                   Specifying licensing fees and penalties for violations,
                   including unfair trade practices.
           Authorizes the commissioner to adopt rules to implement the act.
    Specifies that the act does not preempt the "Colorado Securities Act",
    defines "viatical settlement investment" to exclude a transaction between
    a viator and a viatical settlement provider, and amends the definition of
    "security" to include viatical settlement investments.


1   Be it enacted by the General Assembly of the State of Colorado:
2          SECTION 1. Article 7 of title 10, Colorado Revised Statutes, is
3   amended BY THE ADDITION OF A NEW PART to read:
4                                    PART 6
5                         VIATICAL SETTLEMENTS
6          10-7-601. Short title. THIS PART 6 SHALL BE KNOWN AND MAY BE
7   CITED AS THE "VIATICAL SETTLEMENTS ACT".

8          10-7-602. Definitions. AS      USED IN THIS PART     6,   UNLESS THE

9   CONTEXT OTHERWISE REQUIRES:


                                        -2-                                   SB05-107
 1         (1)   "ADVERTISING"    MEANS ANY WRITTEN, ELECTRONIC, OR

 2   PRINTED COMMUNICATION OR ANY COMMUNICATION BY MEANS OF

 3   RECORDED    TELEPHONE    MESSAGES      OR   TRANSMITTED   ON   RADIO,

 4   TELEVISION, THE INTERNET, OR SIMILAR COMMUNICATIONS MEDIA,

 5   INCLUDING FILM STRIPS, MOTION PICTURES, AND VIDEOS, PUBLISHED,

 6   DISSEMINATED, CIRCULATED, OR PLACED DIRECTLY BEFORE THE PUBLIC IN

 7   THIS STATE FOR THE PURPOSE OF CREATING AN INTEREST IN OR INDUCING

 8   A PERSON TO SELL, ASSIGN, DEVISE, BEQUEST, OR TRANSFER THE DEATH

 9   BENEFIT OR OWNERSHIP OF A POLICY PURSUANT TO A VIATICAL

10   SETTLEMENT CONTRACT.

11         (2) "BUSINESS OF VIATICAL SETTLEMENTS" MEANS AN ACTIVITY
12   THAT INVOLVES, BUT IS NOT NECESSARILY LIMITED TO, THE OFFERING,

13   SOLICITATION ,   NEGOTIATION ,     PROCUREMENT ,    EFFECTUATION ,

14   PURCHASING,   INVESTING ,    FINANCING,     MONITORING,   TRACKING,

15   UNDERWRITING, SELLING, TRANSFERRING, ASSIGNING, PLEDGING, OR

16   HYPOTHECATING OF VIATICAL SETTLEMENT CONTRACTS.

17         (3) "CHRONICALLY      ILL", WITH REFERENCE TO AN INDIVIDUAL,

18   MEANS THAT THE INDIVIDUAL:

19         (a) SUFFERS FROM A DISEASE OR DISABILITY THAT PREVENTS THE
20   INDIVIDUAL FROM INDEPENDENTLY PERFORMING TWO OR MORE ROUTINE

21   BUT NECESSARY ACTIVITIES OF DAILY LIVING, WHICH ACTIVITIES INCLUDE,

22   WITHOUT LIMITATION, EATING, TOILETING, TRANSFERRING, BATHING,

23   DRESSING, OR CONTINENCE;

24         (b)   REQUIRES    SUBSTANTIAL SUPERVISION TO PROTECT THE

25   INDIVIDUAL FROM THREATS TO HEALTH AND SAFETY DUE TO SEVERE

26   COGNITIVE IMPAIRMENT; OR

27         (c) HAS A LEVEL OF DISABILITY SIMILAR TO THAT DESCRIBED IN


                                      -3-                               SB05-107
 1   PARAGRAPH (a) OF THIS SUBSECTION (3), AS DETERMINED BY THE FEDERAL

 2   DEPARTMENT OF HEALTH AND HUMAN SERVICES.

 3         (4) (a) "FINANCING ENTITY" MEANS AN UNDERWRITER, PLACEMENT
 4   AGENT, LENDER, PURCHASER OF SECURITIES, PURCHASER OF A POLICY OR

 5   CERTIFICATE FROM A VIATICAL SETTLEMENT PROVIDER,           CREDIT

 6   ENHANCER, OR ENTITY THAT HAS A DIRECT OWNERSHIP IN A POLICY THAT

 7   IS THE SUBJECT OF A VIATICAL SETTLEMENT CONTRACT, AND:

 8         (I) WHOSE PRINCIPAL ACTIVITY RELATED TO THE TRANSACTION IS
 9   PROVIDING FUNDS TO EFFECT THE VIATICAL SETTLEMENT OR PURCHASE OF

10   ONE OR MORE VIATICATED POLICIES; AND

11         (II) WHO HAS AN AGREEMENT      IN WRITING WITH ONE OR MORE

12   LICENSED VIATICAL SETTLEMENT PROVIDERS TO FINANCE THE ACQUISITION

13   OF VIATICAL SETTLEMENT CONTRACTS OR TO PROVIDE STOP-LOSS

14   INSURANCE.

15         (b) "FINANCING ENTITY" DOES NOT INCLUDE A NONACCREDITED
16   INVESTOR.

17         (5) "FRAUDULENT VIATICAL SETTLEMENT ACT" INCLUDES:
18         (a) AN ACT OR OMISSION BY A PERSON WHO, KNOWINGLY OR WITH
19   INTENT TO DEFRAUD, FOR THE PURPOSE OF DEPRIVING ANOTHER OF

20   PROPERTY OR FOR PECUNIARY GAIN, COMMITS OR ENGAGES IN, OR PERMITS

21   ITS EMPLOYEES OR AGENTS TO COMMIT OR ENGAGE IN, ACTS INCLUDING:

22         (I) PRESENTING, CAUSING TO BE PRESENTED, OR PREPARING WITH
23   KNOWLEDGE OR BELIEF THAT IT WILL BE PRESENTED TO OR BY A VIATICAL

24   SETTLEMENT PROVIDER, FINANCING ENTITY, INSURER, INSURANCE

25   PRODUCER, OR OTHER PERSON, FALSE MATERIAL INFORMATION, OR

26   CONCEALING MATERIAL INFORMATION, AS PART OF, IN SUPPORT OF, OR

27   CONCERNING A FACT MATERIAL TO ONE OR MORE OF THE FOLLOWING:



                                    -4-                              SB05-107
 1         (A)    AN    APPLICATION FOR THE ISSUANCE OF A VIATICAL

 2   SETTLEMENT CONTRACT OR POLICY;

 3         (B) THE UNDERWRITING OF A VIATICAL SETTLEMENT CONTRACT OR
 4   POLICY;

 5         (C) A CLAIM FOR PAYMENT OR BENEFIT PURSUANT TO A VIATICAL
 6   SETTLEMENT CONTRACT OR POLICY;

 7         (D) PREMIUMS PAID ON A POLICY;
 8         (E) PAYMENTS      AND CHANGES IN OWNERSHIP OR BENEFICIARY

 9   MADE IN ACCORDANCE WITH THE TERMS OF A VIATICAL SETTLEMENT

10   CONTRACT OR POLICY;

11         (F) THE REINSTATEMENT OR CONVERSION OF A POLICY;
12         (G) THE      SOLICITATION, OFFER, EFFECTUATION, OR SALE OF A

13   VIATICAL SETTLEMENT CONTRACT OR POLICY;

14         (H)    THE   ISSUANCE OF WRITTEN EVIDENCE OF A VIATICAL

15   SETTLEMENT CONTRACT OR POLICY; OR

16         (I) A FINANCING TRANSACTION;
17         (II) EMPLOYING ANY DEVICE, SCHEME, OR ARTIFICE TO DEFRAUD
18   RELATED TO VIATICATED POLICIES;

19         (b) IN   THE FURTHERANCE OF A FRAUD OR TO PREVENT THE

20   DETECTION OF A FRAUD A PERSON COMMITS OR PERMITS ITS EMPLOYEES OR

21   AGENTS TO:

22         (I) REMOVE, CONCEAL, ALTER, DESTROY, OR SEQUESTER FROM THE
23   COMMISSIONER THE ASSETS OR RECORDS OF A LICENSEE OR OTHER PERSON

24   ENGAGED IN THE BUSINESS OF VIATICAL SETTLEMENTS;

25         (II) MISREPRESENT OR CONCEAL THE FINANCIAL CONDITION OF A
26   LICENSEE, FINANCING ENTITY, INSURER, OR OTHER PERSON;

27         (III) TRANSACT     THE BUSINESS OF VIATICAL SETTLEMENTS IN



                                      -5-                            SB05-107
 1   VIOLATION OF LAWS REQUIRING A LICENSE, CERTIFICATE OF AUTHORITY,

 2   OR OTHER LEGAL AUTHORITY FOR THE TRANSACTION OF THE BUSINESS OF

 3   VIATICAL SETTLEMENTS; OR

 4         (IV) FILE   WITH THE COMMISSIONER OR THE CHIEF INSURANCE

 5   REGULATORY OFFICIAL OF ANOTHER JURISDICTION A DOCUMENT

 6   CONTAINING FALSE INFORMATION OR OTHERWISE CONCEAL INFORMATION

 7   ABOUT A MATERIAL FACT FROM THE COMMISSIONER;

 8         (c) EMBEZZLEMENT, THEFT, MISAPPROPRIATION, OR CONVERSION
 9   OF MONEYS, FUNDS, PREMIUMS, CREDITS, OR OTHER PROPERTY OF A

10   VIATICAL SETTLEMENT PROVIDER, LIFE INSURANCE PRODUCER, INSURER,

11   INSURED, VIATOR, POLICYOWNER, OR OTHER PERSON ENGAGED IN THE

12   BUSINESS OF VIATICAL SETTLEMENTS OR INSURANCE;

13         (d) RECKLESSLY ENTERING INTO, NEGOTIATING, OR OTHERWISE
14   DEALING IN A VIATICAL SETTLEMENT CONTRACT, THE SUBJECT OF WHICH

15   IS A POLICY THAT WAS OBTAINED BY PRESENTING FALSE INFORMATION

16   CONCERNING A FACT MATERIAL TO THE POLICY, OR BY CONCEALING, FOR

17   THE PURPOSE OF MISLEADING ANOTHER, INFORMATION CONCERNING A

18   FACT MATERIAL TO THE POLICY, WHERE THE VIATOR OR THE VIATOR'S

19   AGENT INTENDED TO DEFRAUD THE INSURANCE COMPANY THAT ISSUED THE

20   POLICY. "RECKLESSLY" MEANS ENGAGING IN THE CONDUCT IN CONSCIOUS

21   AND CLEARLY UNJUSTIFIABLE DISREGARD OF A SUBSTANTIAL LIKELIHOOD

22   OF THE EXISTENCE OF THE RELEVANT FACTS OR RISKS, WHEN SUCH

23   DISREGARD INVOLVES A GROSS DEVIATION FROM ACCEPTABLE STANDARDS

24   OF CONDUCT.

25         (e)   ATTEMPTING   TO COMMIT, ASSIST, AID OR ABET IN THE

26   COMMISSION OF, OR CONSPIRACY TO COMMIT, THE ACTS OR OMISSIONS

27   SPECIFIED IN THIS SUBSECTION (5).



                                         -6-                       SB05-107
1          (6) "LIFE INSURANCE PRODUCER" MEANS A PERSON LICENSED AS
2    A RESIDENT OR NONRESIDENT INSURANCE PRODUCER PURSUANT TO

3    ARTICLE   2 OF THIS TITLE WHO HAS RECEIVED QUALIFICATION   FOR LIFE

4    INSURANCE COVERAGE OR A LIFE LINE OF COVERAGE PURSUANT TO

5    SECTION 10-2-407 (1)   (a) .
6          (7) "NAIC" MEANS THE NATIONAL ASSOCIATION OF INSURANCE
 7   COMMISSIONERS OR ANY ANALOGOUS SUCCESSOR ORGANIZATION.

8          (8) "PERSON"     MEANS A NATURAL PERSON OR A LEGAL ENTITY

9    INCLUDING, BUT NOT LIMITED TO, AN INDIVIDUAL, PARTNERSHIP, LIMITED

10   LIABILITY COMPANY, ASSOCIATION, TRUST, OR CORPORATION.

11         (9) "POLICY" MEANS AN INDIVIDUAL OR GROUP POLICY, GROUP
12   CERTIFICATE, CONTRACT, OR ARRANGEMENT OF LIFE INSURANCE

13   AFFECTING THE RIGHTS OF A RESIDENT OF THIS STATE OR BEARING A

14   REASONABLE RELATION TO THIS STATE, REGARDLESS OF WHETHER

15   DELIVERED OR ISSUED FOR DELIVERY IN THIS STATE.

16         (10) "RELATED      PROVIDER TRUST" MEANS A TITLING TRUST OR

17   OTHER TRUST ESTABLISHED BY A LICENSED VIATICAL SETTLEMENT

18   PROVIDER OR A FINANCING ENTITY FOR THE SOLE PURPOSE OF HOLDING

19   THE OWNERSHIP OR BENEFICIAL INTEREST IN VIATICATED POLICIES IN

20   CONNECTION WITH A FINANCING TRANSACTION.    THE TRUST SHALL HAVE
21   A WRITTEN AGREEMENT WITH THE LICENSED VIATICAL SETTLEMENT

22   PROVIDER UNDER WHICH THE LICENSED VIATICAL SETTLEMENT PROVIDER

23   IS RESPONSIBLE FOR ENSURING COMPLIANCE WITH ALL STATUTORY AND

24   REGULATORY REQUIREMENTS AND UNDER WHICH THE TRUST AGREES TO

25   MAKE ALL RECORDS AND FILES RELATED TO VIATICAL SETTLEMENT

26   TRANSACTIONS AVAILABLE TO THE COMMISSIONER AS IF THOSE RECORDS

27   AND FILES WERE MAINTAINED DIRECTLY BY THE LICENSED VIATICAL



                                      -7-                             SB05-107
 1   SETTLEMENT PROVIDER.

 2         (11)    "SPECIAL   PURPOSE ENTITY" MEANS A CORPORATION,

 3   PARTNERSHIP, TRUST, LIMITED LIABILITY COMPANY, OR OTHER SIMILAR

 4   ENTITY FORMED ONLY TO PROVIDE, EITHER DIRECTLY OR INDIRECTLY,

 5   ACCESS TO INSTITUTIONAL CAPITAL MARKETS FOR A FINANCING ENTITY OR

 6   LICENSED VIATICAL SETTLEMENT PROVIDER.

 7         (12) "TERMINALLY ILL" MEANS HAVING AN ILLNESS OR SICKNESS
 8   THAT IS REASONABLY EXPECTED TO RESULT IN DEATH IN TWENTY-FOUR

 9   MONTHS OR LESS.

10         (13) "VIATICAL      SETTLEMENT CONTRACT" MEANS A WRITTEN

11   AGREEMENT ESTABLISHING THE TERMS UNDER WHICH COMPENSATION OR

12   ANYTHING OF VALUE IS PAID, WHICH COMPENSATION OR VALUE IS LESS

13   THAN THE EXPECTED DEATH BENEFIT OF THE POLICY, IN RETURN FOR THE

14   VIATOR'S ASSIGNMENT, TRANSFER, SALE, DEVISE, OR BEQUEST OF THE

15   DEATH BENEFIT OR OWNERSHIP OF ANY PORTION OF THE POLICY.

16   "VIATICAL SETTLEMENT CONTRACT" INCLUDES A CONTRACT FOR A LOAN
17   OR OTHER FINANCING TRANSACTION WITH A VIATOR SECURED PRIMARILY

18   BY AN INDIVIDUAL OR GROUP LIFE INSURANCE POLICY, OTHER THAN A

19   LOAN BY A LIFE INSURANCE COMPANY PURSUANT TO THE TERMS OF THE

20   POLICY, OR A LOAN SECURED BY THE CASH VALUE OF A POLICY.   "VIATICAL
21   SETTLEMENT CONTRACT" ALSO INCLUDES AN AGREEMENT WITH A VIATOR

22   TO TRANSFER OWNERSHIP OR CHANGE THE BENEFICIARY DESIGNATION AT

23   A LATER DATE REGARDLESS OF THE DATE THAT COMPENSATION IS PAID TO

24   THE VIATOR.   "VIATICAL   SETTLEMENT CONTRACT" DOES NOT MEAN A

25   WRITTEN AGREEMENT ENTERED INTO BETWEEN A VIATOR AND A PERSON

26   HAVING AN INSURABLE INTEREST IN THE INSURED'S LIFE.

27         (14) "VIATICAL SETTLEMENT PROVIDER" MEANS A PERSON, OTHER


                                      -8-                              SB05-107
 1   THAN A VIATOR, WHO ENTERS INTO OR EFFECTUATES A VIATICAL

 2   SETTLEMENT CONTRACT.    "VIATICAL SETTLEMENT PROVIDER" DOES NOT
 3   INCLUDE:

 4         (a) A BANK, SAVINGS BANK, SAVINGS AND LOAN     ASSOCIATION,

 5   CREDIT UNION, OR OTHER LICENSED LENDING INSTITUTION THAT TAKES AN

 6   ASSIGNMENT OF A POLICY AS COLLATERAL FOR A LOAN;

 7         (b) THE ISSUER OF A POLICY PROVIDING ACCELERATED BENEFITS
 8   PURSUANT TO THE POLICY;

 9         (c)   AN   AUTHORIZED OR ELIGIBLE INSURER THAT PROVIDES

10   STOP-LOSS COVERAGE TO A VIATICAL SETTLEMENT PROVIDER, FINANCING

11   ENTITY, SPECIAL PURPOSE ENTITY, OR RELATED PROVIDER TRUST;

12         (d) A NATURAL PERSON WHO ENTERS INTO OR EFFECTUATES NO
13   MORE THAN ONE AGREEMENT IN A CALENDAR YEAR FOR THE TRANSFER OF

14   POLICIES FOR ANY VALUE LESS THAN THE EXPECTED DEATH BENEFIT;

15         (e) A FINANCING ENTITY;
16         (f) A SPECIAL PURPOSE ENTITY;
17         (g) A RELATED PROVIDER TRUST; OR
18         (h) AN     ACCREDITED INVESTOR OR QUALIFIED INSTITUTIONAL

19   BUYER AS DEFINED, RESPECTIVELY, IN REGULATION D, RULE 501, OR RULE

20   144A OF THE FEDERAL "SECURITIES ACT OF 1933", AS AMENDED, WHO
21   PURCHASES A VIATICATED POLICY FROM A VIATICAL SETTLEMENT

22   PROVIDER.

23         (15) "VIATICATED    POLICY" MEANS A POLICY THAT HAS BEEN

24   ACQUIRED BY A VIATICAL SETTLEMENT PROVIDER PURSUANT TO A

25   VIATICAL SETTLEMENT CONTRACT.

26         (16) "VIATOR" MEANS THE OWNER OF A POLICY WHO IS A RESIDENT
27   OF THIS STATE AND WHO ENTERS OR SEEKS TO ENTER INTO A VIATICAL



                                     -9-                             SB05-107
 1   SETTLEMENT CONTRACT.   FOR THE PURPOSES OF THIS PART 6, A VIATOR IS
 2   NOT LIMITED TO AN OWNER OF A POLICY INSURING THE LIFE OF AN

 3   INDIVIDUAL WITH A TERMINAL OR CHRONIC ILLNESS OR CONDITION EXCEPT

 4   WHERE SPECIFICALLY ADDRESSED. IF THERE IS MORE THAN ONE OWNER ON

 5   A SINGLE POLICY AND THE OWNERS ARE RESIDENTS OF DIFFERENT STATES,

 6   THE TRANSACTION SHALL BE GOVERNED BY THE LAW OF THE STATE IN

 7   WHICH THE OWNER HAVING THE LARGEST PERCENTAGE OWNERSHIP

 8   RESIDES OR, IF THE OWNERS HOLD EQUAL OWNERSHIP, THE STATE OF

 9   RESIDENCE OF ONE OWNER AGREED UPON IN WRITING BY ALL OWNERS.

10   "VIATOR" DOES NOT INCLUDE:
11         (a) A LICENSEE AS PROVIDED BY THIS PART 6, INCLUDING A LIFE
12   INSURANCE PRODUCER;

13         (b) AN    ACCREDITED INVESTOR OR QUALIFIED INSTITUTIONAL

14   BUYER AS DEFINED, RESPECTIVELY, IN REGULATION D, RULE 501, OR RULE

15   144A OF THE FEDERAL "SECURITIES ACT OF 1933", AS AMENDED;
16         (c) A FINANCING ENTITY;
17         (d) A SPECIAL PURPOSE ENTITY; OR
18         (e) A RELATED PROVIDER TRUST.
19         10-7-603. Licensing. (1) (a) NO PERSON SHALL ACT ON BEHALF
20   OF A VIATOR OR OTHERWISE NEGOTIATE, AS DEFINED IN SECTION 10-2-103

21   (7.9), VIATICAL SETTLEMENT CONTRACTS BETWEEN A VIATOR AND ONE OR
22   MORE VIATICAL SETTLEMENT PROVIDERS UNLESS SUCH PERSON IS A LIFE

23   INSURANCE PRODUCER AND HAS BEEN LICENSED AS A RESIDENT PRODUCER

24   WITH A LIFE LINE OF AUTHORITY IN HIS OR HER HOME STATE FOR AT LEAST

25   ONE YEAR.

26         (b) NOT   LATER THAN THIRTY DAYS AFTER THE FIRST DAY OF

27   NEGOTIATING A VIATICAL SETTLEMENT ON BEHALF OF A VIATOR, THE LIFE



                                     -10-                             SB05-107
 1   INSURANCE PRODUCER SHALL NOTIFY THE COMMISSIONER OF THE

 2   ACTIVITY ON A FORM PRESCRIBED BY THE COMMISSIONER, AND SHALL PAY

 3   AN APPLICABLE FEE TO BE DETERMINED BY THE COMMISSIONER BY RULE.

 4   NOTIFICATION   SHALL INCLUDE AN ACKNOWLEDGMENT BY THE LIFE

 5   INSURANCE PRODUCER THAT HE OR SHE WILL OPERATE IN ACCORDANCE

 6   WITH THIS PART 6.

 7         (c) IRRESPECTIVE OF THE MANNER IN WHICH THE LIFE INSURANCE
 8   PRODUCER IS COMPENSATED, A LIFE INSURANCE PRODUCER IS DEEMED TO

 9   REPRESENT ONLY THE VIATOR AND OWES A FIDUCIARY DUTY TO THE

10   VIATOR TO ACT ACCORDING TO THE VIATOR'S INSTRUCTIONS AND IN THE

11   BEST INTERESTS OF THE VIATOR.

12         (d) NOTWITHSTANDING PARAGRAPH (a) OF THIS SUBSECTION (1),
13   A PERSON LICENSED AS AN ATTORNEY, CERTIFIED PUBLIC ACCOUNTANT, OR

14   FINANCIAL PLANNER ACCREDITED BY A NATIONALLY RECOGNIZED

15   ACCREDITATION AGENCY, WHO IS RETAINED TO REPRESENT THE VIATOR

16   AND WHOSE COMPENSATION IS NOT PAID DIRECTLY OR INDIRECTLY BY THE

17   VIATICAL SETTLEMENT PROVIDER MAY NEGOTIATE VIATICAL SETTLEMENT

18   CONTRACTS WITHOUT HAVING TO OBTAIN A LICENSE AS A LIFE INSURANCE

19   PRODUCER.

20         (2) (a) NO    PERSON MAY OPERATE AS A VIATICAL SETTLEMENT

21   PROVIDER WITHOUT FIRST OBTAINING A VIATICAL SETTLEMENT PROVIDER

22   LICENSE FROM THE COMMISSIONER.

23         (b) APPLICATION FOR A VIATICAL SETTLEMENT PROVIDER LICENSE
24   SHALL BE MADE TO THE COMMISSIONER ON A FORM PRESCRIBED BY THE

25   COMMISSIONER, AND AN APPLICATION SHALL BE ACCOMPANIED BY A FEE

26   TO BE DETERMINED BY THE COMMISSIONER BY RULE.

27         (c) A LICENSE MAY BE RENEWED FROM YEAR TO YEAR, ON THE


                                     -11-                           SB05-107
 1   ANNIVERSARY DATE OF INITIAL ISSUANCE, UPON PAYMENT OF AN ANNUAL

 2   RENEWAL FEE AS DETERMINED BY THE COMMISSIONER BY RULE.             FAILURE
 3   TO PAY THE FEE BY THE RENEWAL DATE SHALL RESULT IN EXPIRATION OF

 4   THE LICENSE.

 5         (d)    NOTWITHSTANDING        PARAGRAPHS   (b)   AND   (c)   OF THIS

 6   SUBSECTION     (2),   THE LICENSE AND RENEWAL FEES FOR A VIATICAL

 7   SETTLEMENT PROVIDER LICENSE SHALL NOT EXCEED THOSE ESTABLISHED

 8   FOR AN INSURER AS PROVIDED IN THIS TITLE.

 9         (e)   THE       APPLICANT FOR A VIATICAL SETTLEMENT PROVIDER

10   LICENSE SHALL PROVIDE INFORMATION ON FORMS PRESCRIBED BY THE

11   COMMISSIONER.         THE COMMISSIONER MAY, AT ANY TIME, REQUIRE THE
12   APPLICANT TO FULLY DISCLOSE THE IDENTITY OF ALL STOCKHOLDERS,

13   PARTNERS, OFFICERS, MEMBERS, AND EMPLOYEES, EXCEPT STOCKHOLDERS

14   OWNING FEWER THAN FIVE PERCENT OF THE SHARES OF AN APPLICANT

15   WHOSE SHARES ARE PUBLICLY TRADED, AND THE COMMISSIONER MAY

16   REFUSE TO ISSUE A LICENSE IN THE NAME OF A LEGAL ENTITY IF NOT

17   SATISFIED THAT ANY OFFICER, EMPLOYEE, STOCKHOLDER , PARTNER, OR

18   MEMBER OF THE ENTITY WHO MAY MATERIALLY INFLUENCE THE ENTITY'S

19   CONDUCT MEETS THE STANDARDS OF THIS ARTICLE.

20         (f)   A   LICENSE ISSUED TO A LEGAL ENTITY AUTHORIZES ALL

21   PARTNERS, OFFICERS, MEMBERS, AND DESIGNATED EMPLOYEES TO ACT AS

22   VIATICAL SETTLEMENT PROVIDERS, AS APPLICABLE, UNDER THE LICENSE,

23   IF ALL OF THOSE PERSONS ARE NAMED IN THE APPLICATION AND ANY

24   SUPPLEMENTS TO THE APPLICATION.

25         (g) UPON THE FILING OF AN APPLICATION AND THE PAYMENT OF
26   THE LICENSE FEE, THE COMMISSIONER SHALL MAKE AN INVESTIGATION OF

27   EACH APPLICANT AND ISSUE A LICENSE IF THE COMMISSIONER FINDS THAT



                                         -12-                                SB05-107
 1   THE APPLICANT:

 2         (I) HAS PROVIDED A DETAILED PLAN OF OPERATION;
 3         (II) IS COMPETENT AND TRUSTWORTHY AND INTENDS TO ACT IN
 4   GOOD FAITH IN THE CAPACITY INVOLVED BY THE LICENSE FOR WHICH AN

 5   APPLICATION WAS SUBMITTED;

 6         (III)    HAS   A GOOD BUSINESS REPUTATION AND HAS HAD

 7   EXPERIENCE, TRAINING, OR EDUCATION SO AS TO BE QUALIFIED IN THE

 8   BUSINESS FOR THE LICENSE FOR WHICH AN APPLICATION WAS SUBMITTED;

 9         (IV) IF    A LEGAL ENTITY, PROVIDES A CERTIFICATE OF GOOD

10   STANDING FROM THE STATE OF ITS DOMICILE; AND

11         (V)     HAS   PROVIDED AN ANTI-FRAUD PLAN THAT MEETS THE

12   REQUIREMENTS OF THIS PART 6.

13         (h)     THE   COMMISSIONER MAY NOT ISSUE A LICENSE TO A

14   NONRESIDENT APPLICANT UNLESS A WRITTEN DESIGNATION OF AN AGENT

15   FOR SERVICE OF PROCESS IS FILED AND MAINTAINED WITH THE

16   COMMISSIONER OR UNLESS THE APPLICANT HAS FILED WITH THE

17   COMMISSIONER THE APPLICANT'S WRITTEN, IRREVOCABLE CONSENT THAT

18   ANY ACTION AGAINST THE APPLICANT MAY BE COMMENCED AGAINST THE

19   APPLICANT BY SERVICE OF PROCESS ON THE COMMISSIONER.

20         (i) A VIATICAL SETTLEMENT PROVIDER      SHALL PROVIDE TO THE

21   COMMISSIONER NEW OR REVISED INFORMATION ABOUT OFFICERS,

22   STOCKHOLDERS WHO OWN TEN PERCENT OR MORE OF THE PROVIDER'S

23   STOCK, AND ALL PARTNERS, DIRECTORS, MEMBERS, AND DESIGNATED

24   EMPLOYEES WITHIN THIRTY DAYS AFTER THE CHANGE.

25         10-7-604. Licensure - refusal to issue - suspension - revocation
26   - refusal to renew. (1) THE    COMMISSIONER MAY REFUSE TO ISSUE,

27   SUSPEND, REVOKE, OR REFUSE TO RENEW THE LICENSE OF A VIATICAL



                                     -13-                                SB05-107
1    SETTLEMENT PROVIDER IF THE COMMISSIONER FINDS THAT:

 2         (a)   THERE    WAS ANY MATERIAL MISREPRESENTATION IN THE

 3   APPLICATION FOR THE LICENSE;

 4         (b) THE LICENSEE OR ANY OF ITS OFFICERS, PARTNERS, MEMBERS,
 5   OR KEY MANAGEMENT PERSONNEL HAS BEEN CONVICTED OF FRAUDULENT

 6   OR DISHONEST PRACTICES, IS SUBJECT TO A FINAL ADMINISTRATIVE

 7   ACTION, OR IS OTHERWISE SHOWN TO BE UNTRUSTWORTHY OR

 8   INCOMPETENT;

 9         (c) THE LICENSEE DEMONSTRATES A PATTERN OF UNREASONABLE
10   PAYMENTS TO VIATORS;

11         (d) THE LICENSEE OR ANY OF ITS OFFICERS, PARTNERS, MEMBERS,
12   OR KEY MANAGEMENT PERSONNEL HAS BEEN FOUND GUILTY OF, OR HAS

13   PLEADED GUILTY OR NOLO CONTENDERE TO, ANY FELONY, OR TO A

14   MISDEMEANOR INVOLVING FRAUD OR MORAL TURPITUDE, REGARDLESS OF

15   WHETHER A JUDGMENT OR CONVICTION HAS BEEN ENTERED BY THE COURT;

16         (e) THE LICENSEE HAS ENTERED INTO ANY VIATICAL SETTLEMENT
17   CONTRACT THAT HAS NOT BEEN APPROVED PURSUANT TO THIS PART 6;

18         (f)   THE   LICENSEE HAS FAILED TO HONOR CONTRACTUAL

19   OBLIGATIONS SET OUT IN A VIATICAL SETTLEMENT CONTRACT;

20         (g) THE   LICENSEE NO LONGER MEETS THE REQUIREMENTS FOR

21   INITIAL LICENSURE;

22         (h) THE LICENSEE HAS ASSIGNED, TRANSFERRED, OR PLEDGED A
23   VIATICATED POLICY TO A PERSON OTHER THAN A VIATICAL SETTLEMENT

24   PROVIDER LICENSED IN THIS STATE; AN ACCREDITED INVESTOR OR

25   QUALIFIED INSTITUTIONAL BUYER AS DEFINED, RESPECTIVELY, IN

26   REGULATION D, RULE 501, OR RULE 144A OF THE FEDERAL "SECURITIES

27   ACT OF 1933", AS AMENDED; A FINANCING ENTITY; A SPECIAL PURPOSE


                                    -14-                            SB05-107
 1   ENTITY; OR A RELATED PROVIDER TRUST; OR

 2         (i)   THE   APPLICANT OR LICENSEE OR ANY OF ITS OFFICERS,

 3   PARTNERS, MEMBERS, OR KEY MANAGEMENT PERSONNEL, OR ANY LIFE

 4   INSURANCE PRODUCER ACTING ON BEHALF OF THE APPLICANT OR

 5   LICENSEE, HAS VIOLATED THIS PART 6.

 6         (2) THE COMMISSIONER MAY SUSPEND, REVOKE,       OR REFUSE TO

 7   RENEW THE LICENSE OF A LIFE INSURANCE PRODUCER IF THE

 8   COMMISSIONER FINDS THAT SUCH LIFE INSURANCE PRODUCER HAS

 9   VIOLATED THIS PART 6.

10         (3) IF   THE COMMISSIONER DENIES A LICENSE APPLICATION OR

11   SUSPENDS, REVOKES, OR REFUSES TO RENEW THE LICENSE OF A VIATICAL

12   SETTLEMENT PROVIDER, OR SUSPENDS, REVOKES, OR REFUSES TO RENEW

13   THE LICENSE OF A LIFE INSURANCE PRODUCER, THE COMMISSIONER SHALL

14   CONDUCT A HEARING IN ACCORDANCE WITH THE "STATE ADMINISTRATIVE

15   PROCEDURE ACT", ARTICLE 4 OF TITLE 24, C.R.S.
16         10-7-605. Forms approval. A PERSON MAY NOT USE A VIATICAL
17   SETTLEMENT CONTRACT OR PROVIDE TO A VIATOR A DISCLOSURE

18   STATEMENT FORM IN THIS STATE UNLESS SUCH CONTRACT OR FORM IS

19   FIRST FILED WITH AND APPROVED BY THE COMMISSIONER.            ANY
20   SETTLEMENT CONTRACT FORM OR DISCLOSURE FORM FILED WITH THE

21   COMMISSIONER SHALL BE DEEMED APPROVED IF IT HAS NOT BEEN

22   DISAPPROVED WITHIN SIXTY DAYS AFTER THE FILING.   THE COMMISSIONER
23   SHALL DISAPPROVE A VIATICAL SETTLEMENT CONTRACT FORM OR

24   DISCLOSURE STATEMENT FORM IF, IN THE COMMISSIONER'S OPINION, THE

25   CONTRACT OR PROVISIONS CONTAINED IN IT ARE UNREASONABLE,

26   CONTRARY TO THE INTERESTS OF THE PUBLIC, OR MISLEADING OR UNFAIR

27   TO THE VIATOR.



                                    -15-                             SB05-107
 1         10-7-606. Annual reports. (1) EACH        VIATICAL SETTLEMENT

 2   PROVIDER SHALL FILE WITH THE COMMISSIONER BY       MARCH 1 OF EACH
 3   YEAR AN ANNUAL STATEMENT CONTAINING SUCH INFORMATION AS THE

 4   COMMISSIONER PRESCRIBES BY RULE.      THIS INFORMATION IS LIMITED TO
 5   ONLY THOSE TRANSACTIONS IN WHICH THE VIATOR IS A RESIDENT OF THIS

 6   STATE AND DOES NOT INCLUDE INDIVIDUAL TRANSACTION DATA

 7   REGARDING THE BUSINESS OF VIATICAL SETTLEMENTS OR DATA THAT

 8   COMPROMISES THE PRIVACY OF PERSONAL, FINANCIAL, OR HEALTH

 9   INFORMATION OF THE VIATOR OR INSURED.

10         (2) EXCEPT AS OTHERWISE ALLOWED OR        REQUIRED BY LAW, A

11   VIATICAL    SETTLEMENT   PROVIDER ,    LIFE   INSURANCE   PRODUCER ,

12   INFORMATION BUREAU, RATING AGENCY OR COMPANY, OR OTHER PERSON

13   WITH ACTUAL KNOWLEDGE OF A VIATOR OR INSURED'S IDENTITY MAY NOT

14   DISCLOSE THAT IDENTITY AS A VIATOR OR INSURED OR THE VIATOR'S OR

15   INSURED'S FINANCIAL OR MEDICAL INFORMATION TO ANOTHER PERSON

16   UNLESS THE DISCLOSURE IS:

17         (a) (I) NECESSARY TO EFFECT A VIATICAL SETTLEMENT CONTRACT
18   BETWEEN THE VIATOR AND A VIATICAL SETTLEMENT PROVIDER; AND

19         (II) THE VIATOR OR INSURED OR BOTH, AS MAY BE REQUIRED, HAVE
20   PROVIDED PRIOR WRITTEN CONSENT TO THE DISCLOSURE;

21         (b)    PROVIDED    IN RESPONSE TO AN INVESTIGATION OR

22   EXAMINATION BY THE COMMISSIONER OR ANOTHER GOVERNMENTAL

23   OFFICER OR AGENCY OR PURSUANT TO THIS ARTICLE;

24         (c) A TERM OF OR CONDITION TO THE TRANSFER OF A POLICY BY
25   ONE VIATICAL SETTLEMENT PROVIDER TO ANOTHER VIATICAL SETTLEMENT

26   PROVIDER;

27         (d)   NECESSARY    TO PERMIT A FINANCING ENTITY, RELATED



                                    -16-                               SB05-107
 1   PROVIDER TRUST, OR SPECIAL PURPOSE ENTITY TO FINANCE THE PURCHASE

 2   OF POLICIES BY A VIATICAL SETTLEMENT PROVIDER AND THE VIATOR AND

 3   INSURED HAVE PROVIDED PRIOR WRITTEN CONSENT TO THE DISCLOSURE;

 4          (e) NECESSARY TO ALLOW THE VIATICAL SETTLEMENT PROVIDER
 5   OR ITS AUTHORIZED REPRESENTATIVE TO MAKE CONTACTS FOR THE

 6   PURPOSE OF DETERMINING HEALTH STATUS; OR

 7          (f) REQUIRED TO PURCHASE STOP LOSS-COVERAGE.
8           10-7-607. Examinations. (1) Authority, scope, and scheduling
 9   of examinations.      (a)   THE   COMMISSIONER MAY CONDUCT AN

10   EXAMINATION UNDER THIS PART       6   OF A LICENSEE AS OFTEN AS THE

11   COMMISSIONER IN HIS OR HER SOLE DISCRETION DEEMS APPROPRIATE.

12          (b)   FOR   PURPOSES OF COMPLETING AN EXAMINATION OF A

13   LICENSEE UNDER THIS PART    6,   THE COMMISSIONER MAY EXAMINE OR

14   INVESTIGATE ANY PERSON, OR THE BUSINESS OF ANY PERSON, IN SO FAR AS

15   THE EXAMINATION OR INVESTIGATION IS, IN THE SOLE DISCRETION OF THE

16   COMMISSIONER, NECESSARY OR MATERIAL TO THE EXAMINATION OF THE

17   LICENSEE.

18          (c) IN   LIEU OF AN EXAMINATION UNDER THIS PART     6   OF ANY

19   FOREIGN OR ALIEN LICENSEE LICENSED IN THIS STATE, THE COMMISSIONER

20   MAY, AT THE COMMISSIONER'S DISCRETION, ACCEPT AN EXAMINATION

21   REPORT ON THE LICENSEE AS PREPARED BY THE COMMISSIONER FOR THE

22   LICENSEE'S STATE OF DOMICILE OR PORT-OF-ENTRY STATE.

23          (2) Record retention requirements. (a) A PERSON REQUIRED TO
24   BE LICENSED UNDER THIS PART 6 SHALL FOR FIVE YEARS RETAIN COPIES OF

25   ALL:

26          (I)      PROPOSED,   OFFERED,     OR   EXECUTED   CONTRACTS,

27   UNDERWRITING DOCUMENTS, POLICY FORMS, AND APPLICATIONS FROM THE



                                       -17-                             SB05-107
 1   DATE OF THE PROPOSAL, OFFER, OR EXECUTION OF THE CONTRACT,

 2   WHICHEVER IS LATER;

 3         (II) CHECKS, DRAFTS, OR OTHER EVIDENCE AND DOCUMENTATION
 4   RELATED TO THE PAYMENT, TRANSFER, DEPOSIT, OR RELEASE OF MONEYS

 5   FROM THE DATE OF THE TRANSACTION; AND

 6         (III)   OTHER   RECORDS AND DOCUMENTS RELATED TO THE

 7   REQUIREMENTS OF THIS PART 6.

 8         (b) THIS SECTION DOES NOT RELIEVE A PERSON OF THE OBLIGATION
 9   TO PRODUCE THE DOCUMENTS LISTED IN PARAGRAPH          (a)   OF THIS

10   SUBSECTION (2) TO THE COMMISSIONER AFTER THE RETENTION PERIOD HAS

11   EXPIRED IF THE PERSON HAS RETAINED THE DOCUMENTS.

12         (c) RECORDS REQUIRED TO BE RETAINED BY THIS SUBSECTION (2)
13   SHALL BE LEGIBLE AND COMPLETE AND MAY BE RETAINED IN PAPER ,

14   PHOTOGRAPH, MICROPROCESS, MAGNETIC, MECHANICAL, OR ELECTRONIC

15   MEDIA, OR BY ANY PROCESS THAT ACCURATELY REPRODUCES OR FORMS

16   A DURABLE MEDIUM FOR THE REPRODUCTION OF A RECORD.

17         (3) Conduct of examinations. (a) UPON DETERMINING THAT AN
18   EXAMINATION SHOULD BE CONDUCTED, THE COMMISSIONER SHALL ISSUE

19   AN EXAMINATION WARRANT APPOINTING ONE OR MORE EXAMINERS TO

20   PERFORM THE EXAMINATION AND INSTRUCTING THE EXAMINER AS TO THE

21   SCOPE OF THE EXAMINATION.    IN CONDUCTING THE EXAMINATION,    THE

22   EXAMINER SHALL OBSERVE THOSE GUIDELINES AND PROCEDURES SET

23   FORTH IN THE EXAMINER'S HANDBOOK ADOPTED BY THE       NAIC. THE
24   COMMISSIONER MAY ALSO EMPLOY SUCH OTHER GUIDELINES OR

25   PROCEDURES AS THE COMMISSIONER MAY DEEM APPROPRIATE.

26         (b) EVERY LICENSEE    OR PERSON FROM WHOM INFORMATION IS

27   SOUGHT, AND ITS OFFICERS, DIRECTORS, AND AGENTS, SHALL PROVIDE TO



                                    -18-                              SB05-107
 1   THE EXAMINERS TIMELY, CONVENIENT, AND FREE ACCESS AT ALL

 2   REASONABLE HOURS AT ITS OFFICES TO ALL BOOKS, RECORDS, ACCOUNTS,

 3   PAPERS, DOCUMENTS, ASSETS, AND COMPUTER OR OTHER RECORDINGS

 4   RELATING TO THE PROPERTY, ASSETS, BUSINESS, AND AFFAIRS OF THE

 5   LICENSEE BEING EXAMINED.   THE OFFICERS, DIRECTORS, EMPLOYEES, AND
 6   AGENTS OF THE LICENSEE OR PERSON SHALL FACILITATE THE EXAMINATION

 7   AND AID IN THE EXAMINATION SO FAR AS IT IS IN THEIR POWER TO DO SO.

 8   THE REFUSAL OF A LICENSEE, BY ITS OFFICERS, DIRECTORS, EMPLOYEES,
 9   OR AGENTS, TO SUBMIT TO EXAMINATION OR TO COMPLY WITH ANY

10   REASONABLE WRITTEN REQUEST OF THE COMMISSIONER SHALL BE

11   GROUNDS FOR SUSPENSION, REFUSAL, OR NONRENEWAL OF ANY LICENSE

12   OR AUTHORITY HELD BY THE LICENSEE TO ENGAGE IN THE VIATICAL

13   SETTLEMENT     BUSINESS   OR   OTHER   BUSINESS   SUBJECT    TO    THE

14   COMMISSIONER'S JURISDICTION.    ANY    PROCEEDINGS FOR SUSPENSION,

15   REVOCATION, OR REFUSAL OF ANY LICENSE OR AUTHORITY SHALL BE

16   CONDUCTED PURSUANT TO THE      "STATE ADMINISTRATIVE PROCEDURE
17   ACT", ARTICLE 4 OF TITLE 24, C.R.S.
18         (c)    THE   COMMISSIONER SHALL HAVE THE POWER TO ISSUE

19   SUBPOENAS, TO ADMINISTER OATHS, AND TO EXAMINE UNDER OATH ANY

20   PERSON AS TO ANY MATTER PERTINENT TO THE EXAMINATION.       UPON THE
21   FAILURE OR REFUSAL OF A PERSON TO OBEY A SUBPOENA, THE

22   COMMISSIONER MAY PETITION A COURT OF COMPETENT JURISDICTION AND,

23   UPON PROPER SHOWING, THE COURT MAY ENTER AN ORDER COMPELLING

24   THE WITNESS TO APPEAR AND TESTIFY OR PRODUCE DOCUMENTARY

25   EVIDENCE.   FAILURE TO OBEY THE COURT ORDER SHALL BE PUNISHABLE AS
26   CONTEMPT OF COURT.

27         (d) WHEN     MAKING AN EXAMINATION UNDER THIS PART      6,   THE



                                     -19-                                SB05-107
 1   COMMISSIONER MAY RETAIN ATTORNEYS, APPRAISERS, INDEPENDENT

 2   ACTUARIES, INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, OR OTHER

 3   PROFESSIONALS AND SPECIALISTS AS EXAMINERS.   THE REASONABLE COST
 4   OF SUCH EXAMINERS' SERVICES SHALL BE BORNE BY THE LICENSEE THAT

 5   IS THE SUBJECT OF THE EXAMINATION.

 6         (e) NOTHING CONTAINED IN THIS PART 6 SHALL BE CONSTRUED TO
 7   LIMIT THE COMMISSIONER'S AUTHORITY TO TERMINATE OR SUSPEND AN

 8   EXAMINATION IN ORDER TO PURSUE OTHER LEGAL OR REGULATORY ACTION

 9   PURSUANT TO THE INSURANCE LAWS OF THIS STATE.    FINDINGS OF FACT
10   AND CONCLUSIONS MADE PURSUANT TO ANY EXAMINATION SHALL BE

11   PRIMA FACIE EVIDENCE IN ANY LEGAL OR REGULATORY ACTION.

12         (f) NOTHING CONTAINED IN THIS PART 6 SHALL BE CONSTRUED TO
13   LIMIT THE COMMISSIONER'S AUTHORITY TO USE AND, IF APPROPRIATE, TO

14   MAKE PUBLIC ANY FINAL OR PRELIMINARY EXAMINATION REPORT, ANY

15   EXAMINER OR LICENSEE WORKPAPERS OR OTHER DOCUMENTS, OR ANY

16   OTHER INFORMATION DISCOVERED OR DEVELOPED DURING THE COURSE OF

17   ANY EXAMINATION IN THE FURTHERANCE OF ANY LEGAL OR REGULATORY

18   ACTION THAT THE COMMISSIONER MAY, IN HIS OR HER SOLE DISCRETION,

19   DEEM APPROPRIATE.

20         (g) THE   LICENSEE SHALL PAY THE CHARGES INCURRED IN THE

21   EXAMINATION, INCLUDING THE EXPENSES OF THE COMMISSIONER OR THE

22   COMMISSIONER'S DESIGNEE AND THE EXPENSES AND COMPENSATION OF

23   THE COMMISSIONER'S EXAMINERS AND ASSISTANTS.        IF   A LICENSEE

24   BELIEVES THAT THE FEES ASSESSED ARE UNREASONABLE IN RELATION TO

25   THE EXAMINATION PERFORMED, THE LICENSEE MAY APPEAL THE

26   ASSESSMENTS TO AND SEEK JUDICIAL REVIEW BY THE DISTRICT COURT IN

27   AND FOR THE CITY AND COUNTY OF   DENVER PURSUANT TO THE "STATE


                                   -20-                               SB05-107
 1   ADMINISTRATIVE PROCEDURE ACT", ARTICLE 4 OF TITLE 24, C.R.S. IF NO
 2   HEARING IS REQUESTED OR, IF AFTER A HEARING AND APPEAL PROCESS, THE

 3   LICENSEE REFUSES OR FAILS TO PAY, THE COMMISSIONER OR HIS DESIGNEE

 4   SHALL PROMPTLY INSTITUTE A CIVIL ACTION AGAINST THE LICENSEE TO

5    RECOVER THE EXPENSES OF EXAMINATION.

 6         (4) Examination reports. (a) EXAMINATION REPORTS       SHALL

 7   CONSIST ONLY OF FACTS APPEARING UPON THE BOOKS, RECORDS, OR

 8   OTHER DOCUMENTS OF THE LICENSEE, ITS AGENTS, OR OTHER PERSONS

 9   EXAMINED, OR AS ASCERTAINED FROM THE TESTIMONY OF ITS OFFICERS OR

10   AGENTS OR OTHER PERSONS EXAMINED CONCERNING ITS AFFAIRS, AND

11   SUCH CONCLUSIONS AND RECOMMENDATIONS AS THE EXAMINERS FIND

12   REASONABLY WARRANTED FROM THE FACTS.

13         (b) NO LATER THAN SIXTY DAYS FOLLOWING COMPLETION OF THE
14   EXAMINATION, THE EXAMINER IN CHARGE SHALL FILE WITH THE

15   COMMISSIONER A VERIFIED WRITTEN REPORT OF EXAMINATION UNDER

16   OATH. UPON RECEIPT OF THE VERIFIED REPORT, THE COMMISSIONER SHALL

17   TRANSMIT THE REPORT TO THE LICENSEE EXAMINED, TOGETHER WITH A

18   NOTICE THAT SHALL AFFORD THE LICENSEE EXAMINED A REASONABLE

19   OPPORTUNITY OF NOT MORE THAN THIRTY DAYS TO MAKE A WRITTEN

20   SUBMISSION OR REBUTTAL WITH RESPECT TO ANY MATTERS CONTAINED IN

21   THE EXAMINATION REPORT.

22         (c) WITHIN THIRTY DAYS AFTER THE END OF THE PERIOD ALLOWED
23   FOR THE RECEIPT OF WRITTEN SUBMISSIONS OR REBUTTALS, THE

24   COMMISSIONER SHALL FULLY CONSIDER AND REVIEW THE REPORT,

25   TOGETHER WITH ANY WRITTEN SUBMISSIONS OR REBUTTALS AND ANY

26   RELEVANT PORTIONS OF THE EXAMINER'S WORKPAPERS, AND ENTER AN

27   ORDER:



                                    -21-                              SB05-107
 1         (I) ADOPTING      THE EXAMINATION REPORT AS FILED OR WITH

 2   MODIFICATION OR CORRECTIONS. IF THE EXAMINATION REPORT REVEALS

 3   THAT THE LICENSEE IS OPERATING IN VIOLATION OF ANY LAW, RULE, OR

 4   PRIOR ORDER OF THE COMMISSIONER, THE COMMISSIONER MAY ORDER THE

 5   LICENSEE TO TAKE ANY ACTION THE COMMISSIONER CONSIDERS

6    NECESSARY AND APPROPRIATE TO CURE THE VIOLATION.

 7         (II) REJECTING THE EXAMINATION REPORT WITH DIRECTIONS TO
 8   THE EXAMINERS TO REOPEN THE EXAMINATION FOR PURPOSES OF

 9   OBTAINING ADDITIONAL DATA, DOCUMENTATION, OR INFORMATION AND

10   REFILING; OR

11         (III) CALLING     FOR AN INVESTIGATORY HEARING WITH NO LESS

12   THAN TWENTY DAYS' NOTICE TO THE LICENSEE FOR PURPOSES OF

13   OBTAINING ADDITIONAL DOCUMENTATION, DATA, INFORMATION, AND

14   TESTIMONY.

15         (d) ALL    ORDERS ENTERED PURSUANT TO THIS SUBSECTION    (4)
16   SHALL BE ACCOMPANIED BY FINDINGS AND CONCLUSIONS RESULTING FROM

17   THE COMMISSIONER'S CONSIDERATION AND REVIEW OF THE EXAMINATION

18   REPORT, THE RELEVANT EXAMINER WORKPAPERS, AND ANY WRITTEN

19   SUBMISSIONS OR REBUTTALS.       ANY     EXAMINATION WARRANT ISSUED

20   PURSUANT TO PARAGRAPH (a) OF SUBSECTION (3) OF THIS SECTION SHALL

21   BE CONSIDERED A FINAL ADMINISTRATIVE DECISION, REVIEW OF WHICH

22   MAY BE SOUGHT IN THE DISTRICT COURT IN AND FOR THE CITY AND

23   COUNTY OF      DENVER    PURSUANT TO THE     "STATE ADMINISTRATIVE
24   PROCEDURE ACT", ARTICLE 4 OF TITLE 24, C.R.S., AND SHALL BE SERVED
25   UPON THE LICENSEE BY CERTIFIED MAIL TOGETHER WITH A COPY OF THE

26   ADOPTED EXAMINATION REPORT.        WITHIN    THIRTY DAYS AFTER THE

27   ISSUANCE OF THE ADOPTED REPORT, THE LICENSEE SHALL FILE AFFIDAVITS



                                      -22-                           SB05-107
 1   EXECUTED BY EACH OF ITS DIRECTORS STATING UNDER OATH THAT THEY

 2   HAVE RECEIVED A COPY OF THE ADOPTED REPORT AND RELATED ORDERS.

 3           (e) HEARINGS CONDUCTED PURSUANT TO THIS SECTION SHALL BE
 4   SUBJECT TO THE FOLLOWING REQUIREMENTS:

 5           (I) ANY HEARING CONDUCTED PURSUANT TO THIS SECTION BY THE
 6   COMMISSIONER OR THE COMMISSIONER'S AUTHORIZED REPRESENTATIVE

 7   SHALL    BE   CONDUCTED   AS   A   NONADVERSARIAL,   CONFIDENTIAL

 8   INVESTIGATORY PROCEEDING AS NECESSARY FOR THE RESOLUTION OF ANY

 9   INCONSISTENCIES, DISCREPANCIES, OR DISPUTED ISSUES APPARENT UPON

10   THE FACE OF THE FILED EXAMINATION REPORT OR RAISED BY OR AS A

11   RESULT OF THE COMMISSIONER'S REVIEW OF RELEVANT WORKPAPERS OR

12   BY THE WRITTEN SUBMISSION OR REBUTTAL OF THE LICENSEE.    WITHIN
13   TWENTY DAYS AFTER THE CONCLUSION OF ANY HEARING, THE

14   COMMISSIONER SHALL ENTER AN ORDER PURSUANT TO SUBPARAGRAPH (I)

15   OF PARAGRAPH   (c) OF THIS SUBSECTION (4).
16           (II) THE COMMISSIONER SHALL NOT APPOINT AN EXAMINER AS AN
17   AUTHORIZED REPRESENTATIVE TO CONDUCT THE HEARING.    THE HEARING
18   SHALL PROCEED EXPEDITIOUSLY, WITH DISCOVERY BY THE LICENSEE

19   LIMITED TO THE EXAMINER'S WORKPAPERS THAT TEND TO SUBSTANTIATE

20   ANY ASSERTIONS SET FORTH IN ANY WRITTEN SUBMISSION OR REBUTTAL.

21   THE COMMISSIONER OR THE COMMISSIONER'S REPRESENTATIVE MAY ISSUE
22   SUBPOENAS FOR THE ATTENDANCE OF ANY WITNESSES OR THE PRODUCTION

23   OF ANY DOCUMENTS CONSIDERED RELEVANT TO THE INVESTIGATION,

24   WHETHER UNDER THE CONTROL OF THE COMMISSIONER, THE COMPANY, OR

25   OTHER PERSONS.   THE DOCUMENTS PRODUCED SHALL BE INCLUDED IN THE
26   RECORD, AND TESTIMONY TAKEN BY THE COMMISSIONER OR THE

27   COMMISSIONER'S REPRESENTATIVE SHALL BE UNDER OATH AND PRESERVED



                                     -23-                           SB05-107
1    FOR THE RECORD.   NOTHING CONTAINED IN THIS SECTION SHALL REQUIRE
2    THE COMMISSIONER TO DISCLOSE ANY INFORMATION OR RECORDS THAT

3    WOULD INDICATE OR SHOW THE EXISTENCE OR CONTENT OF ANY

 4   INVESTIGATION OR ACTIVITY OF A CRIMINAL JUSTICE AGENCY.

5          (III) THE HEARING SHALL PROCEED WITH THE COMMISSIONER OR
6    THE COMMISSIONER'S REPRESENTATIVE POSING QUESTIONS TO THE

7    PERSONS SUBPOENAED.    THEREAFTER, THE LICENSEE AND THE DIVISION
8    MAY   PRESENT     TESTIMONY   RELEVANT    TO    THE    INVESTIGATION.

9    CROSS-EXAMINATION MAY BE CONDUCTED ONLY BY THE COMMISSIONER
10   OR THE COMMISSIONER'S REPRESENTATIVE.         THE   LICENSEE AND THE

11   COMMISSIONER SHALL BE PERMITTED TO MAKE CLOSING STATEMENTS AND

12   MAY BE REPRESENTED BY COUNSEL OF THEIR CHOICE.

13         (f) IF THE COMMISSIONER DETERMINES THAT REGULATORY ACTION
14   IS APPROPRIATE AS A RESULT OF AN EXAMINATION, THE COMMISSIONER

15   MAY INITIATE ANY PROCEEDINGS OR ACTIONS PROVIDED BY LAW.

16         (g)   NO   PROVISION OF THIS PART   6   SHALL PREVENT OR BE

17   CONSTRUED AS PROHIBITING THE COMMISSIONER FROM DISCLOSING THE

18   CONTENT OF AN EXAMINATION REPORT, A PRELIMINARY EXAMINATION

19   REPORT OR ITS RESULTS, OR ANY RELATED MATTER TO THE INSURANCE

20   DIVISION OF THIS OR ANY OTHER STATE OR COUNTRY, TO LAW

21   ENFORCEMENT OFFICIALS OF THIS OR ANY OTHER STATE, OR TO ANY

22   AGENCY OF THE FEDERAL GOVERNMENT AT ANY TIME, SUBJECT TO THE

23   WRITTEN AGREEMENT OF THE RECIPIENT TO HOLD SUCH INFORMATION

24   CONFIDENTIAL AND TO TREAT IT IN A MANNER CONSISTENT WITH THIS PART

25   6.
26         (5) Confidentiality of examination information. (a) NAMES
27   AND INDIVIDUAL IDENTIFICATION DATA FOR ALL VIATORS SHALL BE



                                    -24-                                SB05-107
 1   CONSIDERED PRIVATE AND CONFIDENTIAL INFORMATION AND SHALL NOT

 2   BE DISCLOSED BY THE COMMISSIONER UNLESS REQUIRED BY LAW.

 3         (b) (I) EXCEPT    AS OTHERWISE PROVIDED IN THIS PART   6,   ALL

 4   EXAMINATION REPORTS, WORKING PAPERS, RECORDED INFORMATION, AND

 5   DOCUMENTS, AND COPIES THEREOF, PRODUCED BY, OBTAINED BY, OR

 6   DISCLOSED TO THE COMMISSIONER OR ANY OTHER PERSON IN THE COURSE

 7   OF AN EXAMINATION MADE UNDER THIS PART     6,   OR IN THE COURSE OF

 8   ANALYSIS OR INVESTIGATION BY THE COMMISSIONER OF THE FINANCIAL

 9   CONDITION OR MARKET CONDUCT OF A LICENSEE, ARE:

10         (A) CONFIDENTIAL BY LAW AND PRIVILEGED;
11         (B) NOT SUBJECT TO ARTICLE 72 OF TITLE 24, C.R.S.;
12         (C) NOT SUBJECT TO SUBPOENA; AND
13         (D) NOT SUBJECT TO DISCOVERY OR ADMISSIBLE IN EVIDENCE IN
14   ANY PRIVATE CIVIL ACTION.

15         (II) THE COMMISSIONER IS AUTHORIZED TO USE THE DOCUMENTS,
16   MATERIALS, OR OTHER INFORMATION DESCRIBED IN SUBPARAGRAPH (I) OF

17   THIS PARAGRAPH   (b)   IN THE FURTHERANCE OF ANY REGULATORY OR

18   LEGAL ACTION BROUGHT AS PART OF THE COMMISSIONER'S OFFICIAL

19   DUTIES.

20         (III) FOR THE PURPOSES OF THIS PARAGRAPH (b), "THIS PART 6"
21   INCLUDES THE LAW OF ANOTHER STATE OR JURISDICTION THAT IS

22   SUBSTANTIALLY SIMILAR TO THIS PART 6.

23         (c) DOCUMENTS, MATERIALS, OR OTHER INFORMATION, INCLUDING,
24   BUT NOT LIMITED TO, ALL WORKING PAPERS AND COPIES THEREOF IN THE

25   POSSESSION OR CONTROL OF THE       NAIC   AND ITS AFFILIATES AND

26   SUBSIDIARIES ARE:

27         (I) CONFIDENTIAL BY LAW AND PRIVILEGED;


                                     -25-                               SB05-107
 1         (II) NOT SUBJECT TO SUBPOENA; AND
 2         (III) NOT SUBJECT TO DISCOVERY OR ADMISSIBLE IN EVIDENCE IN
3    ANY PRIVATE CIVIL ACTION IF THEY ARE:

 4         (A) CREATED, PRODUCED, OR OBTAINED BY OR DISCLOSED TO THE
 5   NAIC AND ITS AFFILIATES AND SUBSIDIARIES IN THE COURSE OF ASSISTING
 6   AN EXAMINATION MADE UNDER THIS PART               6,    OR ASSISTING THE

 7   COMMISSIONER IN THE ANALYSIS OR INVESTIGATION OF THE FINANCIAL

 8   CONDITION OR MARKET CONDUCT OF A LICENSEE; OR

 9         (B) DISCLOSED TO THE NAIC OR ITS AFFILIATES AND SUBSIDIARIES
10   UNDER PARAGRAPH       (d) OF THIS SUBSECTION (5) BY THE COMMISSIONER.
11         (d) THE     COMMISSIONER OR ANY PERSON THAT RECEIVED THE

12   DOCUMENTS, MATERIAL, OR OTHER INFORMATION WHILE ACTING UNDER

13   THE AUTHORITY OF THE COMMISSIONER, INCLUDING THE             NAIC AND ITS
14   AFFILIATES AND SUBSIDIARIES, IS PERMITTED TO TESTIFY IN ANY PRIVATE

15   CIVIL ACTION CONCERNING ANY CONFIDENTIAL DOCUMENTS, MATERIALS,

16   OR INFORMATION SUBJECT TO PARAGRAPH       (a) OF THIS SUBSECTION (5).
17         (e)   IN   ORDER TO ASSIST IN THE PERFORMANCE OF THE

18   COMMISSIONER'S DUTIES, THE COMMISSIONER:

19         (I) MAY SHARE DOCUMENTS, MATERIALS, OR OTHER INFORMATION,
20   INCLUDING THE CONFIDENTIAL AND PRIVILEGED DOCUMENTS, MATERIALS,

21   OR INFORMATION SUBJECT TO PARAGRAPH        (a)   OF THIS SUBSECTION    (5),
22   WITH OTHER STATE, FEDERAL, AND INTERNATIONAL REGULATORY

23   AGENCIES, WITH THE NAIC AND ITS AFFILIATES AND SUBSIDIARIES, AND

24   WITH STATE, FEDERAL, AND INTERNATIONAL LAW ENFORCEMENT

25   AUTHORITIES      IF   THE   RECIPIENT    AGREES        TO   MAINTAIN   THE

26   CONFIDENTIALITY AND PRIVILEGED STATUS OF THE DOCUMENT, MATERIAL,

27   COMMUNICATION, OR OTHER INFORMATION;



                                       -26-                                   SB05-107
 1         (II) MAY RECEIVE DOCUMENTS, MATERIALS, COMMUNICATIONS, OR
 2   INFORMATION, INCLUDING OTHERWISE CONFIDENTIAL AND PRIVILEGED

 3   DOCUMENTS, MATERIALS, OR INFORMATION, FROM THE         NAIC   AND ITS

 4   AFFILIATES AND SUBSIDIARIES, AND FROM REGULATORY AND LAW

 5   ENFORCEMENT OFFICIALS OF OTHER FOREIGN OR DOMESTIC JURISDICTIONS,

 6   AND SHALL MAINTAIN AS CONFIDENTIAL OR PRIVILEGED ANY DOCUMENT,

 7   MATERIAL,   OR    INFORMATION   RECEIVED      WITH   NOTICE   OR   THE

 8   UNDERSTANDING THAT IT IS CONFIDENTIAL OR PRIVILEGED UNDER THE

 9   LAWS OF THE JURISDICTION THAT IS THE SOURCE OF THE DOCUMENT,

10   MATERIAL, OR INFORMATION; AND

11         (III) MAY ENTER INTO AGREEMENTS GOVERNING THE SHARING AND
12   USE OF INFORMATION CONSISTENT WITH THIS SUBSECTION (5).

13         (f) NO     WAIVER OF ANY APPLICABLE PRIVILEGE OR CLAIM OF

14   CONFIDENTIALITY IN THE DOCUMENTS, MATERIALS, OR INFORMATION

15   SHALL OCCUR AS A RESULT OF DISCLOSURE TO THE COMMISSIONER UNDER

16   THIS SECTION OR AS A RESULT OF SHARING AS AUTHORIZED IN PARAGRAPH

17   (e) OF THIS SUBSECTION (5).
18         (g) A PRIVILEGE ESTABLISHED UNDER THE LAW OF ANY STATE OR
19   JURISDICTION THAT IS SUBSTANTIALLY SIMILAR TO THE PRIVILEGE

20   ESTABLISHED UNDER THIS SUBSECTION      (5)   SHALL BE AVAILABLE AND

21   ENFORCED IN ANY PROCEEDING IN, AND IN ANY COURT OF, THIS STATE.

22         (h) NOTHING CONTAINED IN THIS PART 6 SHALL PREVENT OR BE
23   CONSTRUED AS PROHIBITING THE COMMISSIONER FROM DISCLOSING THE

24   CONTENT OF AN EXAMINATION REPORT, A PRELIMINARY EXAMINATION

25   REPORT OR ITS RESULTS, OR ANY RELATED MATTER TO THE COMMISSIONER

26   OF ANY OTHER STATE OR COUNTRY, TO LAW ENFORCEMENT OFFICIALS OF

27   THIS OR ANY OTHER STATE OR AGENCY OF THE FEDERAL GOVERNMENT AT



                                     -27-                                SB05-107
 1   ANY TIME, OR TO THE NAIC, IF THE PERSON RECEIVING THE REPORT OR

 2   MATTERS RELATING THERETO AGREES IN WRITING TO HOLD IT

 3   CONFIDENTIAL AND IN A MANNER CONSISTENT WITH THIS PART 6.

 4           (6)    Conflict of interest.   (a)    AN   EXAMINER MAY NOT BE

 5   APPOINTED BY THE COMMISSIONER IF THE EXAMINER, EITHER DIRECTLY OR

 6   INDIRECTLY, HAS A CONFLICT OF INTEREST OR IS AFFILIATED WITH THE

 7   MANAGEMENT OF, OR OWNS A PECUNIARY INTEREST IN, ANY PERSON

 8   SUBJECT TO EXAMINATION UNDER THIS PART 6.          THIS SECTION SHALL NOT
9    BE CONSTRUED TO AUTOMATICALLY PRECLUDE AN EXAMINER FROM BEING:

10           (I) A VIATOR;
11           (II) AN INSURED IN A VIATICATED POLICY; OR
12           (III) A BENEFICIARY IN AN INSURANCE POLICY THAT IS PROPOSED
13   TO BE THE SUBJECT OF A VIATICAL SETTLEMENT CONTRACT.

14           (b) NOTWITHSTANDING ANY PROVISION OF PARAGRAPH (a) OF THIS
15   SUBSECTION (6) TO THE CONTRARY, THE COMMISSIONER MAY RETAIN FROM

16   TIME TO TIME, ON AN INDIVIDUAL BASIS, QUALIFIED ACTUARIES, CERTIFIED

17   PUBLIC ACCOUNTANTS, OR OTHER SIMILAR INDIVIDUALS WHO ARE

18   INDEPENDENTLY PRACTICING THEIR PROFESSIONS, EVEN THOUGH THESE

19   PERSONS MAY FROM TIME TO TIME BE SIMILARLY EMPLOYED OR RETAINED

20   BY PERSONS SUBJECT TO EXAMINATION UNDER PROVISIONS OF THIS PART

21   6.
22           (7)    Cost of examinations.         THE   EXPENSES INCURRED IN

23   CONDUCTING ANY EXAMINATION SHALL BE PAID BY THE LICENSEE OR

24   APPLICANT.

25           (8) Immunity from liability. (a) NO CAUSE OF ACTION SHALL
26   ARISE    NOR    SHALL   ANY   LIABILITY      BE    IMPOSED   AGAINST   THE

27   COMMISSIONER, THE COMMISSIONER'S AUTHORIZED REPRESENTATIVES, OR



                                        -28-                                 SB05-107
 1   ANY EXAMINER APPOINTED BY THE COMMISSIONER FOR ANY STATEMENTS

 2   MADE OR CONDUCT PERFORMED IN GOOD FAITH WHILE CARRYING OUT THE

 3   PROVISIONS OF THIS PART 6.

 4         (b) NO   CAUSE OF ACTION SHALL ARISE FROM, NOR SHALL ANY

 5   LIABILITY BE IMPOSED AGAINST ANY PERSON FOR, THE ACT OF

 6   COMMUNICATING OR DELIVERING INFORMATION OR DATA TO THE

 7   COMMISSIONER, THE COMMISSIONER'S AUTHORIZED REPRESENTATIVE, OR

 8   AN EXAMINER PURSUANT TO AN EXAMINATION MADE UNDER THIS PART 6,

 9   IF THE ACT OF COMMUNICATION OR DELIVERY WAS PERFORMED IN GOOD

10   FAITH AND WITHOUT FRAUDULENT INTENT OR THE INTENT TO DECEIVE.

11   THIS PARAGRAPH (b) DOES NOT ABROGATE OR MODIFY IN ANY WAY ANY
12   COMMON LAW OR STATUTORY PRIVILEGE OR IMMUNITY ENJOYED BY ANY

13   PERSON IDENTIFIED IN PARAGRAPH   (a) OF THIS SUBSECTION (8).
14         (c) A    PERSON IDENTIFIED IN PARAGRAPH    (a)   OR   (b)   OF THIS

15   SUBSECTION (8) SHALL BE ENTITLED TO AN AWARD OF ATTORNEY FEES AND

16   COSTS IF HE OR SHE IS THE PREVAILING PARTY IN A CIVIL CAUSE OF ACTION

17   FOR LIBEL, SLANDER, OR ANY OTHER RELEVANT TORT ARISING OUT OF

18   ACTIVITIES IN CARRYING OUT THE PROVISIONS OF THIS PART 6, AND THE

19   PARTY BRINGING THE ACTION WAS NOT SUBSTANTIALLY JUSTIFIED IN

20   DOING SO.   FOR   PURPOSES OF THIS PARAGRAPH   (c),   A PROCEEDING IS

21   SUBSTANTIALLY JUSTIFIED IF IT HAD A REASONABLE BASIS IN LAW OR FACT

22   AT THE TIME THAT IT WAS INITIATED.

23         (9)   Investigative authority of the commissioner.             THE
24   COMMISSIONER MAY INVESTIGATE SUSPECTED FRAUDULENT VIATICAL

25   SETTLEMENT ACTS AND PERSONS ENGAGED IN THE BUSINESS OF VIATICAL

26   SETTLEMENTS.

27         10-7-608. Disclosures. (1) WITH      EACH APPLICATION FOR A



                                     -29-                                   SB05-107
 1   VIATICAL SETTLEMENT CONTRACT, A VIATICAL SETTLEMENT PROVIDER OR

 2   LIFE INSURANCE PRODUCER SHALL PROVIDE THE VIATOR WITH AT LEAST

 3   THE FOLLOWING INFORMATION, IN A SEPARATE DOCUMENT SIGNED BY THE

 4   VIATOR AND THE VIATICAL SETTLEMENT PROVIDER OR LIFE INSURANCE

 5   PRODUCER, NO LATER THAN THE TIME THE APPLICATION FOR THE VIATICAL

 6   SETTLEMENT CONTRACT IS SIGNED BY ALL PARTIES:

 7         (a) THAT THERE EXIST POSSIBLE ALTERNATIVES TO A VIATICAL
 8   SETTLEMENT CONTRACT, INCLUDING ANY ACCELERATED DEATH BENEFITS

 9   OR POLICY LOANS OFFERED UNDER THE VIATOR'S LIFE INSURANCE POLICY;

10         (b) THAT   SOME OR ALL OF THE PROCEEDS OF THE VIATICAL

11   SETTLEMENT CONTRACT MAY BE TAXABLE UNDER FEDERAL INCOME TAX

12   AND STATE FRANCHISE AND INCOME TAXES, AND ASSISTANCE MAY BE

13   SOUGHT FROM A PROFESSIONAL TAX ADVISOR;

14         (c) THAT PROCEEDS OF THE VIATICAL SETTLEMENT CONTRACT MAY
15   BE SUBJECT TO THE CLAIMS OF CREDITORS;

16         (d) THAT RECEIPT OF THE PROCEEDS OF A VIATICAL SETTLEMENT
17   CONTRACT MAY ADVERSELY AFFECT THE VIATOR'S ELIGIBILITY FOR

18   MEDICAID OR OTHER GOVERNMENT BENEFITS OR ENTITLEMENTS, AND

19   ADVICE MAY BE OBTAINED FROM THE APPROPRIATE GOVERNMENT

20   AGENCIES;

21         (e) THAT   THE VIATOR HAS THE RIGHT TO RESCIND A VIATICAL

22   SETTLEMENT CONTRACT BEFORE THE EARLIER OF THIRTY CALENDAR DAYS

23   AFTER THE DATE UPON WHICH THE VIATICAL SETTLEMENT CONTRACT IS

24   EXECUTED BY ALL PARTIES OR FIFTEEN CALENDAR DAYS AFTER THE

25   RECEIPT OF THE VIATICAL SETTLEMENT PROCEEDS BY THE VIATOR.

26   RESCISSION, IF EXERCISED BY THE VIATOR, IS EFFECTIVE ONLY IF BOTH
27   NOTICE OF THE RESCISSION IS GIVEN AND REPAYMENT OF ALL PROCEEDS



                                   -30-                             SB05-107
 1   AND ANY PREMIUMS, LOANS, AND LOAN INTEREST TO THE VIATICAL

 2   SETTLEMENT PROVIDER IS MADE WITHIN THE RESCISSION PERIOD. IF THE

 3   INSURED DIES DURING THE RESCISSION PERIOD, THE VIATICAL SETTLEMENT

 4   CONTRACT IS DEEMED TO HAVE BEEN RESCINDED, SUBJECT TO REPAYMENT

 5   OF ALL VIATICAL SETTLEMENT PROCEEDS AND ANY PREMIUMS, LOANS, AND

 6   LOAN INTEREST BEING MADE TO THE VIATICAL SETTLEMENT PROVIDER

 7   WITHIN THE RESCISSION PERIOD.

 8         (f) THAT   FUNDS MUST BE SENT TO THE VIATOR WITHIN THREE

 9   BUSINESS DAYS AFTER THE VIATICAL SETTLEMENT PROVIDER HAS

10   RECEIVED THE INSURER OR GROUP ADMINISTRATOR'S ACKNOWLEDGMENT

11   THAT OWNERSHIP OF THE VIATICATED POLICY HAS BEEN TRANSFERRED

12   AND THE BENEFICIARY HAS BEEN DESIGNATED;

13         (g) THAT ENTERING INTO A VIATICAL SETTLEMENT CONTRACT MAY
14   CAUSE OTHER RIGHTS OR BENEFITS, INCLUDING CONVERSION RIGHTS AND

15   WAIVER OF PREMIUM BENEFITS THAT MAY EXIST UNDER THE POLICY, TO BE

16   FORFEITED BY THE VIATOR, AND THAT THE VIATOR MAY SEEK ASSISTANCE

17   FROM AN INDEPENDENT FINANCIAL ADVISER;

18         (h) THE FOLLOWING STATEMENT: "ALL MEDICAL, FINANCIAL, OR
19   PERSONAL INFORMATION SOLICITED OR OBTAINED BY A VIATICAL

20   SETTLEMENT PROVIDER OR A LIFE INSURANCE PRODUCER ABOUT AN

21   INSURED, INCLUDING THE INSURED'S IDENTITY OR THE IDENTITY OF FAMILY

22   MEMBERS, A SPOUSE, OR A SIGNIFICANT OTHER, MAY BE DISCLOSED AS

23   NECESSARY TO EFFECT THE VIATICAL SETTLEMENT CONTRACT BETWEEN

24   THE VIATOR AND THE VIATICAL SETTLEMENT PROVIDER. IF YOU ARE ASKED

25   TO PROVIDE THIS INFORMATION, YOU WILL BE ASKED TO CONSENT TO THE

26   DISCLOSURE.   THE INFORMATION MAY BE PROVIDED TO SOMEONE WHO
27   BUYS THE POLICY OR PROVIDES FUNDS FOR THE PURCHASE.    YOU MAY BE


                                     -31-                             SB05-107
 1   ASKED TO RENEW YOUR PERMISSION TO SHARE INFORMATION EVERY TWO

 2   YEARS."

 3           (i)   THAT   THE INSURED MAY BE CONTACTED BY EITHER THE

 4   VIATICAL SETTLEMENT PROVIDER OR ITS AUTHORIZED REPRESENTATIVE

 5   FOR THE PURPOSE OF DETERMINING THE INSURED'S HEALTH STATUS.    THIS
 6   CONTACT IS LIMITED TO ONCE EVERY THREE MONTHS IF THE INSURED HAS

 7   A LIFE EXPECTANCY OF MORE THAN ONE YEAR, AND NO MORE THAN ONCE

 8   EACH MONTH IF THE INSURED HAS A LIFE EXPECTANCY OF ONE YEAR OR

 9   LESS.

10           (2) IN ADDITION TO THE INFORMATION DESCRIBED IN SUBSECTION
11   (1)   OF THIS SECTION, THE DISCLOSURE TO A VIATOR SHALL INCLUDE

12   DISTRIBUTION OF A BROCHURE, APPROVED BY THE COMMISSIONER,

13   DESCRIBING THE PROCESS OF VIATICAL SETTLEMENTS.

14           (3)   NO    LATER THAN THE DATE THE VIATICAL SETTLEMENT

15   CONTRACT IS SIGNED BY ALL PARTIES, THE VIATICAL SETTLEMENT

16   PROVIDER SHALL PROVIDE THE VIATOR WITH AT LEAST THE FOLLOWING

17   INFORMATION, DISPLAYED CONSPICUOUSLY IN THE VIATICAL SETTLEMENT

18   CONTRACT OR IN A SEPARATE DOCUMENT SIGNED BY THE VIATOR AND THE

19   VIATICAL SETTLEMENT PROVIDER:

20           (a) THE AFFILIATION, IF ANY, BETWEEN THE VIATICAL SETTLEMENT
21   PROVIDER AND THE ISSUER OF THE INSURANCE POLICY TO BE ACQUIRED

22   PURSUANT TO THE VIATICAL SETTLEMENT CONTRACT;

23           (b)   THE    NAME, ADDRESS, AND TELEPHONE NUMBER OF THE

24   VIATICAL SETTLEMENT PROVIDER;

25           (c) IF   A POLICY TO BE ACQUIRED PURSUANT TO A VIATICAL

26   SETTLEMENT CONTRACT HAS BEEN ISSUED AS A JOINT POLICY OR INVOLVES

27   FAMILY RIDERS OR ANY COVERAGE OF A LIFE OTHER THAN THE INSURED



                                      -32-                             SB05-107
 1   UNDER THE POLICY TO BE ACQUIRED PURSUANT TO A VIATICAL

 2   SETTLEMENT CONTRACT, THE VIATOR SHALL BE INFORMED OF THE

 3   POSSIBLE LOSS OF COVERAGE ON THE OTHER LIVES UNDER THE POLICY AND

 4   ADVISED TO CONSULT WITH HIS OR HER INSURANCE PRODUCER OR THE

 5   INSURER ISSUING THE POLICY FOR ADVICE ON THE PROPOSED VIATICAL

 6   SETTLEMENT CONTRACT;

 7         (d)   THE   DOLLAR AMOUNT OF THE CURRENT DEATH BENEFIT

 8   PAYABLE TO THE VIATICAL SETTLEMENT PROVIDER UNDER THE POLICY. IF

 9   KNOWN, THE VIATICAL SETTLEMENT PROVIDER SHALL ALSO DISCLOSE THE

10   AVAILABILITY OF ADDITIONAL GUARANTEED INSURANCE BENEFITS, THE

11   DOLLAR AMOUNT OF ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS

12   UNDER THE POLICY OR CERTIFICATE, AND THE VIATICAL SETTLEMENT

13   PROVIDER'S INTEREST IN THOSE BENEFITS.

14         (e) THE NAME, BUSINESS ADDRESS, AND TELEPHONE NUMBER OF
15   THE INDEPENDENT THIRD PARTY ESCROW AGENT, AND THE FACT THAT THE

16   VIATOR MAY INSPECT OR RECEIVE COPIES OF THE RELEVANT ESCROW OR

17   TRUST AGREEMENTS OR DOCUMENTS.

18         (4)   IF    THE VIATICAL SETTLEMENT PROVIDER TRANSFERS

19   OWNERSHIP OR CHANGES THE BENEFICIARY OF THE POLICY, THE VIATICAL

20   SETTLEMENT PROVIDER SHALL COMMUNICATE THE CHANGE IN OWNERSHIP

21   OR BENEFICIARY TO THE INSURED WITHIN TWENTY DAYS AFTER THE

22   CHANGE.

23         (5) WITH    RESPECT TO EACH POLICY ISSUED BY AN INSURANCE

24   COMPANY, THE INSURANCE COMPANY SHALL SEND WRITTEN NOTICE TO

25   THE OWNER OF A POLICY, WHERE THE INSURED PERSON UNDER SUCH

26   POLICY IS AGE SIXTY OR OLDER OR IS KNOWN TO BE TERMINALLY ILL OR

27   CHRONICALLY ILL, THAT A VIATICAL SETTLEMENT CONTRACT IS AN



                                    -33-                            SB05-107
1    AVAILABLE ALTERNATIVE TRANSACTION TO SUCH OWNER AT THE TIME OF

2    EACH OF THE FOLLOWING:

3          (a) WHEN AN INSURANCE COMPANY RECEIVES FROM SUCH OWNER
4    A REQUEST TO SURRENDER, IN WHOLE OR IN PART, A POLICY;

5          (b) WHEN AN INSURANCE COMPANY RECEIVES FROM SUCH OWNER
6    A REQUEST TO RECEIVE AN ACCELERATED DEATH BENEFIT UNDER A

 7   POLICY;

8          (c) WHEN AN INSURANCE COMPANY RECEIVES FROM SUCH OWNER
9    A REQUEST COLLATERALLY TO ASSIGN A POLICY AS SECURITY FOR A LOAN;

10         (d) WHEN     AN INSURANCE COMPANY SENDS TO SUCH OWNER A

11   NOTICE OF LAPSE OF A POLICY; OR

12         (e)   AT    ANY OTHER TIME THAT THE COMMISSIONER MAY SO

13   REQUIRE BY RULE.

14         10-7-609.     General requirements.   (1) (a)   A   VIATICAL

15   SETTLEMENT PROVIDER ENTERING INTO A VIATICAL SETTLEMENT

16   CONTRACT SHALL FIRST OBTAIN:

17         (I) IF THE VIATOR IS THE INSURED, A WRITTEN STATEMENT FROM A
18   LICENSED ATTENDING PHYSICIAN THAT THE VIATOR IS OF SOUND MIND AND

19   UNDER NO CONSTRAINT OR UNDUE INFLUENCE TO ENTER INTO A VIATICAL

20   SETTLEMENT CONTRACT; AND

21         (II) A   DOCUMENT IN WHICH THE INSURED CONSENTS TO THE

22   RELEASE OF HIS OR HER MEDICAL RECORDS TO A VIATICAL SETTLEMENT

23   PROVIDER OR INSURANCE PRODUCER AND, IF THE POLICY WAS ISSUED LESS

24   THAN TWO YEARS AFTER THE DATE OF APPLICATION FOR A VIATICAL

25   SETTLEMENT CONTRACT, TO THE INSURANCE COMPANY THAT ISSUED THE

26   POLICY.

27         (b) THE INSURER SHALL RESPOND TO A REQUEST FOR VERIFICATION


                                       -34-                          SB05-107
 1   OF COVERAGE SUBMITTED BY A VIATICAL SETTLEMENT PROVIDER OR LIFE

 2   INSURANCE PRODUCER NOT LATER THAN THIRTY CALENDAR DAYS AFTER

 3   THE DATE THE REQUEST IS RECEIVED.   THE REQUEST FOR VERIFICATION OF
 4   COVERAGE SHALL BE MADE ON A FORM APPROVED BY THE COMMISSIONER.

 5   THE   INSURER SHALL COMPLETE AND ISSUE THE VERIFICATION OF

 6   COVERAGE OR INDICATE IN WHICH RESPECTS IT IS UNABLE TO RESPOND. IN

 7   ITS RESPONSE, THE INSURER SHALL INDICATE WHETHER, BASED ON THE

 8   MEDICAL EVIDENCE AND DOCUMENTS PROVIDED, THE INSURER INTENDS TO

 9   PURSUE AN INVESTIGATION AT THIS TIME REGARDING THE VALIDITY OF THE

10   INSURANCE CONTRACT OR POSSIBLE FRAUD, AND SHALL PROVIDE

11   SUFFICIENT DETAIL OF ALL REASONS FOR THE INVESTIGATION TO THE

12   VIATICAL SETTLEMENT PROVIDER OR LIFE INSURANCE PRODUCER.

13          (c) BEFORE   OR AT THE TIME OF EXECUTION OF THE VIATICAL

14   SETTLEMENT CONTRACT, THE VIATICAL SETTLEMENT PROVIDER SHALL

15   OBTAIN A WITNESSED DOCUMENT IN WHICH THE VIATOR CONSENTS TO THE

16   VIATICAL SETTLEMENT CONTRACT, REPRESENTS THAT THE VIATOR HAS A

17   FULL AND COMPLETE UNDERSTANDING OF THE VIATICAL SETTLEMENT

18   CONTRACT, ACKNOWLEDGES THAT THE VIATOR HAS A FULL AND COMPLETE

19   UNDERSTANDING OF THE BENEFITS OF THE POLICY, ACKNOWLEDGES THAT

20   THE VIATOR IS ENTERING INTO THE VIATICAL SETTLEMENT CONTRACT

21   FREELY AND VOLUNTARILY, AND, FOR PERSONS WITH A TERMINAL OR

22   CHRONIC ILLNESS OR CONDITION, ACKNOWLEDGES THAT THE INSURED HAS

23   A TERMINAL OR CHRONIC ILLNESS AND THAT THE TERMINAL OR CHRONIC

24   ILLNESS OR CONDITION WAS DIAGNOSED AFTER THE POLICY WAS ISSUED.

25          (d) IF   A LIFE INSURANCE PRODUCER PERFORMS ANY OF THE

26   ACTIVITIES REQUIRED OF THE VIATICAL SETTLEMENT PROVIDER BY THIS

27   SUBSECTION (1), THE VIATICAL SETTLEMENT PROVIDER IS DEEMED TO HAVE



                                    -35-                              SB05-107
 1   FULFILLED THE REQUIREMENTS OF THIS SECTION.

 2         (2)   MEDICAL   INFORMATION SOLICITED OR OBTAINED BY A

 3   LICENSEE IS SUBJECT TO THE APPLICABLE PROVISIONS OF STATE LAW

 4   RELATING TO CONFIDENTIALITY OF MEDICAL OR PROTECTED HEALTH

 5   INFORMATION.

 6         (3) A VIATICAL SETTLEMENT CONTRACT ENTERED INTO IN THIS
 7   STATE SHALL PROVIDE THE VIATOR WITH AN UNCONDITIONAL RIGHT TO

 8   RESCIND THE CONTRACT BEFORE THE EARLIER OF THIRTY CALENDAR DAYS

 9   AFTER THE DATE WHEN THE VIATICAL SETTLEMENT CONTRACT IS

10   EXECUTED BY ALL PARTIES OR FIFTEEN CALENDAR DAYS AFTER THE

11   RECEIPT OF THE VIATICAL SETTLEMENT PROCEEDS BY THE VIATOR.

12   RESCISSION, IF EXERCISED BY THE VIATOR, IS EFFECTIVE ONLY IF BOTH
13   NOTICE OF THE RESCISSION IS GIVEN AND REPAYMENT OF ALL PROCEEDS

14   AND ANY PREMIUMS, LOANS, AND LOAN INTEREST TO THE VIATICAL

15   SETTLEMENT PROVIDER IS MADE WITHIN THE RESCISSION PERIOD. IF THE

16   INSURED DIES DURING THE RESCISSION PERIOD, THE VIATICAL SETTLEMENT

17   CONTRACT SHALL BE DEEMED TO HAVE BEEN RESCINDED IF REPAYMENT OF

18   ALL VIATICAL SETTLEMENT PROCEEDS AND ANY PREMIUMS, LOANS, AND

19   LOAN INTEREST TO THE VIATICAL SETTLEMENT PROVIDER IS MADE WITHIN

20   FORTY-FIVE DAYS AFTER THE END OF THE RESCISSION PERIOD.

21         (4) THE VIATICAL SETTLEMENT PROVIDER SHALL INSTRUCT THE
22   VIATOR TO SEND THE EXECUTED DOCUMENTS REQUIRED TO EFFECT THE

23   CHANGE IN OWNERSHIP, ASSIGNMENT, OR BENEFICIARY DIRECTLY TO AN

24   INDEPENDENT ESCROW AGENT. IF THE VIATOR ERRONEOUSLY PROVIDES

25   THE DOCUMENTS DIRECTLY TO THE VIATICAL SETTLEMENT PROVIDER, THE

26   VIATICAL SETTLEMENT PROVIDER SHALL IMMEDIATELY NOTIFY THE

27   ESCROW AGENT AND SHALL PAY OR TRANSFER THE PROCEEDS OF THE



                                    -36-                             SB05-107
 1   VIATICAL SETTLEMENT CONTRACT INTO AN ESCROW OR TRUST ACCOUNT

 2   MAINTAINED IN A STATE OR FEDERALLY CHARTERED FINANCIAL

 3   INSTITUTION WHOSE DEPOSITS ARE INSURED BY THE FEDERAL DEPOSIT

 4   INSURANCE CORPORATION WITHIN THREE BUSINESS DAYS AFTER THE DATE

 5   THE ESCROW AGENT RECEIVES THE DOCUMENTS, OR AFTER THE DATE THE

 6   VIATICAL SETTLEMENT PROVIDER RECEIVES THE DOCUMENTS.     UPON
 7   PAYMENT OF THE VIATICAL SETTLEMENT PROCEEDS INTO THE ESCROW

 8   ACCOUNT, THE ESCROW AGENT SHALL DELIVER THE ORIGINAL CHANGE IN

 9   OWNERSHIP, ASSIGNMENT, OR BENEFICIARY FORMS TO THE VIATICAL

10   SETTLEMENT PROVIDER OR RELATED PROVIDER TRUST. UPON THE ESCROW

11   AGENT'S RECEIPT OF THE ACKNOWLEDGMENT OF THE PROPERLY

12   COMPLETED TRANSFER OF OWNERSHIP, ASSIGNMENT, OR DESIGNATION OF

13   BENEFICIARY FROM THE INSURANCE COMPANY, THE ESCROW AGENT SHALL

14   PAY THE VIATICAL SETTLEMENT PROCEEDS TO THE VIATOR.

15         (5) FAILURE TO TENDER CONSIDERATION TO THE VIATOR FOR THE
16   VIATICAL SETTLEMENT CONTRACT WITHIN THE TIME REQUIRED RENDERS

17   THE VIATICAL SETTLEMENT CONTRACT VOIDABLE BY THE VIATOR FOR

18   LACK OF CONSIDERATION UNTIL CONSIDERATION IS TENDERED TO AND

19   ACCEPTED BY THE VIATOR.

20         (6)   A   CONTACT WITH THE INSURED, FOR THE PURPOSE OF

21   DETERMINING THE HEALTH STATUS OF THE INSURED BY THE VIATICAL

22   SETTLEMENT PROVIDER AFTER THE VIATICAL SETTLEMENT CONTRACT HAS

23   BEEN EXECUTED, MAY BE MADE ONLY BY THE LICENSED VIATICAL

24   SETTLEMENT PROVIDER OR ITS AUTHORIZED REPRESENTATIVES AND IS

25   LIMITED TO ONCE EVERY THREE MONTHS FOR INSUREDS WITH A LIFE

26   EXPECTANCY OF MORE THAN ONE YEAR, AND NOT MORE THAN ONCE EACH

27   MONTH FOR INSUREDS WITH A LIFE EXPECTANCY OF ONE YEAR OR LESS.



                                   -37-                           SB05-107
 1   THE VIATICAL SETTLEMENT     PROVIDER SHALL EXPLAIN THE PROCEDURE

 2   FOR THESE CONTACTS AT THE TIME OF ENTRY INTO THE VIATICAL

 3   SETTLEMENT CONTRACT.        THE   LIMITATIONS PROVIDED FOR IN THIS

 4   SUBSECTION   (6)   DO NOT APPLY TO A CONTACT WITH AN INSURED FOR

5    REASONS OTHER THAN DETERMINING THE INSURED'S HEALTH STATUS.      A
 6   VIATICAL SETTLEMENT PROVIDER IS RESPONSIBLE FOR THE ACTIONS OF HIS

 7   OR HER AUTHORIZED REPRESENTATIVES.

 8         10-7-610. Limited purchase in incontestability period. (1) IT
 9   IS A VIOLATION OF THIS PART 6 FOR A PERSON TO ENTER INTO A VIATICAL

10   SETTLEMENT CONTRACT WITHIN A TWO-YEAR PERIOD COMMENCING WITH

11   THE DATE OF ISSUANCE OF THE POLICY UNLESS THE VIATOR CERTIFIES TO

12   THE VIATICAL SETTLEMENT PROVIDER THAT ONE OR MORE OF THE

13   FOLLOWING CONDITIONS HAS BEEN MET WITHIN THE TWO-YEAR PERIOD:

14         (a) THE      POLICY WAS ISSUED UPON THE VIATOR'S EXERCISE OF

15   CONVERSION RIGHTS ARISING OUT OF A GROUP OR INDIVIDUAL POLICY, IF

16   THE TOTAL OF THE TIME COVERED UNDER THE CONVERSION POLICY PLUS

17   THE TIME COVERED UNDER THE PRIOR POLICY IS AT LEAST TWENTY-FOUR

18   MONTHS.   THE      TIME COVERED UNDER A GROUP POLICY SHALL BE

19   CALCULATED WITHOUT REGARD TO A CHANGE IN INSURANCE CARRIERS IF

20   THE COVERAGE HAS BEEN CONTINUOUS AND UNDER THE SAME GROUP

21   SPONSORSHIP.

22         (b) THE VIATOR SUBMITS INDEPENDENT EVIDENCE TO THE VIATICAL
23   SETTLEMENT PROVIDER THAT ONE OR MORE OF THE FOLLOWING

24   CONDITIONS HAS BEEN MET WITHIN THE TWO-YEAR PERIOD:

25         (I) THE VIATOR OR INSURED IS TERMINALLY OR CHRONICALLY ILL;
26   OR

27         (II) THE VIATOR OR INSURED DISPOSES OF HIS OR HER OWNERSHIP


                                       -38-                           SB05-107
 1   INTERESTS IN A CLOSELY HELD CORPORATION PURSUANT TO THE TERMS OF

 2   A BUYOUT OR OTHER SIMILAR AGREEMENT IN EFFECT AT THE TIME THE

 3   INSURANCE POLICY WAS INITIALLY ISSUED.

 4         (2)   COPIES   OF THE INDEPENDENT EVIDENCE DESCRIBED IN

 5   PARAGRAPH   (b)   OF SUBSECTION   (1) OF THIS SECTION AND DOCUMENTS
 6   REQUIRED MUST BE SUBMITTED TO THE INSURER WHEN THE VIATICAL

 7   SETTLEMENT PROVIDER SUBMITS A REQUEST TO THE INSURER FOR

 8   VERIFICATION OF COVERAGE.    THE COPIES SHALL BE ACCOMPANIED BY A
 9   LETTER OF ATTESTATION FROM THE VIATICAL SETTLEMENT PROVIDER THAT

10   THE COPIES ARE TRUE AND CORRECT COPIES OF THE DOCUMENTS RECEIVED

11   BY THE VIATICAL SETTLEMENT PROVIDER.

12         (3) IF   THE VIATICAL SETTLEMENT PROVIDER SUBMITS TO THE

13   INSURER A COPY OF INDEPENDENT EVIDENCE PROVIDED FOR IN PARAGRAPH

14   (b) OF SUBSECTION (1) OF THIS SECTION WHEN THE VIATICAL SETTLEMENT
15   PROVIDER SUBMITS A REQUEST TO THE INSURER TO EFFECT THE TRANSFER

16   OF THE POLICY TO THE VIATICAL SETTLEMENT PROVIDER, THE COPY IS

17   DEEMED TO CONCLUSIVELY ESTABLISH THAT THE VIATICAL SETTLEMENT

18   CONTRACT SATISFIES THE REQUIREMENTS OF THIS SECTION AND THE

19   INSURER SHALL RESPOND TIMELY TO THE REQUEST.

20         10-7-611. Advertising - legislative intent. (1) IT IS THE INTENT
21   OF THE GENERAL ASSEMBLY THAT THE PURPOSE OF THIS SECTION IS TO

22   PROVIDE A PROSPECTIVE VIATOR WITH CLEAR AND UNAMBIGUOUS

23   STATEMENTS IN THE ADVERTISEMENT OF A VIATICAL SETTLEMENT

24   CONTRACT AND TO ASSURE THE CLEAR , TRUTHFUL, AND ADEQUATE

25   DISCLOSURE OF THE BENEFITS, RISKS, LIMITATIONS, AND EXCLUSIONS OF

26   A VIATICAL SETTLEMENT CONTRACT.            THIS   PURPOSE IS TO BE

27   ACCOMPLISHED BY THE ESTABLISHMENT OF GUIDELINES AND STANDARDS



                                       -39-                              SB05-107
 1   OF PERMISSIBLE AND IMPERMISSIBLE CONDUCT IN THE ADVERTISING OF A

 2   VIATICAL SETTLEMENT CONTRACT TO ASSURE THAT A PRODUCT

 3   DESCRIPTION IS PRESENTED IN A MANNER THAT PREVENTS UNFAIR,

 4   DECEPTIVE, OR MISLEADING ADVERTISING AND IS CONDUCIVE TO

 5   ACCURATE PRESENTATION AND DESCRIPTION OF A VIATICAL SETTLEMENT

 6   CONTRACT THROUGH THE ADVERTISING MEDIA AND MATERIAL USED BY A

7    LICENSEE.

 8         (2) THIS   SECTION APPLIES TO AN ADVERTISING OF A VIATICAL

 9   SETTLEMENT CONTRACT OR A RELATED PRODUCT OR SERVICE INTENDED

10   FOR DISSEMINATION IN THIS STATE, INCLUDING INTERNET ADVERTISING

11   VIEWED BY A PERSON LOCATED IN THIS STATE.      WHERE     DISCLOSURE

12   REQUIREMENTS ARE ESTABLISHED PURSUANT TO FEDERAL REGULATION,

13   THIS SECTION SHALL BE INTERPRETED SO AS TO MINIMIZE OR ELIMINATE

14   CONFLICT WITH FEDERAL REGULATION WHEREVER POSSIBLE.

15         (3) EACH VIATICAL SETTLEMENT LICENSEE SHALL ESTABLISH AND
16   AT ALL TIMES MAINTAIN A SYSTEM OF CONTROL OVER THE CONTENT,

17   FORM, AND METHOD OF DISSEMINATION OF AN ADVERTISEMENT OF ITS

18   CONTRACTS,   PRODUCTS,   AND    SERVICES.    AN   ADVERTISEMENT,

19   REGARDLESS OF BY WHOM WRITTEN, CREATED, DESIGNED, OR PRESENTED,

20   IS THE RESPONSIBILITY OF THE LICENSEE, AS WELL AS OF THE INDIVIDUAL

21   WHO CREATED OR PRESENTED THE ADVERTISEMENT.          A   SYSTEM OF

22   CONTROL BY THE LICENSEE SHALL INCLUDE REGULAR NOTIFICATION, AT

23   LEAST ONCE A YEAR, TO AGENTS AND OTHERS AUTHORIZED TO

24   DISSEMINATE ADVERTISEMENTS, OF THE REQUIREMENTS AND PROCEDURES

25   FOR APPROVAL BEFORE THE USE OF AN ADVERTISEMENT NOT FURNISHED

26   BY THE LICENSEE.

27         (4) AN ADVERTISEMENT SHALL BE TRUTHFUL AND NOT MISLEADING


                                    -40-                              SB05-107
 1   IN FACT OR BY IMPLICATION.     THE   FORM AND CONTENT OF AN

 2   ADVERTISEMENT OF A VIATICAL SETTLEMENT CONTRACT SHALL BE

 3   SUFFICIENTLY COMPLETE AND CLEAR SO AS TO AVOID DECEPTION. IT MAY

 4   NOT HAVE THE CAPACITY OR TENDENCY TO MISLEAD OR DECEIVE.

 5   WHETHER   AN ADVERTISEMENT HAS THE CAPACITY OR TENDENCY TO

 6   MISLEAD OR DECEIVE SHALL BE DETERMINED BY THE COMMISSIONER FROM

 7   THE OVERALL     IMPRESSION THAT THE ADVERTISEMENT MAY BE

 8   REASONABLY EXPECTED TO CREATE UPON A PERSON OF AVERAGE

 9   EDUCATION OR INTELLIGENCE WITHIN THE SEGMENT OF THE PUBLIC TO

10   WHICH IT IS DIRECTED.

11         (5) (a) THE INFORMATION REQUIRED TO BE DISCLOSED PURSUANT
12   TO THE PROVISIONS OF THIS SECTION MAY NOT BE MINIMIZED, RENDERED

13   OBSCURE, OR PRESENTED IN AN AMBIGUOUS FASHION OR INTERMINGLED

14   WITH THE TEXT OF THE ADVERTISEMENT SO AS TO BE CONFUSING OR

15   MISLEADING.

16         (b) AN ADVERTISEMENT MAY NOT OMIT MATERIAL INFORMATION
17   OR USE WORDS, PHRASES, STATEMENTS, REFERENCES, OR ILLUSTRATIONS

18   IF THE OMISSION OR USE HAS THE CAPACITY, TENDENCY, OR EFFECT OF

19   MISLEADING OR DECEIVING THE PUBLIC AS TO THE NATURE OR EXTENT OF

20   ANY BENEFIT, LOSS COVERED, OR STATE OR FEDERAL TAX CONSEQUENCE.

21   THE FACT THAT THE VIATICAL SETTLEMENT CONTRACT OFFERED IS MADE
22   AVAILABLE FOR INSPECTION BEFORE CONSUMMATION OF THE SALE, OR

23   THAT AN OFFER IS MADE TO REFUND THE PAYMENT IF THE VIATOR IS NOT

24   SATISFIED, OR THAT THE VIATICAL SETTLEMENT CONTRACT INCLUDES A

25   "FREE LOOK" PERIOD THAT SATISFIES OR EXCEEDS LEGAL REQUIREMENTS,
26   DOES NOT REMEDY MISLEADING STATEMENTS.

27         (c) AN ADVERTISEMENT MAY NOT USE THE NAME OR TITLE OF A


                                   -41-                            SB05-107
 1   LIFE INSURANCE COMPANY OR A LIFE INSURANCE POLICY UNLESS THE

 2   ADVERTISEMENT HAS BEEN APPROVED BY THE INSURER.

 3         (d) AN ADVERTISEMENT MAY NOT STATE OR IMPLY THAT INTEREST
 4   CHARGED ON AN ACCELERATED DEATH BENEFIT OR A POLICY LOAN IS

 5   UNFAIR, INEQUITABLE, OR IN ANY MANNER AN INCORRECT OR IMPROPER

 6   PRACTICE.

 7         (e)   THE   WORDS    "FREE", "NO   COST",   "WITHOUT   COST",   "NO
 8   ADDITIONAL COST", OR "AT NO EXTRA COST", OR WORDS OF SIMILAR

 9   IMPORT MAY NOT BE USED WITH RESPECT TO A BENEFIT OR SERVICE

10   UNLESS TRUE.     AN   ADVERTISEMENT MAY SPECIFY THE CHARGE FOR A

11   BENEFIT OR SERVICE OR MAY STATE THAT A CHARGE IS INCLUDED IN THE

12   PAYMENT OR USE OTHER APPROPRIATE LANGUAGE.

13         (f) (I) ANY TESTIMONIAL, APPRAISAL, OR ANALYSIS USED IN AN
14   ADVERTISEMENT SHALL:

15         (A) BE GENUINE;
16         (B) REPRESENT THE CURRENT OPINION OF THE AUTHOR;
17         (C) BE     APPLICABLE TO THE VIATICAL SETTLEMENT CONTRACT,

18   PRODUCT, OR SERVICE ADVERTISED, IF ANY; AND

19         (D)        BE    ACCURATELY   REPRODUCED       WITH    SUFFICIENT

20   COMPLETENESS TO AVOID MISLEADING OR DECEIVING PROSPECTIVE

21   VIATORS AS TO THE NATURE OR SCOPE OF ANY TESTIMONIAL, APPRAISAL,

22   ANALYSIS, OR ENDORSEMENT.

23         (II) IN USING ANY TESTIMONIAL, APPRAISAL, OR ANALYSIS,          THE

24   VIATICAL SETTLEMENT LICENSEE MAKES AS ITS OWN ALL THE STATEMENTS

25   CONTAINED IN THEM, AND THE STATEMENTS ARE SUBJECT TO ALL THE

26   PROVISIONS OF THIS SECTION.

27         (III) IF   THE INDIVIDUAL MAKING A TESTIMONIAL, APPRAISAL,



                                      -42-                                  SB05-107
 1   ANALYSIS, OR ENDORSEMENT HAS A FINANCIAL INTEREST IN THE VIATICAL

 2   SETTLEMENT PROVIDER OR RELATED ENTITY AS A STOCKHOLDER,

 3   DIRECTOR, OFFICER, EMPLOYEE, OR OTHERWISE, OR RECEIVES A BENEFIT,

 4   DIRECTLY OR INDIRECTLY, OTHER THAN REQUIRED UNION SCALE WAGES,

 5   THAT FACT MUST BE DISCLOSED PROMINENTLY IN THE ADVERTISEMENT.

 6            (IV) AN      ADVERTISEMENT MAY NOT STATE OR IMPLY THAT A

 7   VIATICAL SETTLEMENT CONTRACT, BENEFIT, OR SERVICE HAS BEEN

 8   APPROVED OR ENDORSED BY A GROUP OF INDIVIDUALS, SOCIETY,

 9   ASSOCIATION, OR OTHER ORGANIZATION UNLESS THAT IS THE FACT AND

10   UNLESS ANY RELATIONSHIP BETWEEN AN ORGANIZATION AND THE

11   LICENSEE IS DISCLOSED.      IF THE ENTITY MAKING THE ENDORSEMENT OR
12   TESTIMONIAL IS OWNED, CONTROLLED, OR MANAGED BY THE LICENSEE OR

13   RECEIVES PAYMENT OR OTHER CONSIDERATION FROM THE LICENSEE FOR

14   MAKING AN ENDORSEMENT OR TESTIMONIAL, THAT FACT MUST BE

15   DISCLOSED IN THE ADVERTISEMENT.

16            (V) IF AN ENDORSEMENT REFERS TO BENEFITS RECEIVED UNDER A
17   VIATICAL SETTLEMENT CONTRACT, ALL PERTINENT INFORMATION SHALL

18   BE RETAINED FOR A PERIOD OF FIVE YEARS AFTER ITS USE.

19            (VI)    AN    ADVERTISEMENT MAY NOT CONTAIN STATISTICAL

20   INFORMATION UNLESS IT ACCURATELY REFLECTS RECENT AND RELEVANT

21   FACTS.    THE    SOURCE OF ALL STATISTICS USED IN AN ADVERTISEMENT

22   SHALL BE IDENTIFIED.

23            (VII)    AN   ADVERTISEMENT MAY NOT DISPARAGE INSURERS,

24   VIATICAL SETTLEMENT PROVIDERS, INSURANCE PRODUCERS, POLICIES,

25   SERVICES, OR METHODS OF MARKETING.

26            (VIII) THE NAME OF THE VIATICAL SETTLEMENT LICENSEE SHALL
27   BE IDENTIFIED CLEARLY IN ALL ADVERTISEMENTS ABOUT THE LICENSEE OR



                                        -43-                          SB05-107
 1   ITS VIATICAL SETTLEMENT CONTRACT, PRODUCTS, OR SERVICES, AND IF

 2   ANY SPECIFIC VIATICAL SETTLEMENT CONTRACT IS ADVERTISED, THE

 3   VIATICAL SETTLEMENT CONTRACT MUST BE IDENTIFIED EITHER BY FORM

 4   NUMBER OR SOME OTHER APPROPRIATE DESCRIPTION. IF AN APPLICATION

 5   IS PART OF THE ADVERTISEMENT, THE NAME OF THE VIATICAL SETTLEMENT

6    PROVIDER SHALL BE SHOWN ON THE APPLICATION.

 7         (IX) AN ADVERTISEMENT MAY NOT USE A TRADE NAME, GROUP
 8   DESIGNATION, NAME OF THE PARENT COMPANY OF A LICENSEE, NAME OF

 9   A PARTICULAR DIVISION OF THE LICENSEE, SERVICE MARK, SLOGAN,

10   SYMBOL, OR OTHER DEVICE OR REFERENCE WITHOUT DISCLOSING THE

11   NAME OF THE LICENSEE IF THE ADVERTISEMENT HAS THE CAPACITY OR

12   TENDENCY TO MISLEAD OR DECEIVE AS TO THE TRUE IDENTITY OF THE

13   LICENSEE OR TO CREATE THE IMPRESSION THAT A COMPANY OTHER THAN

14   THE LICENSEE HAS ANY RESPONSIBILITY FOR THE FINANCIAL OBLIGATION

15   UNDER A VIATICAL SETTLEMENT CONTRACT.

16         (X) AN   ADVERTISEMENT MAY NOT USE ANY COMBINATION OF

17   WORDS, SYMBOLS, OR PHYSICAL MATERIALS THAT BY THEIR CONTENT,

18   PHRASEOLOGY, SHAPE, COLOR, OR OTHER CHARACTERISTICS ARE SO

19   SIMILAR TO A COMBINATION OF WORDS, SYMBOLS, OR PHYSICAL

20   MATERIALS USED BY A GOVERNMENT PROGRAM OR AGENCY OR OTHERWISE

21   APPEAR TO BE OF SUCH A NATURE THAT THEY TEND TO MISLEAD

22   PROSPECTIVE VIATORS INTO BELIEVING THAT THE SOLICITATION IS IN SOME

23   MANNER CONNECTED WITH A GOVERNMENT PROGRAM OR AGENCY.

24         (XI)   AN   ADVERTISEMENT MAY STATE THAT A LICENSEE IS

25   LICENSED IN THE STATE WHERE THE ADVERTISEMENT APPEARS IF IT DOES

26   NOT EXAGGERATE THAT FACT OR SUGGEST OR IMPLY THAT A COMPETING

27   LICENSEE MAY NOT BE SO LICENSED.   THE ADVERTISEMENT MAY ASK THE


                                    -44-                              SB05-107
 1   AUDIENCE TO CONSULT THE LICENSEE'S WEB SITE OR CONTACT THAT

 2   STATE'S DIVISION OF INSURANCE TO FIND OUT IF THAT STATE REQUIRES

 3   LICENSING AND, IF SO, WHETHER THE LICENSEE OR ANY OTHER COMPANY

 4   IS LICENSED.

 5         (XII) AN ADVERTISEMENT MAY NOT CREATE THE IMPRESSION THAT
 6   THE VIATICAL SETTLEMENT PROVIDER OR ITS FINANCIAL CONDITION OR

 7   STATUS; THE PAYMENT OF ITS CLAIMS; OR THE MERITS, DESIRABILITY, OR

 8   ADVISABILITY    OF   ITS   VIATICAL     SETTLEMENT   CONTRACTS   ARE

9    RECOMMENDED OR ENDORSED BY ANY GOVERNMENT ENTITY.

10         (XIII) THE NAME OF THE ACTUAL LICENSEE SHALL BE STATED IN
11   ALL OF ITS ADVERTISEMENTS.   AN ADVERTISEMENT MAY NOT USE A TRADE
12   NAME, GROUP DESIGNATION, NAME OF ANY AFFILIATE OR CONTROLLING

13   ENTITY OF THE LICENSEE, SERVICE MARK, SLOGAN, SYMBOL, OR OTHER

14   DEVICE IN A MANNER THAT HAS THE CAPACITY OR TENDENCY TO MISLEAD

15   OR DECEIVE AS TO THE TRUE IDENTITY OF THE ACTUAL LICENSEE OR

16   CREATE THE FALSE IMPRESSION THAT AN AFFILIATE OR CONTROLLING

17   ENTITY HAS ANY RESPONSIBILITY FOR THE FINANCIAL OBLIGATION OF THE

18   LICENSEE.

19         (XIV) AN ADVERTISEMENT MAY NOT, DIRECTLY OR INDIRECTLY,
20   CREATE THE IMPRESSION THAT ANY DIVISION OR AGENCY OF THE STATE OR

21   OF THE UNITED STATES GOVERNMENT ENDORSES, APPROVES, OR FAVORS:

22         (A) A    LICENSEE OR ITS BUSINESS PRACTICES OR METHODS OF

23   OPERATION;

24         (B) THE MERITS, DESIRABILITY, OR ADVISABILITY OF A VIATICAL
25   SETTLEMENT CONTRACT;

26         (C) ANY VIATICAL SETTLEMENT CONTRACT; OR
27         (D) ANY POLICY OR LIFE INSURANCE COMPANY.


                                      -45-                             SB05-107
 1         (XV) IF THE ADVERTISER EMPHASIZES THE SPEED WITH WHICH THE
 2   VIATICAL SETTLEMENT CONTRACT OCCURS, THE ADVERTISING MUST

 3   DISCLOSE THE AVERAGE TIME FRAME, FROM COMPLETED APPLICATION TO

 4   THE DATE OF OFFER AND FROM ACCEPTANCE OF THE OFFER TO RECEIPT OF

 5   THE FUNDS BY THE VIATOR.

 6         (XVI) IF THE ADVERTISING EMPHASIZES THE DOLLAR    AMOUNTS

 7   AVAILABLE TO VIATORS, THE ADVERTISING SHALL DISCLOSE THE AVERAGE

 8   PURCHASE PRICE AS A PERCENT OF FACE VALUE OBTAINED BY VIATORS

9    CONTRACTING WITH THE LICENSEE DURING THE PAST SIX MONTHS.

10         10-7-612. Fraudulent acts. (1) (a) A     PERSON SHALL NOT

11   COMMIT A FRAUDULENT VIATICAL SETTLEMENT ACT.

12         (b)   A   PERSON SHALL NOT KNOWINGLY OR INTENTIONALLY

13   INTERFERE WITH THE ENFORCEMENT OF THE PROVISIONS OF THIS PART 6 OR

14   INVESTIGATIONS OF SUSPECTED OR ACTUAL VIOLATIONS OF THIS PART 6.

15         (c) A PERSON IN THE BUSINESS OF VIATICAL SETTLEMENTS SHALL
16   NOT KNOWINGLY OR INTENTIONALLY PERMIT A PERSON CONVICTED OF A

17   FELONY INVOLVING DISHONESTY OR BREACH OF TRUST TO PARTICIPATE IN

18   THE BUSINESS OF VIATICAL SETTLEMENTS.

19         (2) (a) A VIATICAL SETTLEMENT CONTRACT AND AN APPLICATION
20   FOR A VIATICAL SETTLEMENT CONTRACT, REGARDLESS OF THE FORM OF

21   TRANSMISSION, SHALL CONTAIN THE FOLLOWING STATEMENT OR A

22   SUBSTANTIALLY SIMILAR STATEMENT:      "ANY PERSON WHO KNOWINGLY
23   PRESENTS FALSE INFORMATION IN AN APPLICATION FOR INSURANCE OR

24   VIATICAL SETTLEMENT CONTRACT IS GUILTY OF A CRIME AND, UPON

25   CONVICTION, MAY BE SUBJECT TO FINES OR CONFINEMENT IN PRISON, OR

26   BOTH."

27         (b) THE LACK OF A STATEMENT AS PROVIDED FOR IN PARAGRAPH


                                    -46-                             SB05-107
 1   (a)   OF THIS SUBSECTION   (2)   DOES NOT CONSTITUTE A DEFENSE IN ANY

2    PROSECUTION FOR A FRAUDULENT VIATICAL SETTLEMENT ACT.

 3           (3) (a)   A   PERSON ENGAGED IN THE BUSINESS OF VIATICAL

 4   SETTLEMENTS HAVING KNOWLEDGE OR A REASONABLE BELIEF THAT A

 5   FRAUDULENT VIATICAL SETTLEMENT ACT IS BEING, WILL BE, OR HAS BEEN

 6   COMMITTED SHALL PROVIDE TO THE COMMISSIONER THE INFORMATION

 7   REQUIRED BY, AND IN A MANNER PRESCRIBED BY, THE COMMISSIONER.

 8           (b) ANOTHER     PERSON HAVING KNOWLEDGE OR A REASONABLE

 9   BELIEF THAT A FRAUDULENT VIATICAL SETTLEMENT ACT IS BEING, WILL BE,

10   OR HAS BEEN COMMITTED MAY PROVIDE TO THE COMMISSIONER THE

11   INFORMATION REQUIRED BY, AND IN A MANNER PRESCRIBED BY, THE

12   COMMISSIONER.

13           (4) (a) NO    CIVIL LIABILITY SHALL BE IMPOSED UPON, AND NO

14   CAUSE OF ACTION SHALL ARISE FROM THE OTHERWISE LAWFUL CONDUCT

15   OF, A PERSON WHO FURNISHES INFORMATION CONCERNING SUSPECTED,

16   ANTICIPATED, OR COMPLETED FRAUDULENT VIATICAL SETTLEMENT ACTS,

17   OR SUSPECTED OR COMPLETED FRAUDULENT INSURANCE ACTS, IF THE

18   INFORMATION IS PROVIDED TO OR RECEIVED FROM:

19           (I) THE   COMMISSIONER OR THE COMMISSIONER'S EMPLOYEES,

20   AGENTS, OR REPRESENTATIVES;

21           (II)   FEDERAL,    STATE, OR LOCAL LAW ENFORCEMENT OR

22   REGULATORY        OFFICIALS      OR   THEIR   EMPLOYEES,   AGENTS,   OR

23   REPRESENTATIVES;

24           (III) A PERSON INVOLVED IN THE PREVENTION AND DETECTION OF
25   FRAUDULENT VIATICAL SETTLEMENT ACTS OR THAT PERSON'S AGENTS,

26   EMPLOYEES, OR REPRESENTATIVES;

27           (IV) THE NAIC,      THE NATIONAL ASSOCIATION OF SECURITIES



                                           -47-                           SB05-107
 1   DEALERS, OR THE NORTH       AMERICAN    SECURITIES ADMINISTRATORS

 2   ASSOCIATION, OR THEIR EMPLOYEES, AGENTS, OR REPRESENTATIVES, OR

 3   ANOTHER REGULATORY BODY OVERSEEING LIFE INSURANCE OR VIATICAL

 4   SETTLEMENT CONTRACTS; OR

 5           (V) THE INSURER THAT ISSUED THE POLICY COVERING THE LIFE OF
 6   THE INSURED.

 7           (b) PARAGRAPH (a) OF THIS SUBSECTION (4) DOES NOT APPLY TO
 8   A STATEMENT MADE WITH ACTUAL MALICE.         IN   AN ACTION BROUGHT

 9   AGAINST A PERSON FOR FILING A REPORT OR FURNISHING OTHER

10   INFORMATION CONCERNING A FRAUDULENT VIATICAL SETTLEMENT ACT OR

11   A FRAUDULENT INSURANCE ACT, THE PARTY BRINGING THE ACTION SHALL

12   PLEAD SPECIFICALLY ANY ALLEGATION THAT PARAGRAPH         (a)   OF THIS

13   SUBSECTION (4) DOES NOT APPLY BECAUSE THE PERSON FILING THE REPORT

14   OR FURNISHING THE INFORMATION DID SO WITH ACTUAL MALICE.

15           (c) A PERSON IDENTIFIED IN PARAGRAPH (a) OF THIS SUBSECTION
16   (4)   IS ENTITLED TO AN AWARD OF ATTORNEY FEES AND COSTS IF THE

17   PERSON IS THE PREVAILING PARTY IN A CIVIL CAUSE OF ACTION FOR LIBEL,

18   SLANDER, OR ANOTHER RELEVANT TORT ARISING OUT OF ACTIVITIES IN

19   CARRYING OUT THE PROVISIONS OF THIS PART 6 AND THE PARTY BRINGING

20   THE ACTION WAS NOT SUBSTANTIALLY JUSTIFIED IN DOING SO.           FOR
21   PURPOSES OF THIS SECTION, A PROCEEDING IS SUBSTANTIALLY JUSTIFIED

22   IF IT HAD A REASONABLE BASIS IN LAW OR FACT AT THE TIME THAT IT WAS

23   INITIATED.

24           (d) THIS SECTION DOES NOT ABROGATE OR MODIFY COMMON LAW
25   OR STATUTORY PRIVILEGES OR IMMUNITIES ENJOYED BY A PERSON

26   DESCRIBED IN PARAGRAPH    (a) OF THIS SUBSECTION (4).
27           (e) PARAGRAPH (a) OF THIS SUBSECTION (4) DOES NOT APPLY TO


                                     -48-                                SB05-107
 1   A PERSON'S FURNISHING INFORMATION CONCERNING THE PERSON'S OWN

 2   SUSPECTED, ANTICIPATED, OR COMPLETED FRAUDULENT VIATICAL

 3   SETTLEMENT ACTS OR SUSPECTED, ANTICIPATED, OR COMPLETED

 4   FRAUDULENT INSURANCE ACTS.

 5         (5) (a) THE DOCUMENTS AND EVIDENCE PROVIDED PURSUANT TO
 6   SUBSECTION (4) OF THIS SECTION OR OBTAINED BY THE COMMISSIONER IN

 7   AN INVESTIGATION OF SUSPECTED OR ACTUAL FRAUDULENT VIATICAL

 8   SETTLEMENT ACTS ARE PRIVILEGED AND CONFIDENTIAL, ARE NOT A PUBLIC

 9   RECORD, AND ARE NOT SUBJECT TO DISCOVERY OR SUBPOENA IN A CIVIL OR

10   CRIMINAL ACTION.

11         (b) PARAGRAPH (a) OF THIS SUBSECTION (5) DOES NOT PROHIBIT
12   RELEASE BY THE COMMISSIONER OF DOCUMENTS AND EVIDENCE OBTAINED

13   IN AN INVESTIGATION OF SUSPECTED OR ACTUAL FRAUDULENT VIATICAL

14   SETTLEMENT ACTS:

15         (I) IN ADMINISTRATIVE OR JUDICIAL PROCEEDINGS TO ENFORCE
16   LAWS ADMINISTERED BY THE COMMISSIONER;

17         (II)   TO   FEDERAL, STATE, OR LOCAL LAW ENFORCEMENT OR

18   REGULATORY AGENCIES, TO AN ORGANIZATION ESTABLISHED FOR THE

19   PURPOSE OF DETECTING AND PREVENTING FRAUDULENT VIATICAL

20   SETTLEMENT ACTS, OR TO THE NAIC; OR

21         (III) AT THE DISCRETION OF THE COMMISSIONER, TO A PERSON IN
22   THE BUSINESS OF VIATICAL SETTLEMENTS THAT IS AGGRIEVED BY A

23   FRAUDULENT VIATICAL SETTLEMENT ACT.

24         (c)    RELEASE   OF DOCUMENTS AND EVIDENCE PURSUANT TO

25   PARAGRAPH (b) OF THIS SUBSECTION (5) DOES NOT ABROGATE OR MODIFY

26   THE PRIVILEGE GRANTED IN PARAGRAPH    (a) OF THIS SUBSECTION (5).
27         (6) THIS PART 6 DOES NOT:


                                    -49-                                 SB05-107
 1           (a) PREEMPT THE AUTHORITY OR RELIEVE THE DUTY OF OTHER LAW
 2   ENFORCEMENT OR REGULATORY AGENCIES TO INVESTIGATE, EXAMINE,

 3   AND PROSECUTE SUSPECTED VIOLATIONS OF LAW;

 4           (b)    PREVENT    OR PROHIBIT A PERSON FROM VOLUNTARILY

 5   DISCLOSING        INFORMATION   CONCERNING    FRAUDULENT       VIATICAL

 6   SETTLEMENT ACTS TO A LAW ENFORCEMENT OR REGULATORY AGENCY

 7   OTHER THAN THE DIVISION; OR

 8           (c) LIMIT THE POWERS GRANTED ELSEWHERE BY THE LAWS OF THIS
 9   STATE TO THE COMMISSIONER OR TO AN INSURANCE FRAUD UNIT TO

10   INVESTIGATE AND EXAMINE POSSIBLE VIOLATIONS OF LAW AND TO TAKE

11   APPROPRIATE ACTION AGAINST WRONGDOERS.

12           (7) (a)     A   VIATICAL SETTLEMENT PROVIDER SHALL ADOPT

13   ANTI-FRAUD INITIATIVES REASONABLY CALCULATED TO DETECT, ASSIST IN

14   THE PROSECUTION OF, AND PREVENT FRAUDULENT VIATICAL SETTLEMENT

15   ACTS.   THE COMMISSIONER MAY ORDER OR, IF A LICENSEE REQUESTS, MAY
16   GRANT MODIFICATIONS OF THE FOLLOWING INITIATIVES AS NECESSARY TO

17   ENSURE AN EFFECTIVE ANTI-FRAUD PROGRAM.       THE MODIFICATIONS MAY
18   BE MORE OR LESS RESTRICTIVE THAN THE INITIATIVES IF THE

19   MODIFICATIONS MAY REASONABLY BE EXPECTED TO ACCOMPLISH THE

20   PURPOSE OF THIS SECTION.     ANTI-FRAUD INITIATIVES INCLUDE:
21           (I) FRAUD INVESTIGATORS, WHO MAY BE VIATICAL SETTLEMENT
22   PROVIDERS OR EMPLOYEES OR INDEPENDENT CONTRACTORS OF THOSE

23   VIATICAL SETTLEMENT PROVIDERS; AND

24           (II)   AN    ANTI-FRAUD PLAN THAT IS SUBMITTED TO THE

25   COMMISSIONER.       THE   ANTI-FRAUD PLAN SHALL INCLUDE, BUT NOT BE

26   LIMITED TO:

27           (A) A CHART OUTLINING THE ORGANIZATIONAL ARRANGEMENT OF


                                        -50-                              SB05-107
 1   THE    ANTI-FRAUD    PERSONNEL    WHO    ARE   RESPONSIBLE    FOR   THE

 2   INVESTIGATION AND REPORTING OF POSSIBLE FRAUDULENT VIATICAL

 3   SETTLEMENT     ACTS    AND   INVESTIGATING     UNRESOLVED     MATERIAL

 4   INCONSISTENCIES      BETWEEN   MEDICAL    RECORDS    AND     INSURANCE

 5   APPLICATIONS; AND

 6          (B) A   DESCRIPTION OF THE PROCEDURES FOR DETECTING AND

 7   INVESTIGATING POSSIBLE FRAUDULENT VIATICAL SETTLEMENT ACTS AND

 8   PROCEDURES FOR RESOLVING MATERIAL INCONSISTENCIES BETWEEN

 9   MEDICAL RECORDS AND INSURANCE APPLICATIONS, A DESCRIPTION OF THE

10   PROCEDURES     FOR    REPORTING   POSSIBLE     FRAUDULENT     VIATICAL

11   SETTLEMENT ACTS TO THE COMMISSIONER , AND A DESCRIPTION OF THE

12   PLAN FOR ANTI-FRAUD EDUCATION AND TRAINING OF UNDERWRITERS AND

13   OTHER PERSONNEL.

14          (b) ANTI-FRAUD PLANS SUBMITTED TO THE COMMISSIONER ARE
15   PRIVILEGED AND CONFIDENTIAL, ARE NOT PUBLIC RECORDS PURSUANT TO

16   ARTICLE 72 OF TITLE 24, C.R.S., AND ARE NOT SUBJECT TO DISCOVERY OR

17   SUBPOENA IN A CIVIL OR CRIMINAL ACTION.

18          10-7-613. Penalties. (1) IN ADDITION TO THE PENALTIES AND
19   OTHER ENFORCEMENT PROVISIONS OF THIS PART 6, IF A PERSON VIOLATES

20   THE PROVISIONS OF THIS PART 6 OR ANY RULE IMPLEMENTING THIS PART

21   6,   THE COMMISSIONER MAY SEEK AN INJUNCTION IN A COURT OF

22   COMPETENT JURISDICTION AND MAY APPLY FOR TEMPORARY AND

23   PERMANENT ORDERS AS THE COMMISSIONER DETERMINES ARE NECESSARY

24   TO RESTRAIN THE PERSON FROM COMMITTING THE VIOLATION.

25          (2) A PERSON DAMAGED BY THE ACTS OF A PERSON IN VIOLATION
26   OF THIS PART   6    MAY BRING A CIVIL ACTION AGAINST THE PERSON

27   COMMITTING THE VIOLATION IN A COURT OF COMPETENT JURISDICTION.



                                       -51-                               SB05-107
 1         (3) THE COMMISSIONER MAY ISSUE A CEASE AND DESIST ORDER TO
 2   A PERSON WHO VIOLATES ANY PROVISION OF THIS PART 6 OR OF ANY RULE

 3   OR ORDER PROMULGATED BY, OR WRITTEN AGREEMENT ENTERED INTO

 4   WITH, THE COMMISSIONER PURSUANT TO THIS PART 6.

 5         (4)   WHEN    THE COMMISSIONER FINDS THAT AN ACTIVITY IN

 6   VIOLATION OF THIS PART    6   PRESENTS AN IMMEDIATE DANGER TO THE

 7   PUBLIC THAT REQUIRES AN IMMEDIATE FINAL ORDER, THE COMMISSIONER

 8   MAY ISSUE AN EMERGENCY CEASE AND DESIST ORDER RECITING WITH

 9   PARTICULARITY THE FACTS UNDERLYING THE FINDINGS.   THE EMERGENCY
10   CEASE AND DESIST ORDER IS EFFECTIVE IMMEDIATELY UPON SERVICE OF A

11   COPY OF THE ORDER ON THE RESPONDENT AND REMAINS EFFECTIVE FOR

12   NINETY DAYS. IF THE COMMISSIONER BEGINS NONEMERGENCY CEASE AND

13   DESIST PROCEEDINGS, THE EMERGENCY CEASE AND DESIST ORDER REMAINS

14   EFFECTIVE ABSENT AN ORDER BY A COURT OF COMPETENT JURISDICTION

15   PURSUANT TO THE "STATE ADMINISTRATIVE PROCEDURE ACT", ARTICLE

16   4 OF TITLE 24, C.R.S.
17         (5) IN ADDITION TO THE PENALTIES AND OTHER     ENFORCEMENT

18   PROVISIONS OF THIS PART   6,   A PERSON WHO VIOLATES THIS PART   6   IS

19   SUBJECT TO CIVIL PENALTIES OF UP TO TEN THOUSAND DOLLARS FOR EACH

20   VIOLATION PURSUANT TO AN ORDER OF THE COMMISSIONER.              THE
21   COMMISSIONER'S ORDER MAY REQUIRE A PERSON FOUND TO BE IN

22   VIOLATION OF THIS PART 6 TO MAKE RESTITUTION TO A PERSON AGGRIEVED

23   BY VIOLATIONS OF THIS PART 6.

24         (6) (a) A PERSON WHO VIOLATES A PROVISION OF THIS PART 6,
25   UPON CONVICTION, SHALL PAY RESTITUTION TO A PERSON AGGRIEVED BY

26   THE VIOLATION.   RESTITUTION SHALL BE ORDERED IN ADDITION TO A FINE
27   OR IMPRISONMENT, BUT NOT INSTEAD OF A FINE OR IMPRISONMENT.



                                       -52-                               SB05-107
 1           (b) A PERSON WHO VIOLATES A PROVISION OF THIS PART 6, UPON
 2   CONVICTION, SHALL BE SENTENCED BASED ON THE GREATER OF THE VALUE

 3   OF PROPERTY, SERVICES, OR OTHER BENEFITS WRONGFULLY OBTAINED OR

 4   ATTEMPTED TO BE OBTAINED, OR THE AGGREGATE ECONOMIC LOSS

 5   SUFFERED BY ANY PERSON AS A RESULT OF THE VIOLATION.     A PERSON
 6   SHALL BE FINED NOT MORE THAN:

 7           (I) ONE HUNDRED THOUSAND DOLLARS OR IMPRISONED FOR NOT
 8   MORE THAN TWENTY YEARS, OR BOTH, IF THE VALUE OF THE VIATICAL

 9   SETTLEMENT CONTRACT IS MORE THAN THIRTY-FIVE THOUSAND DOLLARS;

10           (II) TWENTY THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE
11   THAN TEN YEARS, OR BOTH, IF THE VALUE OF THE VIATICAL SETTLEMENT

12   CONTRACT IS MORE THAN TWO THOUSAND FIVE HUNDRED DOLLARS BUT

13   NOT MORE THAN THIRTY-FIVE THOUSAND DOLLARS;

14           (III) TEN   THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE

15   THAN FIVE YEARS, OR BOTH, IF THE VALUE OF THE VIATICAL SETTLEMENT

16   CONTRACT IS MORE THAN FIVE HUNDRED DOLLARS BUT NOT MORE THAN

17   TWO THOUSAND FIVE HUNDRED DOLLARS; OR

18           (IV) THREE THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE
19   THAN ONE YEAR, OR BOTH, IF THE VALUE OF THE VIATICAL SETTLEMENT

20   CONTRACT IS FIVE HUNDRED DOLLARS OR LESS.

21           (c) IN A PROSECUTION UNDER PARAGRAPH (a) OF THIS SUBSECTION
22   (6),   THE VALUE OF A VIATICAL SETTLEMENT CONTRACT WITHIN A

23   SIX-MONTH PERIOD MAY BE AGGREGATED AND THE DEFENDANT CHARGED

24   ACCORDINGLY IN APPLYING THE PROVISIONS OF THIS SECTION. IF TWO OR

25   MORE OFFENSES ARE COMMITTED BY THE SAME PERSON IN TWO OR MORE

26   COUNTIES, THE ACCUSED MAY BE PROSECUTED IN A COUNTY IN WHICH ONE

27   OF THE OFFENSES WAS COMMITTED FOR ALL OF THE OFFENSES



                                     -53-                             SB05-107
 1   AGGREGATED AS PROVIDED BY THIS SECTION. THE STATUTORY LIMITATION

 2   PERIOD DOES NOT BEGIN TO RUN UNTIL THE INSURANCE COMPANY OR LAW

 3   ENFORCEMENT AGENCY IS AWARE OF THE FRAUD, BUT THE PROSECUTION

 4   MAY NOT BE COMMENCED LATER THAN SEVEN YEARS AFTER THE ACT HAS

 5   OCCURRED.

 6         10-7-614. Unfair trade practices. (1) IT IS UNLAWFUL FOR ANY
 7   PERSON OR ENTITY LICENSED UNDER THIS TITLE TO PROHIBIT, RESTRICT,

 8   LIMIT, OR IMPAIR A LICENSED LIFE INSURANCE PRODUCER FROM AIDING

 9   AND ASSISTING THE OWNER OF A POLICY WITH A SETTLEMENT, OR

10   OTHERWISE PARTICIPATING IN A SETTLEMENT TRANSACTION UNDER THIS

11   PART 6; OR TO ENGAGE IN ANY TRANSACTION, ACT, PRACTICE, OR COURSE

12   OF BUSINESS OR DEALING THAT RESTRICTS, LIMITS, OR IMPAIRS IN ANY

13   WAY THE LAWFUL TRANSFER OF OWNERSHIP, CHANGE OF BENEFICIARY, OR

14   ASSIGNMENT OF A POLICY TO EFFECTUATE A SETTLEMENT CONTRACT.

15         (2) A VIOLATION OF THIS PART 6 SHALL CONSTITUTE AN UNFAIR
16   TRADE PRACTICE PURSUANT TO PART 11 OF ARTICLE 3 OF THIS TITLE, AND

17   SUBJECT TO THE PENALTIES CONTAINED IN SUCH PART 11.

18         10-7-615. Rules. (1) THE COMMISSIONER MAY:
19         (a) PROMULGATE RULES IMPLEMENTING THIS PART 6;
20         (b)       ESTABLISH   STANDARDS     FOR   EVALUATING    THE

21   REASONABLENESS OF PAYMENTS UNDER A VIATICAL SETTLEMENT

22   CONTRACT FOR A PERSON WHO IS TERMINALLY OR CHRONICALLY ILL. THIS

23   AUTHORITY INCLUDES, BUT IS NOT LIMITED TO, REGULATION OF DISCOUNT

24   RATES USED TO DETERMINE THE AMOUNT PAID IN EXCHANGE FOR

25   ASSIGNMENT, TRANSFER, SALE, DEVISE, OR BEQUEST OF A BENEFIT UNDER

26   A POLICY.   IF THE INSURED IS NOT TERMINALLY OR CHRONICALLY ILL, A
27   VIATICAL SETTLEMENT PROVIDER SHALL PAY AN AMOUNT GREATER THAN



                                     -54-                            SB05-107
 1   THE CASH SURRENDER VALUE OR ACCELERATED DEATH BENEFIT THEN

 2   AVAILABLE.

 3         (c) ESTABLISH APPROPRIATE LICENSING REQUIREMENTS, FEES, AND
 4   STANDARDS FOR CONTINUED LICENSURE FOR A VIATICAL SETTLEMENT

 5   PROVIDER AND A FEE FOR LIFE INSURANCE PRODUCERS;

 6         (d) REQUIRE      A BOND OR OTHER MECHANISM FOR FINANCIAL

 7   ACCOUNTABILITY FOR A VIATICAL SETTLEMENT PROVIDER; AND

 8         (e)      ADOPT      RULES   GOVERNING   THE    RELATIONSHIP      AND

 9   RESPONSIBILITIES OF AN INSURER AND A VIATICAL SETTLEMENT PROVIDER,

10   A LIFE INSURANCE PRODUCER, AND OTHERS IN THE BUSINESS OF VIATICAL

11   SETTLEMENTS DURING THE PERIOD OF CONSIDERATION OR EFFECTUATION

12   OF A VIATICAL SETTLEMENT CONTRACT.

13         10-7-616. No preemption - Colorado Securities Act - authority
14   of the division of securities. NOTHING     IN THIS PART   6   PREEMPTS OR

15   OTHERWISE LIMITS THE PROVISIONS OF THE "COLORADO SECURITIES ACT",

16   ARTICLE   51   OF TITLE   11, C.R.S.,   OR ANY RULES, ORDERS, POLICY

17   STATEMENTS, NOTICES, BULLETINS, OR OTHER INTERPRETATIONS ISSUED

18   BY   OR   THROUGH      THE   COMMISSIONER     OF    SECURITIES    OR   THE

19   COMMISSIONER OF SECURITIES' DESIGNEE ACTING PURSUANT TO THE

20   "COLORADO SECURITIES ACT". COMPLIANCE WITH THIS PART 6 DOES NOT
21   CONSTITUTE COMPLIANCE WITH ANY APPLICABLE PROVISION OF THE

22   "COLORADO SECURITIES ACT"           OR ANY RULES, ORDERS, POLICY

23   STATEMENTS, NOTICES, BULLETINS, OR OTHER INTERPRETATIONS ISSUED

24   BY   OR     THROUGH    THE   COMMISSIONER     OF    SECURITIES    OR   THE

25   COMMISSIONER OF SECURITIES' DESIGNEE ACTING PURSUANT TO THE

26   "COLORADO SECURITIES ACT".
27         10-7-617. Application. A          VIATICAL SETTLEMENT PROVIDER



                                        -55-                                 SB05-107
 1   LAWFULLY TRANSACTING BUSINESS IN THIS STATE MAY CONTINUE TO DO

 2   SO PENDING APPROVAL OR DISAPPROVAL OF THE PERSON'S APPLICATION

 3   FOR A LICENSE AS LONG AS THE APPLICATION IS FILED WITH THE

 4   COMMISSIONER NOT LATER THAN THIRTY DAYS AFTER PUBLICATION BY

 5   THE COMMISSIONER OF AN APPLICATION FORM FOR LICENSURE OF VIATICAL

 6   SETTLEMENT PROVIDERS. IF THE PUBLICATION OF THE APPLICATION FORM

 7   IS PRIOR TO THE EFFECTIVE DATE OF THIS PART       6,   THE FILING OF THE

 8   APPLICATION SHALL NOT BE LATER THAN THIRTY DAYS AFTER THE

 9   EFFECTIVE DATE OF THIS PART 6.

10          10-7-618. Continuation of business. NOTWITHSTANDING ANY
11   PROVISION OF THIS PART     6   TO THE CONTRARY, A PERSON WHO HAS

12   LAWFULLY NEGOTIATED VIATICAL SETTLEMENT CONTRACTS BETWEEN A

13   VIATOR AND ONE OR MORE VIATICAL SETTLEMENT PROVIDERS FOR AT

14   LEAST ONE YEAR IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THIS

15   PART   6   MAY CONTINUE TO NEGOTIATE VIATICAL SETTLEMENTS IN THIS

16   STATE FOR A PERIOD OF ONE YEAR FROM THE EFFECTIVE DATE OF THIS

17   PART 6 IF SUCH PERSON REGISTERS WITH THE COMMISSIONER ON A FORM

18   PRESCRIBED BY THE COMMISSIONER. SUCH REGISTRATION FORM SHALL BE

19   PUBLISHED BY THE COMMISSIONER NOT LATER THAN THIRTY DAYS AFTER

20   THE EFFECTIVE DATE OF THIS PART        6   AND SHALL REQUIRE A PERSON

21   REGISTERING TO EVIDENCE THAT HE OR SHE HAS LAWFULLY NEGOTIATED

22   VIATICAL SETTLEMENT CONTRACTS.        THE FORM SHALL ALSO INCLUDE AN
23   ACKNOWLEDGMENT BY SUCH PERSON THAT HE OR SHE WILL OPERATE IN

24   ACCORDANCE WITH AND COMPLY WITH THIS PART 6.

25          10-7-619. Viatical settlements cash fund - created. ALL DIRECT
26   AND INDIRECT EXPENDITURES OF THE COMMISSIONER AND THE DIVISION IN

27   ADMINISTERING THIS PART        6   SHALL BE PAID FROM THE VIATICAL



                                         -56-                              SB05-107
 1   SETTLEMENTS CASH FUND, WHICH FUND IS HEREBY CREATED IN THE STATE

 2   TREASURY.     ALL FEES COLLECTED PURSUANT TO THIS PART 6 SHALL BE
 3   TRANSMITTED TO THE STATE TREASURER, WHO SHALL CREDIT THEM TO THE

 4   VIATICAL SETTLEMENTS CASH FUND.           ALL   MONEYS CREDITED TO THE

 5   VIATICAL SETTLEMENTS CASH FUND SHALL BE USED AS PROVIDED IN THIS

 6   SECTION, SHALL NOT BE DEPOSITED IN OR TRANSFERRED TO THE GENERAL

 7   FUND OF THIS STATE OR TO ANY OTHER FUND, AND SHALL BE SUBJECT TO

 8   ANNUAL APPROPRIATION BY THE GENERAL ASSEMBLY FOR THE PURPOSE OF

 9   DEFRAYING THE EXPENSES OF THE COMMISSIONER AND THE DIVISION IN

10   ADMINISTERING THIS PART 6.     ALL INTEREST DERIVED FROM THE DEPOSIT
11   AND INVESTMENT OF MONEYS IN THE VIATICAL SETTLEMENTS CASH FUND

12   SHALL BE CREDITED TO THE VIATICAL SETTLEMENTS CASH FUND.

13          10-7-620. Severability. IF ANY PROVISION OF THIS PART 6 IS FOR
14   ANY REASON HELD TO BE UNCONSTITUTIONAL OR INVALID, SUCH HOLDING

15   SHALL NOT AFFECT THE CONSTITUTIONALITY OR VALIDITY OF THE

16   REMAINING PROVISIONS OF THIS PART 6, AND TO THIS END THE PROVISIONS

17   OF THIS PART 6 ARE EXPRESSLY DECLARED TO BE SEVERABLE.

18          SECTION 2. 11-51-201 (17), Colorado Revised Statutes, is
19   amended, and the said 11-51-201 is further amended BY THE
20   ADDITION OF A NEW SUBSECTION, to read:
21          11-51-201. Definitions. As used in this article, unless the context
22   otherwise requires:
23          (17) "Security" means any note; stock; treasury stock; bond;
24   debenture; evidence of indebtedness; certificate of interest or
25   participation in any profit-sharing agreement; collateral-trust certificate;
26   preorganization certificate of subscription; transferable share; investment
27   contract;   VIATICAL SETTLEMENT INVESTMENT;        voting-trust certificate;


                                        -57-                                   SB05-107
 1   certificate of deposit for a security; certificate of interest or participation
 2   in an oil, gas, or mining title or lease or in payments out of production
 3   under such a title or lease; or, in general, any interest or instrument
 4   commonly known as a "security" or any certificate of interest or
 5   participation in, temporary or interim certificate for, guarantee of, or
 6   warrant or right to subscribe to or purchase any of the foregoing.
 7   "Security" does not include any insurance or endowment policy or
 8   annuity contract under which an insurance company promises to pay a
 9   sum of money either in a lump sum or periodically for life or some other
10   specified period. For purposes of this article, an "investment contract"
11   need not involve more than one investor nor be limited to those
12   circumstances wherein there are multiple investors who are joint
13   participants in the same enterprise.
14          (20)      "VIATICAL     SETTLEMENT      INVESTMENT"      MEANS     THE

15   CONTRACTUAL RIGHT TO RECEIVE ANY PORTION OF THE DEATH BENEFIT OR

16   OWNERSHIP OF A LIFE INSURANCE POLICY OR CERTIFICATE, IN EXCHANGE

17   FOR CONSIDERATION THAT IS LESS THAN THE EXPECTED DEATH BENEFIT OF

18   THE LIFE INSURANCE POLICY OR CERTIFICATE.           "VIATICAL SETTLEMENT
19   INVESTMENT" DOES NOT INCLUDE:

20          (a) ANY      TRANSACTION BETWEEN A VIATOR AND A VIATICAL

21   SETTLEMENT PROVIDER AS DEFINED BY SECTION 10-7-602, C.R.S.;

22          (b) ANY TRANSFER OF OWNERSHIP OR BENEFICIAL INTEREST IN A
23   LIFE INSURANCE POLICY FROM A VIATICAL SETTLEMENT PROVIDER TO

24   ANOTHER VIATICAL SETTLEMENT PROVIDER AS DEFINED BY SECTION

25   10-7-602, C.R.S.,   OR TO ANY LEGAL ENTITY FORMED SOLELY FOR THE

26   PURPOSE OF HOLDING OWNERSHIP OR BENEFICIAL INTEREST IN A LIFE

27   INSURANCE POLICY OR POLICIES;



                                          -58-                                    SB05-107
 1          (c) THE BONA FIDE ASSIGNMENT OF A LIFE INSURANCE POLICY TO
 2   A BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION,

 3   OR OTHER LICENSED LENDING INSTITUTION AS COLLATERAL FOR A LOAN;

 4   OR

 5          (d) THE EXERCISE OF ACCELERATED BENEFITS PURSUANT TO THE
 6   TERMS OF A LIFE INSURANCE POLICY ISSUED IN ACCORDANCE WITH TITLE

 7   10, C.R.S.
8           SECTION 3. Effective date - applicability. This act shall take
9    effect January 1, 2006, and shall apply to viatical settlements offered or
10   entered into on or after said date.
11          SECTION 4. Safety clause. The general assembly hereby finds,
12   determines, and declares that this act is necessary for the immediate
13   preservation of the public peace, health, and safety.




                                           -59-                              SB05-107

								
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