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					                                First Regular Session
                            Sixty-fifth General Assembly
                            STATE OF COLORADO
                                                                                REREVISED
                                                              This Version Includes All Amendments
                                                                       Adopted in the Second House
LLS NO. 05-0493.01 Thomas Morris                                       SENATE BILL05-107
                             SENATE SPONSORSHIP
 Owen,

                              HOUSE SPONSORSHIP
 Jahn,




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                                      A BILL FOR AN ACT                                                   d
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101      CONCERNING THE AUTHORIZATION OF VIATICAL SETTLEMENTS, AND,                                   U
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102             IN CONNECTION THEREWITH, PROTECTING THE RIGHTS OF A                                       d
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103             LIFE INSURANCE POLICY OWNER TO SEEK A VIATICAL
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104             SE T T L E M E NT ,     REGULATING              VIATICAL          SE T T L E M E NT
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105             TRANSACTIONS, LICENSING VIATICAL SETTLEMENT PROVIDERS,
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106             REQUIRING ANTI-FRAUD MEASURES,                        SPECIFYING PENALTIES,               e
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107             AND MAKING AN APPROPRIATION THEREFOR.                                                 E
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                                            Bill Summary                                              S   d
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               (Note: This summary applies to this bill as introduced and does                            3
         not necessarily reflect any amendments that may be subsequently
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                Creates the "Viatical Settlements Act". Authorizes the owner of                       E   0 e
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             Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.            E   1l d
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                    Capital letters indicate new material to be added to existing statute.                A n
                    Dashes through the words indicate deletions from existing statute.
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    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-                                        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-                                    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-                                   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-                                 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-                            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-                                  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-                                   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-                                  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-                                  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 THE INSURER THAT ISSUED THE POLICY

10   BEING VIATICATED SHALL NOT BE RESPONSIBLE FOR ANY ACT OR OMISSION

11   OF A LIFE INSURANCE PRODUCER OR VIATICAL SETTLEMENT PROVIDER

12   ARISING OUT OF OR IN CONNECTION WITH THE VIATICAL SETTLEMENT

13   TRANSACTION, UNLESS THE INSURER RECEIVES COMPENSATION FROM THE

14   VIATICAL SETTLEMENT PROVIDER OR LIFE INSURANCE PRODUCER FOR THE

15   VIATICAL SETTLEMENT CONTRACT.

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

18   FINANCIAL PLANNER ACCREDITED BY A NATIONALLY RECOGNIZED

19   ACCREDITATION AGENCY, WHO IS RETAINED TO REPRESENT THE VIATOR

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

21   VIATICAL SETTLEMENT PROVIDER MAY NEGOTIATE VIATICAL SETTLEMENT

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

23   PRODUCER.

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

25   PROVIDER WITHOUT FIRST OBTAINING A VIATICAL SETTLEMENT PROVIDER

26   LICENSE FROM THE COMMISSIONER.

27         (b) APPLICATION FOR A VIATICAL SETTLEMENT PROVIDER LICENSE


                                    -11-                                 107
 1   SHALL BE MADE TO THE COMMISSIONER ON A FORM PRESCRIBED BY THE

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

 3   TO BE DETERMINED BY THE COMMISSIONER BY RULE.

 4         (c) A LICENSE MAY BE RENEWED FROM YEAR TO YEAR, ON THE
 5   ANNIVERSARY DATE OF INITIAL ISSUANCE, UPON PAYMENT OF AN ANNUAL

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

 8   THE LICENSE.

 9
10         (d)   THE   APPLICANT FOR A VIATICAL SETTLEMENT PROVIDER

11   LICENSE SHALL PROVIDE INFORMATION ON FORMS PRESCRIBED BY THE

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

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

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

16   WHOSE SHARES ARE PUBLICLY TRADED, AND THE COMMISSIONER MAY

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

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

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

20   CONDUCT MEETS THE STANDARDS OF THIS ARTICLE.

21         (e)   A   LICENSE ISSUED TO A LEGAL ENTITY AUTHORIZES ALL

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

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

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

25   SUPPLEMENTS TO THE APPLICATION.

26         (f) UPON THE FILING OF AN APPLICATION AND THE PAYMENT OF THE
27   LICENSE FEE, THE COMMISSIONER SHALL MAKE AN INVESTIGATION OF EACH



                                    -12-                                  107
 1   APPLICANT AND ISSUE A LICENSE IF THE COMMISSIONER FINDS THAT THE

 2   APPLICANT:

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

 6   APPLICATION WAS SUBMITTED;

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

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

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

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

11   STANDING FROM THE STATE OF ITS DOMICILE; AND

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

13   REQUIREMENTS OF THIS PART 6.

14         (g)     THE   COMMISSIONER MAY NOT ISSUE A LICENSE TO A

15   NONRESIDENT APPLICANT UNLESS A WRITTEN DESIGNATION OF AN AGENT

16   FOR SERVICE OF PROCESS IS FILED AND MAINTAINED WITH THE

17   COMMISSIONER OR UNLESS THE APPLICANT HAS FILED WITH THE

18   COMMISSIONER THE APPLICANT'S WRITTEN, IRREVOCABLE CONSENT THAT

19   ANY ACTION AGAINST THE APPLICANT MAY BE COMMENCED AGAINST THE

20   APPLICANT BY SERVICE OF PROCESS ON THE COMMISSIONER.

21         (h) A VIATICAL SETTLEMENT PROVIDER SHALL PROVIDE TO THE
22   COMMISSIONER NEW OR REVISED INFORMATION ABOUT OFFICERS,

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

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

25   EMPLOYEES WITHIN THIRTY DAYS AFTER THE CHANGE.

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


                                     -13-                                     107
 1   SUSPEND, REVOKE, OR REFUSE TO RENEW THE LICENSE OF A VIATICAL

 2   SETTLEMENT PROVIDER IF THE COMMISSIONER FINDS AFTER COMPLIANCE

 3   WITH SUBSECTION (3) OF THIS SECTION THAT:

 4         (a)   THERE    WAS ANY MATERIAL MISREPRESENTATION IN THE

 5   APPLICATION FOR THE LICENSE;

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

 8   OR DISHONEST PRACTICES, IS SUBJECT TO A FINAL ADMINISTRATIVE

 9   ACTION, OR IS OTHERWISE SHOWN TO BE UNTRUSTWORTHY OR

10   INCOMPETENT;

11         (c) THE LICENSEE DEMONSTRATES A PATTERN OF UNREASONABLE
12   PAYMENTS TO VIATORS;

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

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

16   MISDEMEANOR INVOLVING FRAUD OR MORAL TURPITUDE, REGARDLESS OF

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

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

20         (f)   THE   LICENSEE HAS FAILED TO HONOR CONTRACTUAL

21   OBLIGATIONS SET OUT IN A VIATICAL SETTLEMENT CONTRACT;

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

23   INITIAL LICENSURE;

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

26   PROVIDER LICENSED IN THIS STATE; AN ACCREDITED INVESTOR OR

27   QUALIFIED INSTITUTIONAL BUYER AS DEFINED, RESPECTIVELY, IN



                                    -14-                                 107
1    REGULATION D, RULE 501, OR RULE 144A OF THE FEDERAL "SECURITIES

2    ACT OF 1933", AS AMENDED; A FINANCING ENTITY; A SPECIAL PURPOSE
3    ENTITY; OR A RELATED PROVIDER TRUST; OR

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

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

6    INSURANCE PRODUCER ACTING ON BEHALF OF THE APPLICANT OR

7    LICENSEE, HAS VIOLATED THIS PART 6.

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

9    RENEW THE LICENSE OF A LIFE INSURANCE PRODUCER IF THE

10   COMMISSIONER FINDS THAT SUCH LIFE INSURANCE PRODUCER HAS

11   VIOLATED THIS PART 6.

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

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

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

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

16   CONDUCT A HEARING IN ACCORDANCE WITH THE "STATE ADMINISTRATIVE

17   PROCEDURE ACT",     ARTICLE   4   OF TITLE   24, C.R.S.,   AND MAY USE A

18   HEARING OFFICER PURSUANT TO SECTION 10-1-127.

19         10-7-605. Forms approval. A PERSON MAY NOT USE A VIATICAL
20   SETTLEMENT CONTRACT OR PROVIDE TO A VIATOR A DISCLOSURE

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

22   FIRST FILED WITH AND APPROVED BY THE COMMISSIONER .                 ANY
23   SETTLEMENT CONTRACT FORM OR DISCLOSURE FORM FILED WITH THE

24   COMMISSIONER SHALL BE DEEMED APPROVED IF IT HAS NOT BEEN

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

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



                                        -15-                                    107
 1   CONTRACT OR PROVISIONS CONTAINED IN IT ARE UNREASONABLE,

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

 3   TO THE VIATOR.

 4         10-7-606. Annual reports. (1) EACH       VIATICAL SETTLEMENT

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

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

 9   STATE AND DOES NOT INCLUDE INDIVIDUAL TRANSACTION DATA

10   REGARDING THE BUSINESS OF VIATICAL SETTLEMENTS OR DATA THAT

11   COMPROMISES THE PRIVACY OF PERSONAL, FINANCIAL, OR HEALTH

12   INFORMATION OF THE VIATOR OR INSURED.

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

14   VIATICAL    SETTLEMENT   PROVIDER ,    LIFE   INSURANCE   PRODUCER,

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

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

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

18   INSURED'S FINANCIAL OR MEDICAL INFORMATION TO ANOTHER PERSON

19   UNLESS THE DISCLOSURE IS:

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

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

24         (b)    PROVIDED    IN RESPONSE TO AN INVESTIGATION OR

25   EXAMINATION BY THE COMMISSIONER OR ANOTHER GOVERNMENTAL

26   OFFICER OR AGENCY OR PURSUANT TO THIS ARTICLE;

27         (c) A TERM OF OR CONDITION TO THE TRANSFER OF A POLICY BY


                                    -16-                                    107
 1   ONE VIATICAL SETTLEMENT PROVIDER TO ANOTHER VIATICAL SETTLEMENT

 2   PROVIDER;

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

 4   PROVIDER TRUST, OR SPECIAL PURPOSE ENTITY TO FINANCE THE PURCHASE

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

 6   INSURED HAVE PROVIDED PRIOR WRITTEN CONSENT TO THE DISCLOSURE;

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

 9   PURPOSE OF DETERMINING HEALTH STATUS; OR

10         (f) REQUIRED TO PURCHASE STOP LOSS-COVERAGE.
11         10-7-607. Examinations. (1) Authority, scope, and scheduling
12   of examinations.     (a)     THE   COMMISSIONER MAY CONDUCT AN

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

14   COMMISSIONER IN HIS OR HER SOLE DISCRETION DEEMS APPROPRIATE.

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

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

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

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

19   COMMISSIONER, NECESSARY OR MATERIAL TO THE EXAMINATION OF THE

20   LICENSEE.

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

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

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

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

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

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



                                        -17-                                 107
1    ALL:

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

 3   UNDERWRITING DOCUMENTS, POLICY FORMS, AND APPLICATIONS FROM THE

 4   DATE OF THE PROPOSAL, OFFER, OR EXECUTION OF THE CONTRACT,

 5   WHICHEVER IS LATER;

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

 8   FROM THE DATE OF THE TRANSACTION; AND

 9          (III)   OTHER   RECORDS AND DOCUMENTS RELATED TO THE

10   REQUIREMENTS OF THIS PART 6.

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

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

14   EXPIRED IF THE PERSON HAS RETAINED THE DOCUMENTS.

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

17   PHOTOGRAPH, MICROPROCESS, MAGNETIC, MECHANICAL, OR ELECTRONIC

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

19   A DURABLE MEDIUM FOR THE REPRODUCTION OF A RECORD.

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

22   AN EXAMINATION WARRANT APPOINTING ONE OR MORE EXAMINERS TO

23   PERFORM THE EXAMINATION AND INSTRUCTING THE EXAMINER AS TO THE

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

25   EXAMINER SHALL OBSERVE THOSE GUIDELINES AND PROCEDURES SET

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



                                    -18-                                    107
1    PROCEDURES AS THE COMMISSIONER MAY DEEM APPROPRIATE.

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

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

 4   THE EXAMINERS TIMELY, CONVENIENT, AND FREE ACCESS AT ALL

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

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

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

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

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

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

13   REASONABLE WRITTEN REQUEST OF THE COMMISSIONER SHALL BE

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

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

16   SETTLEMENT    BUSINESS   OR   OTHER    BUSINESS   SUBJECT    TO   THE

17   COMMISSIONER'S JURISDICTION.    ANY    PROCEEDINGS FOR SUSPENSION,

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

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

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

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

25   COMMISSIONER MAY PETITION A COURT OF COMPETENT JURISDICTION AND,

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

27   THE WITNESS TO APPEAR AND TESTIFY OR PRODUCE DOCUMENTARY



                                     -19-                                    107
 1   EVIDENCE.   FAILURE TO OBEY THE COURT ORDER SHALL BE PUNISHABLE AS
 2   CONTEMPT OF COURT.

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

 4   COMMISSIONER MAY RETAIN ATTORNEYS, APPRAISERS, INDEPENDENT

 5   ACTUARIES, INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, OR OTHER

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

 8   IS THE SUBJECT OF THE EXAMINATION.

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

11   EXAMINATION IN ORDER TO PURSUE OTHER LEGAL OR REGULATORY ACTION

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

14   PRIMA FACIE EVIDENCE IN ANY LEGAL OR REGULATORY ACTION.

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

17   MAKE PUBLIC ANY FINAL OR PRELIMINARY EXAMINATION REPORT, ANY

18   EXAMINER OR LICENSEE WORKPAPERS OR OTHER DOCUMENTS, OR ANY

19   OTHER INFORMATION DISCOVERED OR DEVELOPED DURING THE COURSE OF

20   ANY EXAMINATION IN THE FURTHERANCE OF ANY LEGAL OR REGULATORY

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

22   DEEM APPROPRIATE.

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

24   EXAMINATION, INCLUDING THE EXPENSES OF THE COMMISSIONER OR THE

25   COMMISSIONER'S DESIGNEE AND THE EXPENSES AND COMPENSATION OF

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

27   BELIEVES THAT THE FEES ASSESSED ARE UNREASONABLE IN RELATION TO



                                     -20-                                    107
 1   THE EXAMINATION PERFORMED, THE LICENSEE MAY APPEAL THE

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

 3   AND FOR THE CITY AND COUNTY OF   DENVER PURSUANT TO THE "STATE
 4   ADMINISTRATIVE PROCEDURE ACT", ARTICLE 4 OF TITLE 24, C.R.S. IF NO
 5   HEARING IS REQUESTED OR, IF AFTER A HEARING AND APPEAL PROCESS, THE

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

 7   SHALL PROMPTLY INSTITUTE A CIVIL ACTION AGAINST THE LICENSEE TO

8    RECOVER THE EXPENSES OF EXAMINATION.

 9         (4) Examination reports. (a) EXAMINATION REPORTS SHALL
10   CONSIST ONLY OF FACTS APPEARING UPON THE BOOKS, RECORDS, OR

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

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

13   AGENTS OR OTHER PERSONS EXAMINED CONCERNING ITS AFFAIRS, AND

14   SUCH CONCLUSIONS AND RECOMMENDATIONS AS THE EXAMINERS FIND

15   REASONABLY WARRANTED FROM THE FACTS.

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

18   COMMISSIONER A VERIFIED WRITTEN REPORT OF EXAMINATION UNDER

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

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

21   NOTICE THAT SHALL AFFORD THE LICENSEE EXAMINED A REASONABLE

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

23   SUBMISSION OR REBUTTAL WITH RESPECT TO ANY MATTERS CONTAINED IN

24   THE EXAMINATION REPORT.

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

27   COMMISSIONER SHALL FULLY CONSIDER AND REVIEW THE REPORT,



                                    -21-                                   107
 1   TOGETHER WITH ANY WRITTEN SUBMISSIONS OR REBUTTALS AND ANY

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

 3   ORDER:

 4         (I) ADOPTING      THE EXAMINATION REPORT AS FILED OR WITH

 5   MODIFICATION OR CORRECTIONS. IF THE EXAMINATION REPORT REVEALS

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

 7   PRIOR ORDER OF THE COMMISSIONER, THE COMMISSIONER MAY ORDER THE

 8   LICENSEE TO TAKE ANY ACTION THE COMMISSIONER CONSIDERS

9    NECESSARY AND APPROPRIATE TO CURE THE VIOLATION.

10         (II) REJECTING THE EXAMINATION REPORT WITH DIRECTIONS TO
11   THE EXAMINERS TO REOPEN THE EXAMINATION FOR PURPOSES OF

12   OBTAINING ADDITIONAL DATA, DOCUMENTATION, OR INFORMATION AND

13   REFILING; OR

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

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

16   OBTAINING ADDITIONAL DOCUMENTATION, DATA, INFORMATION, AND

17   TESTIMONY.

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

20   THE COMMISSIONER'S CONSIDERATION AND REVIEW OF THE EXAMINATION

21   REPORT, THE RELEVANT EXAMINER WORKPAPERS, AND ANY WRITTEN

22   SUBMISSIONS OR REBUTTALS.       ANY     EXAMINATION WARRANT ISSUED

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

24   BE CONSIDERED A FINAL ADMINISTRATIVE DECISION, REVIEW OF WHICH

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

26   COUNTY OF      DENVER    PURSUANT TO THE     "STATE ADMINISTRATIVE
27   PROCEDURE ACT", ARTICLE 4 OF TITLE 24, C.R.S., AND SHALL BE SERVED


                                      -22-                                107
 1   UPON THE LICENSEE BY CERTIFIED MAIL TOGETHER WITH A COPY OF THE

 2   ADOPTED EXAMINATION REPORT.        WITHIN    THIRTY DAYS AFTER THE

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

 4   EXECUTED BY EACH OF ITS DIRECTORS STATING UNDER OATH THAT THEY

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

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

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

10   SHALL    BE   CONDUCTED    AS   A NONADVERSARIAL,     CONFIDENTIAL

11   INVESTIGATORY PROCEEDING AS NECESSARY FOR THE RESOLUTION OF ANY

12   INCONSISTENCIES, DISCREPANCIES, OR DISPUTED ISSUES APPARENT UPON

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

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

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

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

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

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

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

24   THE COMMISSIONER OR THE COMMISSIONER'S REPRESENTATIVE MAY ISSUE
25   SUBPOENAS FOR THE ATTENDANCE OF ANY WITNESSES OR THE PRODUCTION

26   OF ANY DOCUMENTS CONSIDERED RELEVANT TO THE INVESTIGATION,

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



                                     -23-                                 107
 1   OTHER PERSONS.   THE DOCUMENTS PRODUCED SHALL BE INCLUDED IN THE
 2   RECORD, AND TESTIMONY TAKEN BY THE COMMISSIONER OR THE

 3   COMMISSIONER'S REPRESENTATIVE SHALL BE UNDER OATH AND PRESERVED

 4   FOR THE RECORD.   NOTHING CONTAINED IN THIS SECTION SHALL REQUIRE
 5   THE COMMISSIONER TO DISCLOSE ANY INFORMATION OR RECORDS THAT

 6   WOULD INDICATE OR SHOW THE EXISTENCE OR CONTENT OF ANY

 7   INVESTIGATION OR ACTIVITY OF A CRIMINAL JUSTICE AGENCY.

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

10   PERSONS SUBPOENAED.    THEREAFTER, THE LICENSEE AND THE DIVISION
11   MAY   PRESENT     TESTIMONY   RELEVANT    TO   THE    INVESTIGATION.

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

14   COMMISSIONER SHALL BE PERMITTED TO MAKE CLOSING STATEMENTS AND

15   MAY BE REPRESENTED BY COUNSEL OF THEIR CHOICE.

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

18   MAY INITIATE ANY PROCEEDINGS OR ACTIONS PROVIDED BY LAW.

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

20   CONSTRUED AS PROHIBITING THE COMMISSIONER FROM DISCLOSING THE

21   CONTENT OF AN EXAMINATION REPORT, A PRELIMINARY EXAMINATION

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

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

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

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

26   WRITTEN AGREEMENT OF THE RECIPIENT TO HOLD SUCH INFORMATION

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



                                    -24-                                    107
 1   6.
 2         (5) Confidentiality of examination information. (a) NAMES
 3   AND INDIVIDUAL IDENTIFICATION DATA FOR ALL VIATORS SHALL BE

 4   CONSIDERED PRIVATE AND CONFIDENTIAL INFORMATION AND SHALL NOT

 5   BE DISCLOSED BY THE COMMISSIONER UNLESS REQUIRED BY LAW.

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

 7   EXAMINATION REPORTS, WORKING PAPERS, RECORDED INFORMATION, AND

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

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

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

11   ANALYSIS OR INVESTIGATION BY THE COMMISSIONER OF THE FINANCIAL

12   CONDITION OR MARKET CONDUCT OF A LICENSEE, ARE:

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

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

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

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

22   DUTIES.

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

25   SUBSTANTIALLY SIMILAR TO THIS PART 6.

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



                                     -25-                                    107
 1   POSSESSION OR CONTROL OF THE        NAIC   AND ITS AFFILIATES AND

2    SUBSIDIARIES ARE:

 3         (I) CONFIDENTIAL BY LAW AND PRIVILEGED;
 4         (II) NOT SUBJECT TO SUBPOENA; AND
 5         (III) NOT SUBJECT TO DISCOVERY OR ADMISSIBLE IN EVIDENCE IN
6    ANY PRIVATE CIVIL ACTION IF THEY ARE:

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

10   COMMISSIONER IN THE ANALYSIS OR INVESTIGATION OF THE FINANCIAL

11   CONDITION OR MARKET CONDUCT OF A LICENSEE; OR

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

15   DOCUMENTS, MATERIAL, OR OTHER INFORMATION WHILE ACTING UNDER

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

18   CIVIL ACTION CONCERNING ANY CONFIDENTIAL DOCUMENTS, MATERIALS,

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

21   COMMISSIONER'S DUTIES, THE COMMISSIONER:

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

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

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

27   WITH STATE, FEDERAL, AND INTERNATIONAL LAW ENFORCEMENT



                                     -26-                                       107
 1   AUTHORITIES      IF    THE   RECIPIENT     AGREES    TO    MAINTAIN     THE

 2   CONFIDENTIALITY AND PRIVILEGED STATUS OF THE DOCUMENT, MATERIAL,

 3   COMMUNICATION, OR OTHER INFORMATION;

 4         (II) MAY RECEIVE DOCUMENTS, MATERIALS, COMMUNICATIONS, OR
 5   INFORMATION, INCLUDING OTHERWISE CONFIDENTIAL AND PRIVILEGED

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

 7   AFFILIATES AND SUBSIDIARIES, AND FROM REGULATORY AND LAW

 8   ENFORCEMENT OFFICIALS OF OTHER FOREIGN OR DOMESTIC JURISDICTIONS,

 9   AND SHALL MAINTAIN AS CONFIDENTIAL OR PRIVILEGED ANY DOCUMENT,

10   MATERIAL,   OR        INFORMATION   RECEIVED      WITH    NOTICE   OR   THE

11   UNDERSTANDING THAT IT IS CONFIDENTIAL OR PRIVILEGED UNDER THE

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

13   MATERIAL, OR INFORMATION; AND

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

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

17   CONFIDENTIALITY IN THE DOCUMENTS, MATERIALS, OR INFORMATION

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

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

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

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

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

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

27   CONTENT OF AN EXAMINATION REPORT, A PRELIMINARY EXAMINATION



                                         -27-                                      107
 1   REPORT OR ITS RESULTS, OR ANY RELATED MATTER TO THE COMMISSIONER

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

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

 4   ANY TIME, OR TO THE NAIC, IF THE PERSON RECEIVING THE REPORT OR

 5   MATTERS RELATING THERETO AGREES IN WRITING TO HOLD IT

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

 7         (i) NOTHING     IN THIS PART   6   SHALL IMMUNIZE A PARTY WHO

 8   DISCLOSES INFORMATION TO THE COMMISSIONER FROM DISCLOSING THAT

 9   INFORMATION PURSUANT TO AN INDEPENDENT INQUIRY OR RESTRICT THE

10   ADMISSIBILITY OF SUCH INDEPENDENTLY OBTAINED INFORMATION.

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

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

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

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

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

17         (I) A VIATOR;
18         (II) AN INSURED IN A VIATICATED POLICY; OR
19         (III) A BENEFICIARY IN AN INSURANCE POLICY THAT IS PROPOSED
20   TO BE THE SUBJECT OF A VIATICAL SETTLEMENT CONTRACT.

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

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

24   PUBLIC ACCOUNTANTS, OR OTHER SIMILAR INDIVIDUALS WHO ARE

25   INDEPENDENTLY PRACTICING THEIR PROFESSIONS, EVEN THOUGH THESE

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

27   BY PERSONS SUBJECT TO EXAMINATION UNDER PROVISIONS OF THIS PART



                                     -28-                                     107
 1   6.
 2           (7)   Cost of examinations.       THE   EXPENSES INCURRED IN

 3   CONDUCTING ANY EXAMINATION SHALL BE PAID BY THE LICENSEE OR

4    APPLICANT.

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

 7   COMMISSIONER, THE COMMISSIONER'S AUTHORIZED REPRESENTATIVES, OR

 8   ANY EXAMINER APPOINTED BY THE COMMISSIONER FOR ANY STATEMENTS

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

10   PROVISIONS OF THIS PART 6.

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

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

13   COMMUNICATING OR DELIVERING INFORMATION OR DATA TO THE

14   COMMISSIONER, THE COMMISSIONER'S AUTHORIZED REPRESENTATIVE, OR

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

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

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

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

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

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

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

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

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

26   PARTY BRINGING THE ACTION WAS NOT SUBSTANTIALLY JUSTIFIED IN

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



                                       -29-                                         107
 1   SUBSTANTIALLY JUSTIFIED IF IT HAD A REASONABLE BASIS IN LAW OR FACT

 2   AT THE TIME THAT IT WAS INITIATED.

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

 5   SETTLEMENT ACTS AND PERSONS ENGAGED IN THE BUSINESS OF VIATICAL

 6   SETTLEMENTS.

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

 8   VIATICAL SETTLEMENT CONTRACT, A VIATICAL SETTLEMENT PROVIDER OR

 9   LIFE INSURANCE PRODUCER SHALL PROVIDE THE VIATOR WITH AT LEAST

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

11   VIATOR AND THE VIATICAL SETTLEMENT PROVIDER OR LIFE INSURANCE

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

13   SETTLEMENT CONTRACT IS SIGNED BY ALL PARTIES:

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

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

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

18   SETTLEMENT CONTRACT MAY BE TAXABLE UNDER FEDERAL INCOME TAX

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

20   SOUGHT FROM A PROFESSIONAL TAX ADVISOR;

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

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

25   MEDICAID OR OTHER GOVERNMENT BENEFITS OR ENTITLEMENTS, AND

26   ADVICE MAY BE OBTAINED FROM THE APPROPRIATE GOVERNMENT

27   AGENCIES;



                                    -30-                                   107
 1         (e) THAT   THE VIATOR HAS THE RIGHT TO RESCIND A VIATICAL

 2   SETTLEMENT CONTRACT BEFORE THE EARLIER OF THIRTY CALENDAR DAYS

 3   AFTER THE DATE UPON WHICH THE VIATICAL SETTLEMENT CONTRACT IS

 4   EXECUTED BY ALL PARTIES OR FIFTEEN CALENDAR DAYS AFTER THE

 5   RECEIPT OF THE VIATICAL SETTLEMENT PROCEEDS BY THE VIATOR.

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

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

 9   SETTLEMENT PROVIDER IS MADE WITHIN FORTY-FIVE DAYS AFTER THE END

10   OF THE RESCISSION PERIOD. IF THE INSURED DIES DURING THE RESCISSION

11   PERIOD, THE VIATICAL SETTLEMENT CONTRACT IS DEEMED TO HAVE BEEN

12   RESCINDED, SUBJECT TO REPAYMENT OF ALL VIATICAL SETTLEMENT

13   PROCEEDS AND ANY PREMIUMS, LOANS, AND LOAN INTEREST BEING MADE

14   TO THE VIATICAL SETTLEMENT PROVIDER WITHIN THE RESCISSION PERIOD.

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

16   BUSINESS DAYS AFTER THE VIATICAL SETTLEMENT PROVIDER HAS

17   RECEIVED THE INSURER OR GROUP ADMINISTRATOR'S ACKNOWLEDGMENT

18   THAT OWNERSHIP OF THE VIATICATED POLICY HAS BEEN TRANSFERRED

19   AND THE BENEFICIARY HAS BEEN DESIGNATED;

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

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

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

24   FROM AN INDEPENDENT FINANCIAL ADVISER;

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

27   SETTLEMENT PROVIDER OR A LIFE INSURANCE PRODUCER ABOUT AN



                                    -31-                                   107
 1   INSURED, INCLUDING THE INSURED'S IDENTITY OR THE IDENTITY OF FAMILY

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

 3   NECESSARY TO EFFECT THE VIATICAL SETTLEMENT CONTRACT BETWEEN

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

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

 6   DISCLOSURE.    THE INFORMATION MAY BE PROVIDED TO SOMEONE WHO
 7   BUYS THE POLICY OR PROVIDES FUNDS FOR THE PURCHASE.     YOU MAY BE
 8   ASKED TO RENEW YOUR PERMISSION TO SHARE INFORMATION EVERY TWO

 9   YEARS."

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

11   VIATICAL SETTLEMENT PROVIDER OR ITS AUTHORIZED REPRESENTATIVE

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

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

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

16   LESS.

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

19   DISTRIBUTION OF A BROCHURE, APPROVED BY THE COMMISSIONER,

20   DESCRIBING THE PROCESS OF VIATICAL SETTLEMENTS.

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

22   CONTRACT IS SIGNED BY ALL PARTIES, THE VIATICAL SETTLEMENT

23   PROVIDER SHALL PROVIDE THE VIATOR WITH AT LEAST THE FOLLOWING

24   INFORMATION, DISPLAYED CONSPICUOUSLY IN THE VIATICAL SETTLEMENT

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

26   VIATICAL SETTLEMENT PROVIDER:

27           (a) THE AFFILIATION, IF ANY, BETWEEN THE VIATICAL SETTLEMENT


                                      -32-                                  107
 1   PROVIDER AND THE ISSUER OF THE INSURANCE POLICY TO BE ACQUIRED

2    PURSUANT TO THE VIATICAL SETTLEMENT CONTRACT;

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

 4   VIATICAL SETTLEMENT PROVIDER;

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

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

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

 8   UNDER THE POLICY TO BE ACQUIRED PURSUANT TO A VIATICAL

 9   SETTLEMENT CONTRACT, THE VIATOR SHALL BE INFORMED OF THE

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

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

12   INSURER ISSUING THE POLICY FOR ADVICE ON THE PROPOSED VIATICAL

13   SETTLEMENT CONTRACT;

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

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

16   KNOWN, THE VIATICAL SETTLEMENT PROVIDER SHALL ALSO DISCLOSE THE

17   AVAILABILITY OF ADDITIONAL GUARANTEED INSURANCE BENEFITS, THE

18   DOLLAR AMOUNT OF ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS

19   UNDER THE POLICY OR CERTIFICATE, AND THE VIATICAL SETTLEMENT

20   PROVIDER'S INTEREST IN THOSE BENEFITS.

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

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

24   TRUST AGREEMENTS OR DOCUMENTS.

25         (4)   IF    THE VIATICAL SETTLEMENT PROVIDER TRANSFERS

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

27   SETTLEMENT PROVIDER SHALL COMMUNICATE THE CHANGE IN OWNERSHIP



                                     -33-                                107
1    OR BENEFICIARY TO THE INSURED WITHIN TWENTY DAYS AFTER THE

 2   CHANGE.

3
4          10-7-609.    General requirements.     (1) (a)   A   VIATICAL

5    SETTLEMENT PROVIDER ENTERING INTO A VIATICAL SETTLEMENT

 6   CONTRACT SHALL FIRST OBTAIN:

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

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

10   SETTLEMENT CONTRACT; AND

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

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

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

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

15   SETTLEMENT CONTRACT, TO THE INSURANCE COMPANY THAT ISSUED THE

16   POLICY.

17         (b) THE INSURER SHALL RESPOND TO A REQUEST FOR VERIFICATION
18   OF COVERAGE SUBMITTED BY A VIATICAL SETTLEMENT PROVIDER OR LIFE

19   INSURANCE PRODUCER NOT LATER THAN THIRTY CALENDAR DAYS AFTER

20   THE DATE THE REQUEST IS POSTMARKED.   THE REQUEST FOR VERIFICATION
21   OF COVERAGE SHALL BE MADE ON A FORM APPROVED BY THE

22   COMMISSIONER.     THE   INSURER SHALL COMPLETE AND ISSUE THE

23   VERIFICATION OF COVERAGE OR INDICATE IN WHICH RESPECTS IT IS

24   UNABLE TO RESPOND.

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

26   SETTLEMENT CONTRACT, THE VIATICAL SETTLEMENT PROVIDER SHALL

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



                                    -34-                                   107
 1   VIATICAL SETTLEMENT CONTRACT, REPRESENTS THAT THE VIATOR HAS A

 2   FULL AND COMPLETE UNDERSTANDING OF THE VIATICAL SETTLEMENT

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

 4   UNDERSTANDING OF THE BENEFITS OF THE POLICY, ACKNOWLEDGES THAT

 5   THE VIATOR IS ENTERING INTO THE VIATICAL SETTLEMENT CONTRACT

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

 7   CHRONIC ILLNESS OR CONDITION, ACKNOWLEDGES THAT THE INSURED HAS

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

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

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

11   ACTIVITIES REQUIRED OF THE VIATICAL SETTLEMENT PROVIDER BY THIS

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

13   FULFILLED THE REQUIREMENTS OF THIS SECTION.

14         (2)   MEDICAL   INFORMATION SOLICITED OR OBTAINED BY A

15   LICENSEE IS SUBJECT TO THE APPLICABLE PROVISIONS OF STATE LAW

16   RELATING TO CONFIDENTIALITY OF MEDICAL OR PROTECTED HEALTH

17   INFORMATION.

18         (3) A VIATICAL SETTLEMENT CONTRACT ENTERED      INTO IN THIS

19   STATE SHALL PROVIDE THE VIATOR WITH AN UNCONDITIONAL RIGHT TO

20   RESCIND THE CONTRACT BEFORE THE EARLIER OF THIRTY CALENDAR DAYS

21   AFTER THE DATE WHEN THE VIATICAL SETTLEMENT CONTRACT IS

22   EXECUTED BY ALL PARTIES OR FIFTEEN CALENDAR DAYS AFTER THE

23   RECEIPT OF THE VIATICAL SETTLEMENT PROCEEDS BY THE VIATOR.

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

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

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



                                    -35-                                  107
1    INSURED DIES DURING THE RESCISSION PERIOD, THE VIATICAL SETTLEMENT

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

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

4    LOAN INTEREST TO THE VIATICAL SETTLEMENT PROVIDER IS MADE WITHIN

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

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

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

9    INDEPENDENT ESCROW AGENT. IF THE VIATOR ERRONEOUSLY PROVIDES

10   THE DOCUMENTS DIRECTLY TO THE VIATICAL SETTLEMENT PROVIDER, THE

11   VIATICAL SETTLEMENT PROVIDER SHALL IMMEDIATELY NOTIFY THE

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

13   VIATICAL SETTLEMENT CONTRACT INTO AN ESCROW OR TRUST ACCOUNT

14   MAINTAINED IN A STATE OR FEDERALLY CHARTERED FINANCIAL

15   INSTITUTION WHOSE DEPOSITS ARE INSURED BY THE FEDERAL DEPOSIT

16   INSURANCE CORPORATION WITHIN THREE BUSINESS DAYS AFTER THE DATE

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

18   VIATICAL SETTLEMENT PROVIDER RECEIVES THE DOCUMENTS.        UPON
19   PAYMENT OF THE VIATICAL SETTLEMENT PROCEEDS INTO THE ESCROW

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

21   OWNERSHIP, ASSIGNMENT, OR BENEFICIARY FORMS TO THE VIATICAL

22   SETTLEMENT PROVIDER OR RELATED PROVIDER TRUST. UPON THE ESCROW

23   AGENT'S RECEIPT OF THE ACKNOWLEDGMENT OF THE PROPERLY

24   COMPLETED TRANSFER OF OWNERSHIP, ASSIGNMENT, OR DESIGNATION OF

25   BENEFICIARY FROM THE INSURANCE COMPANY, THE ESCROW AGENT SHALL

26   PAY THE VIATICAL SETTLEMENT PROCEEDS TO THE VIATOR.

27         (5) FAILURE TO TENDER CONSIDERATION TO THE VIATOR FOR THE


                                    -36-                                  107
 1   VIATICAL SETTLEMENT CONTRACT WITHIN THE TIME REQUIRED RENDERS

 2   THE VIATICAL SETTLEMENT CONTRACT VOIDABLE BY THE VIATOR FOR

 3   LACK OF CONSIDERATION UNTIL CONSIDERATION IS TENDERED TO AND

 4   ACCEPTED BY THE VIATOR.

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

 6   DETERMINING THE HEALTH STATUS OF THE INSURED BY THE VIATICAL

 7   SETTLEMENT PROVIDER AFTER THE VIATICAL SETTLEMENT CONTRACT HAS

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

 9   SETTLEMENT PROVIDER OR ITS AUTHORIZED REPRESENTATIVES AND IS

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

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

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

13   THE VIATICAL SETTLEMENT     PROVIDER SHALL EXPLAIN THE PROCEDURE

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

15   SETTLEMENT CONTRACT.        THE   LIMITATIONS PROVIDED FOR IN THIS

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

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

19   OR HER AUTHORIZED REPRESENTATIVES.

20         10-7-610. Limited purchase in incontestability period. (1) IT
21   IS A VIOLATION OF THIS PART 6 FOR A PERSON TO ENTER INTO A VIATICAL

22   SETTLEMENT CONTRACT WITHIN A TWO-YEAR PERIOD COMMENCING WITH

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

24   THE VIATICAL SETTLEMENT PROVIDER THAT ONE OR MORE OF THE

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

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

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



                                       -37-                                107
 1   THE TOTAL OF THE TIME COVERED UNDER THE CONVERSION POLICY PLUS

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

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

 4   CALCULATED WITHOUT REGARD TO A CHANGE IN INSURANCE CARRIERS IF

 5   THE COVERAGE HAS BEEN CONTINUOUS AND UNDER THE SAME GROUP

6    SPONSORSHIP.

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

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

10         (I) THE VIATOR OR INSURED IS TERMINALLY OR CHRONICALLY ILL;
11   OR

12         (II) THE VIATOR OR INSURED DISPOSES OF HIS OR HER OWNERSHIP
13   INTERESTS IN A CLOSELY HELD CORPORATION PURSUANT TO THE TERMS OF

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

15   INSURANCE POLICY WAS INITIALLY ISSUED.

16         (2)   COPIES   OF THE INDEPENDENT EVIDENCE DESCRIBED IN

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

19   SETTLEMENT PROVIDER SUBMITS A REQUEST TO THE INSURER FOR

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

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

23   BY THE VIATICAL SETTLEMENT PROVIDER.

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

25   INSURER A COPY OF INDEPENDENT EVIDENCE PROVIDED FOR IN PARAGRAPH

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



                                       -38-                                107
 1   OF THE POLICY TO THE VIATICAL SETTLEMENT PROVIDER, THE COPY IS

 2   DEEMED TO CONCLUSIVELY ESTABLISH THAT THE VIATICAL SETTLEMENT

 3   CONTRACT SATISFIES THE REQUIREMENTS OF THIS SECTION AND THE

4    INSURER SHALL RESPOND TIMELY TO THE REQUEST.

 5         10-7-611. Advertising - legislative intent. (1) IT IS THE INTENT
 6   OF THE GENERAL ASSEMBLY THAT THE PURPOSE OF THIS SECTION IS TO

 7   PROVIDE A PROSPECTIVE VIATOR WITH CLEAR AND UNAMBIGUOUS

 8   STATEMENTS IN THE ADVERTISEMENT OF A VIATICAL SETTLEMENT

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

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

11   A VIATICAL SETTLEMENT CONTRACT.           THIS   PURPOSE IS TO BE

12   ACCOMPLISHED BY THE ESTABLISHMENT OF GUIDELINES AND STANDARDS

13   OF PERMISSIBLE AND IMPERMISSIBLE CONDUCT IN THE ADVERTISING OF A

14   VIATICAL SETTLEMENT CONTRACT TO ASSURE THAT A PRODUCT

15   DESCRIPTION IS PRESENTED IN A MANNER THAT PREVENTS UNFAIR,

16   DECEPTIVE, OR MISLEADING ADVERTISING AND IS CONDUCIVE TO

17   ACCURATE PRESENTATION AND DESCRIPTION OF A VIATICAL SETTLEMENT

18   CONTRACT THROUGH THE ADVERTISING MEDIA AND MATERIAL USED BY A

19   LICENSEE.

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

21   SETTLEMENT CONTRACT OR A RELATED PRODUCT OR SERVICE INTENDED

22   FOR DISSEMINATION IN THIS STATE, INCLUDING INTERNET ADVERTISING

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

24   REQUIREMENTS ARE ESTABLISHED PURSUANT TO FEDERAL REGULATION,

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

26   CONFLICT WITH FEDERAL REGULATION WHEREVER POSSIBLE.

27         (3) EACH VIATICAL SETTLEMENT LICENSEE SHALL ESTABLISH AND


                                     -39-                                     107
 1   AT ALL TIMES MAINTAIN A SYSTEM OF CONTROL OVER THE CONTENT,

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

 3   CONTRACTS,    PRODUCTS,   AND    SERVICES.   AN   ADVERTISEMENT,

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

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

 6   WHO CREATED OR PRESENTED THE ADVERTISEMENT.          A   SYSTEM OF

 7   CONTROL BY THE LICENSEE SHALL INCLUDE REGULAR NOTIFICATION, AT

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

 9   DISSEMINATE ADVERTISEMENTS, OF THE REQUIREMENTS AND PROCEDURES

10   FOR APPROVAL BEFORE THE USE OF AN ADVERTISEMENT NOT FURNISHED

11   BY THE LICENSEE.

12         (4) AN ADVERTISEMENT SHALL BE TRUTHFUL AND NOT MISLEADING
13   IN FACT OR BY IMPLICATION.       THE   FORM AND CONTENT OF AN

14   ADVERTISEMENT OF A VIATICAL SETTLEMENT CONTRACT SHALL BE

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

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

17   WHETHER   AN ADVERTISEMENT HAS THE CAPACITY OR TENDENCY TO

18   MISLEAD OR DECEIVE SHALL BE DETERMINED BY THE COMMISSIONER FROM

19   THE OVERALL     IMPRESSION THAT THE ADVERTISEMENT MAY BE

20   REASONABLY EXPECTED TO CREATE UPON A PERSON OF AVERAGE

21   EDUCATION OR INTELLIGENCE WITHIN THE SEGMENT OF THE PUBLIC TO

22   WHICH IT IS DIRECTED.

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

25   OBSCURE, OR PRESENTED IN AN AMBIGUOUS FASHION OR INTERMINGLED

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

27   MISLEADING.



                                     -40-                                  107
 1         (b) AN ADVERTISEMENT MAY NOT OMIT MATERIAL INFORMATION
 2   OR USE WORDS, PHRASES, STATEMENTS, REFERENCES, OR ILLUSTRATIONS

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

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

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

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

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

 9   SATISFIED, OR THAT THE VIATICAL SETTLEMENT CONTRACT INCLUDES A

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

12         (c) AN ADVERTISEMENT MAY NOT USE THE NAME OR TITLE OF A
13   LIFE INSURANCE COMPANY OR A LIFE INSURANCE POLICY UNLESS THE

14   ADVERTISEMENT HAS BEEN APPROVED IN WRITING BY THE INSURER.

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

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

18   PRACTICE.

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

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

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

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

24   PAYMENT OR USE OTHER APPROPRIATE LANGUAGE.

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

27         (A) BE GENUINE;


                                     -41-                                       107
 1         (B) REPRESENT THE CURRENT OPINION OF THE AUTHOR;
 2         (C) BE     APPLICABLE TO THE VIATICAL SETTLEMENT CONTRACT,

 3   PRODUCT, OR SERVICE ADVERTISED, IF ANY; AND

 4         (D)        BE   ACCURATELY   REPRODUCED   WITH   SUFFICIENT

 5   COMPLETENESS TO AVOID MISLEADING OR DECEIVING PROSPECTIVE

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

 7   ANALYSIS, OR ENDORSEMENT.

 8         (II) IN USING ANY TESTIMONIAL, APPRAISAL, OR ANALYSIS, THE
 9   VIATICAL SETTLEMENT LICENSEE MAKES AS ITS OWN ALL THE STATEMENTS

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

11   PROVISIONS OF THIS SECTION.

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

13   ANALYSIS, OR ENDORSEMENT HAS A FINANCIAL INTEREST IN THE VIATICAL

14   SETTLEMENT PROVIDER OR RELATED ENTITY AS A STOCKHOLDER,

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

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

17   THAT FACT MUST BE DISCLOSED PROMINENTLY IN THE ADVERTISEMENT.

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

19   VIATICAL SETTLEMENT CONTRACT, BENEFIT, OR SERVICE HAS BEEN

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

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

22   UNLESS ANY RELATIONSHIP BETWEEN AN ORGANIZATION AND THE

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

25   RECEIVES PAYMENT OR OTHER CONSIDERATION FROM THE LICENSEE FOR

26   MAKING AN ENDORSEMENT OR TESTIMONIAL, THAT FACT MUST BE

27   DISCLOSED IN THE ADVERTISEMENT.



                                     -42-                                107
 1            (V) IF AN ENDORSEMENT REFERS TO BENEFITS RECEIVED UNDER A
 2   VIATICAL SETTLEMENT CONTRACT, ALL PERTINENT INFORMATION SHALL

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

 4            (VI)    AN    ADVERTISEMENT MAY NOT CONTAIN STATISTICAL

 5   INFORMATION UNLESS IT ACCURATELY REFLECTS RECENT AND RELEVANT

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

 7   SHALL BE IDENTIFIED.

 8            (VII)    AN   ADVERTISEMENT MAY NOT DISPARAGE INSURERS,

 9   VIATICAL SETTLEMENT PROVIDERS, INSURANCE PRODUCERS, POLICIES,

10   SERVICES, OR METHODS OF MARKETING.

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

13   ITS VIATICAL SETTLEMENT CONTRACT, PRODUCTS, OR SERVICES, AND IF

14   ANY SPECIFIC VIATICAL SETTLEMENT CONTRACT IS ADVERTISED, THE

15   VIATICAL SETTLEMENT CONTRACT MUST BE IDENTIFIED EITHER BY FORM

16   NUMBER OR SOME OTHER APPROPRIATE DESCRIPTION. IF AN APPLICATION

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

18   PROVIDER SHALL BE SHOWN ON THE APPLICATION.

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

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

22   SYMBOL, OR OTHER DEVICE OR REFERENCE WITHOUT DISCLOSING THE

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

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

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

26   THE LICENSEE HAS ANY RESPONSIBILITY FOR THE FINANCIAL OBLIGATION

27   UNDER A VIATICAL SETTLEMENT CONTRACT.



                                       -43-                               107
 1         (X) AN    ADVERTISEMENT MAY NOT USE ANY COMBINATION OF

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

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

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

 5   MATERIALS USED BY A GOVERNMENT PROGRAM OR AGENCY OR OTHERWISE

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

 7   PROSPECTIVE VIATORS INTO BELIEVING THAT THE SOLICITATION IS IN SOME

 8   MANNER CONNECTED WITH A GOVERNMENT PROGRAM OR AGENCY.

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

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

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

12   LICENSEE MAY NOT BE SO LICENSED.      THE ADVERTISEMENT MAY ASK THE
13   AUDIENCE TO CONSULT THE LICENSEE'S WEB SITE OR CONTACT THAT

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

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

16   IS LICENSED.

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

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

20   ADVISABILITY    OF   ITS   VIATICAL     SETTLEMENT   CONTRACTS   ARE

21   RECOMMENDED OR ENDORSED BY ANY GOVERNMENT ENTITY.

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

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

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

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



                                      -44-                                  107
 1   CREATE THE FALSE IMPRESSION THAT AN AFFILIATE OR CONTROLLING

 2   ENTITY HAS ANY RESPONSIBILITY FOR THE FINANCIAL OBLIGATION OF THE

 3   LICENSEE.

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

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

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

 8   OPERATION;

 9         (B) THE MERITS, DESIRABILITY, OR ADVISABILITY OF A VIATICAL
10   SETTLEMENT CONTRACT;

11         (C) ANY VIATICAL SETTLEMENT CONTRACT; OR
12         (D) ANY POLICY OR LIFE INSURANCE COMPANY.
13         (XV) IF THE ADVERTISER EMPHASIZES THE SPEED WITH WHICH THE
14   VIATICAL SETTLEMENT CONTRACT OCCURS, THE ADVERTISING MUST

15   DISCLOSE THE AVERAGE TIME FRAME, FROM COMPLETED APPLICATION TO

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

17   THE FUNDS BY THE VIATOR.

18         (XVI) IF THE ADVERTISING EMPHASIZES THE DOLLAR AMOUNTS
19   AVAILABLE TO VIATORS, THE ADVERTISING SHALL DISCLOSE THE AVERAGE

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

21   CONTRACTING WITH THE LICENSEE DURING THE PAST SIX MONTHS.

22         10-7-612. Fraudulent acts. (1) (a) A     PERSON SHALL NOT

23   COMMIT A FRAUDULENT VIATICAL SETTLEMENT ACT.

24         (b)    A   PERSON SHALL NOT KNOWINGLY OR INTENTIONALLY

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

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

27         (c) A PERSON IN THE BUSINESS OF VIATICAL SETTLEMENTS SHALL


                                     -45-                                 107
 1   NOT KNOWINGLY OR INTENTIONALLY PERMIT A PERSON CONVICTED OF A

 2   FELONY INVOLVING DISHONESTY OR BREACH OF TRUST TO PARTICIPATE IN

 3   THE BUSINESS OF VIATICAL SETTLEMENTS.

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

 6   TRANSMISSION, SHALL CONTAIN THE FOLLOWING STATEMENT OR A

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

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

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

11   BOTH."

12           (b) THE LACK OF A STATEMENT AS PROVIDED FOR IN PARAGRAPH
13   (a)   OF THIS SUBSECTION   (2)   DOES NOT CONSTITUTE A DEFENSE IN ANY

14   PROSECUTION FOR A FRAUDULENT VIATICAL SETTLEMENT ACT.

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

16   SETTLEMENTS HAVING KNOWLEDGE OR A REASONABLE BELIEF THAT A

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

18   COMMITTED SHALL PROVIDE TO THE COMMISSIONER THE INFORMATION

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

20           (b) ANOTHER     PERSON HAVING KNOWLEDGE OR A REASONABLE

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

22   OR HAS BEEN COMMITTED MAY PROVIDE TO THE COMMISSIONER THE

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

24   COMMISSIONER.

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

26   CAUSE OF ACTION SHALL ARISE FROM THE OTHERWISE LAWFUL CONDUCT

27   OF, A PERSON WHO FURNISHES INFORMATION CONCERNING SUSPECTED,



                                          -46-                               107
 1   ANTICIPATED, OR COMPLETED FRAUDULENT VIATICAL SETTLEMENT ACTS,

 2   OR SUSPECTED OR COMPLETED FRAUDULENT INSURANCE ACTS, IF THE

3    INFORMATION IS PROVIDED TO OR RECEIVED FROM:

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

5    AGENTS, OR REPRESENTATIVES;

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

 7   REGULATORY       OFFICIALS   OR   THEIR   EMPLOYEES ,   AGENTS ,    OR

 8   REPRESENTATIVES;

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

11   EMPLOYEES, OR REPRESENTATIVES;

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

13   DEALERS, OR THE NORTH        AMERICAN     SECURITIES ADMINISTRATORS

14   ASSOCIATION, OR THEIR EMPLOYEES, AGENTS, OR REPRESENTATIVES, OR

15   ANOTHER REGULATORY BODY OVERSEEING LIFE INSURANCE OR VIATICAL

16   SETTLEMENT CONTRACTS; OR

17         (V) THE INSURER THAT ISSUED THE POLICY COVERING THE LIFE OF
18   THE INSURED.

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

21   AGAINST A PERSON FOR FILING A REPORT OR FURNISHING OTHER

22   INFORMATION CONCERNING A FRAUDULENT VIATICAL SETTLEMENT ACT OR

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

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

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

26   OR FURNISHING THE INFORMATION DID SO WITH ACTUAL MALICE.

27         (c) A PERSON IDENTIFIED IN PARAGRAPH (a) OF THIS SUBSECTION


                                       -47-                                    107
 1   (4)   IS ENTITLED TO AN AWARD OF ATTORNEY FEES AND COSTS IF THE

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

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

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

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

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

 8   INITIATED.

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

11   DESCRIBED IN PARAGRAPH   (a) OF THIS SUBSECTION (4).
12           (e) PARAGRAPH (a) OF THIS SUBSECTION (4) DOES NOT APPLY TO
13   A PERSON'S FURNISHING INFORMATION CONCERNING THE PERSON'S OWN

14   SUSPECTED, ANTICIPATED, OR COMPLETED FRAUDULENT VIATICAL

15   SETTLEMENT ACTS OR SUSPECTED, ANTICIPATED, OR COMPLETED

16   FRAUDULENT INSURANCE ACTS.

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

19   AN INVESTIGATION OF SUSPECTED OR ACTUAL FRAUDULENT VIATICAL

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

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

22   CRIMINAL ACTION.

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

25   IN AN INVESTIGATION OF SUSPECTED OR ACTUAL FRAUDULENT VIATICAL

26   SETTLEMENT ACTS:

27           (I) IN ADMINISTRATIVE OR JUDICIAL PROCEEDINGS TO ENFORCE


                                     -48-                                   107
1    LAWS ADMINISTERED BY THE COMMISSIONER;

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

 3   REGULATORY AGENCIES, TO AN ORGANIZATION ESTABLISHED FOR THE

 4   PURPOSE OF DETECTING AND PREVENTING FRAUDULENT VIATICAL

 5   SETTLEMENT ACTS, OR TO THE NAIC; OR

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

8    FRAUDULENT VIATICAL SETTLEMENT ACT.

 9           (c)    RELEASE   OF DOCUMENTS AND EVIDENCE PURSUANT TO

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

11   THE PRIVILEGE GRANTED IN PARAGRAPH       (a) OF THIS SUBSECTION (5).
12           (6) THIS PART 6 DOES NOT:
13           (a) PREEMPT THE AUTHORITY OR RELIEVE THE DUTY OF OTHER LAW
14   ENFORCEMENT OR REGULATORY AGENCIES TO INVESTIGATE, EXAMINE,

15   AND PROSECUTE SUSPECTED VIOLATIONS OF LAW;

16           (b)    PREVENT    OR PROHIBIT A PERSON FROM VOLUNTARILY

17   DISCLOSING        INFORMATION   CONCERNING    FRAUDULENT      VIATICAL

18   SETTLEMENT ACTS TO A LAW ENFORCEMENT OR REGULATORY AGENCY

19   OTHER THAN THE DIVISION; OR

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

22   INVESTIGATE AND EXAMINE POSSIBLE VIOLATIONS OF LAW AND TO TAKE

23   APPROPRIATE ACTION AGAINST WRONGDOERS.

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

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

26   THE PROSECUTION OF, AND PREVENT FRAUDULENT VIATICAL SETTLEMENT

27   ACTS.   THE COMMISSIONER MAY ORDER OR, IF A LICENSEE REQUESTS, MAY


                                       -49-                                   107
 1   GRANT MODIFICATIONS OF THE FOLLOWING INITIATIVES AS NECESSARY TO

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

 4   MODIFICATIONS MAY REASONABLY BE EXPECTED TO ACCOMPLISH THE

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

 8   VIATICAL SETTLEMENT PROVIDERS; AND

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

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

11   LIMITED TO:

12         (A) A CHART OUTLINING THE ORGANIZATIONAL ARRANGEMENT OF
13   THE   ANTI-FRAUD     PERSONNEL      WHO     ARE   RESPONSIBLE    FOR   THE

14   INVESTIGATION AND REPORTING OF POSSIBLE FRAUDULENT VIATICAL

15   SETTLEMENT    ACTS       AND   INVESTIGATING      UNRESOLVED    MATERIAL

16   INCONSISTENCIES     BETWEEN       MEDICAL    RECORDS    AND     INSURANCE

17   APPLICATIONS; AND

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

19   INVESTIGATING POSSIBLE FRAUDULENT VIATICAL SETTLEMENT ACTS AND

20   PROCEDURES FOR RESOLVING MATERIAL INCONSISTENCIES BETWEEN

21   MEDICAL RECORDS AND INSURANCE APPLICATIONS, A DESCRIPTION OF THE

22   PROCEDURES    FOR     REPORTING       POSSIBLE     FRAUDULENT    VIATICAL

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

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

25   OTHER PERSONNEL.

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



                                         -50-                                     107
1    ARTICLE 72 OF TITLE 24, C.R.S., AND ARE NOT SUBJECT TO DISCOVERY OR

 2   SUBPOENA IN A CIVIL OR CRIMINAL ACTION.

3           10-7-613. Penalties. (1) IN ADDITION TO THE PENALTIES AND
4    OTHER ENFORCEMENT PROVISIONS OF THIS PART 6, IF A PERSON VIOLATES

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

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

7    COMPETENT JURISDICTION AND MAY APPLY FOR TEMPORARY AND

8    PERMANENT ORDERS AS THE COMMISSIONER DETERMINES ARE NECESSARY

9    TO RESTRAIN THE PERSON FROM COMMITTING THE VIOLATION.

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

12   COMMITTING THE VIOLATION IN A COURT OF COMPETENT JURISDICTION.

13          (3) THE COMMISSIONER MAY ISSUE A CEASE AND DESIST ORDER TO
14   A PERSON WHO VIOLATES ANY PROVISION OF THIS PART 6 OR OF ANY RULE

15   OR ORDER PROMULGATED BY, OR WRITTEN AGREEMENT ENTERED INTO

16   WITH, THE COMMISSIONER PURSUANT TO THIS PART 6.

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

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

19   PUBLIC THAT REQUIRES AN IMMEDIATE FINAL ORDER, THE COMMISSIONER

20   MAY ISSUE AN EMERGENCY CEASE AND DESIST ORDER RECITING WITH

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

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

24   NINETY DAYS. IF THE COMMISSIONER BEGINS NONEMERGENCY CEASE AND

25   DESIST PROCEEDINGS, THE EMERGENCY CEASE AND DESIST ORDER REMAINS

26   EFFECTIVE ABSENT AN ORDER BY A COURT OF COMPETENT JURISDICTION

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



                                      -51-                                 107
 1   4 OF TITLE 24, C.R.S.
 2         (5) IN ADDITION TO THE PENALTIES     AND OTHER ENFORCEMENT

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

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

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

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

 8   BY VIOLATIONS OF THIS PART 6.

 9         (6) (a) A PERSON    WHO VIOLATES A PROVISION OF THIS PART      6
10   AFTER THE COMMISSIONER HAS ISSUED A CEASE AND DESIST ORDER TO THE

11   PERSON COMMITS A CLASS     2   MISDEMEANOR AND, UPON CONVICTION,

12   SHALL PAY RESTITUTION TO A PERSON AGGRIEVED BY THE VIOLATION.

13   RESTITUTION    SHALL BE ORDERED IN ADDITION TO A FINE OR

14   IMPRISONMENT, BUT NOT INSTEAD OF A FINE OR IMPRISONMENT.

15         (b) A PERSON WHO VIOLATES PARAGRAPH (a) OF THIS SUBSECTION
16   (6), UPON CONVICTION, SHALL BE SENTENCED BASED ON THE GREATER OF
17   THE VALUE OF PROPERTY, SERVICES, OR OTHER BENEFITS WRONGFULLY

18   OBTAINED OR ATTEMPTED TO BE OBTAINED, OR THE AGGREGATE

19   ECONOMIC LOSS SUFFERED BY ANY PERSON AS A RESULT OF THE

20   VIOLATION.   A PERSON SHALL BE FINED NOT MORE THAN:
21         (I) ONE HUNDRED THOUSAND DOLLARS OR IMPRISONED FOR NOT
22   MORE THAN TWELVE MONTHS, OR BOTH, IF THE VALUE OF THE VIATICAL

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

24         (II) TWENTY THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE
25   THAN NINE MONTHS, OR BOTH, IF THE VALUE OF THE VIATICAL SETTLEMENT

26   CONTRACT IS MORE THAN TWO THOUSAND FIVE HUNDRED DOLLARS BUT

27   NOT MORE THAN THIRTY-FIVE THOUSAND DOLLARS;



                                       -52-                                    107
 1           (III) TEN   THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE

 2   THAN SIX MONTHS, OR BOTH, IF THE VALUE OF THE VIATICAL SETTLEMENT

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

 4   TWO THOUSAND FIVE HUNDRED DOLLARS; OR

 5           (IV) THREE THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE
 6   THAN THREE MONTHS, OR BOTH, IF THE VALUE OF THE VIATICAL

 7   SETTLEMENT CONTRACT IS FIVE HUNDRED DOLLARS OR LESS.

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

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

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

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

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

14   OF THE OFFENSES WAS COMMITTED FOR ALL OF THE OFFENSES

15   AGGREGATED AS PROVIDED BY THIS SECTION. THE STATUTORY LIMITATION

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

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

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

19   OCCURRED.

20           10-7-614. Unfair trade practices. A VIOLATION OF THIS PART 6
21   SHALL CONSTITUTE AN UNFAIR TRADE PRACTICE PURSUANT TO PART 11 OF

22   ARTICLE 3 OF THIS TITLE AND BE SUBJECT TO THE PENALTIES CONTAINED

23   IN SUCH PART 11.

24           10-7-615. Rules. (1) THE COMMISSIONER MAY:
25           (a) PROMULGATE RULES IMPLEMENTING THIS PART 6;
26           (b)     ESTABLISH    STANDARDS     FOR   EVALUATING     THE

27   REASONABLENESS OF PAYMENTS UNDER A VIATICAL SETTLEMENT



                                     -53-                                   107
 1   CONTRACT FOR A PERSON WHO IS TERMINALLY OR CHRONICALLY ILL. THIS

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

 3   RATES USED TO DETERMINE THE AMOUNT PAID IN EXCHANGE FOR

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

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

 7   THE CASH SURRENDER VALUE OR ACCELERATED DEATH BENEFIT THEN

 8   AVAILABLE.

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

11   PROVIDER AND A FEE FOR LIFE INSURANCE PRODUCERS;

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

13   ACCOUNTABILITY FOR A VIATICAL SETTLEMENT PROVIDER; AND

14         (e)      ADOPT      RULES   GOVERNING   THE    RELATIONSHIP      AND

15   RESPONSIBILITIES OF AN INSURER AND A VIATICAL SETTLEMENT PROVIDER,

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

17   SETTLEMENTS DURING THE PERIOD OF CONSIDERATION OR EFFECTUATION

18   OF A VIATICAL SETTLEMENT CONTRACT.

19         10-7-616. No preemption - Colorado Securities Act - authority
20   of the division of securities. NOTHING     IN THIS PART   6   PREEMPTS OR

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

22   ARTICLE   51   OF TITLE   11, C.R.S.,   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". COMPLIANCE WITH THIS PART 6 DOES NOT
27   CONSTITUTE COMPLIANCE WITH ANY APPLICABLE PROVISION OF THE



                                        -54-                                      107
1    "COLORADO SECURITIES ACT"           OR ANY RULES, ORDERS, POLICY

2    STATEMENTS, NOTICES, BULLETINS, OR OTHER INTERPRETATIONS ISSUED

3    BY   OR     THROUGH   THE   COMMISSIONER      OF   SECURITIES    OR   THE

4    COMMISSIONER OF SECURITIES' DESIGNEE ACTING PURSUANT TO THE

5    "COLORADO SECURITIES ACT".
6           10-7-617. Application. A       VIATICAL SETTLEMENT PROVIDER

7    LAWFULLY TRANSACTING BUSINESS IN THIS STATE MAY CONTINUE TO DO

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

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

10   COMMISSIONER NOT LATER THAN THIRTY DAYS AFTER PUBLICATION BY

11   THE COMMISSIONER OF AN APPLICATION FORM FOR LICENSURE OF VIATICAL

12   SETTLEMENT PROVIDERS. IF THE PUBLICATION OF THE APPLICATION FORM

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

14   APPLICATION SHALL NOT BE LATER THAN THIRTY DAYS AFTER THE

15   EFFECTIVE DATE OF THIS PART 6.

16          10-7-618. Continuation of business. NOTWITHSTANDING ANY
17   PROVISION OF THIS PART      6   TO THE CONTRARY, A PERSON WHO HAS

18   LAWFULLY NEGOTIATED VIATICAL SETTLEMENT CONTRACTS BETWEEN A

19   VIATOR AND ONE OR MORE VIATICAL SETTLEMENT PROVIDERS FOR AT

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

21   PART   6   MAY CONTINUE TO NEGOTIATE VIATICAL SETTLEMENTS IN THIS

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

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

24   PRESCRIBED BY THE COMMISSIONER. SUCH REGISTRATION FORM SHALL BE

25   PUBLISHED BY THE COMMISSIONER NOT LATER THAN THIRTY DAYS AFTER

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

27   REGISTERING TO EVIDENCE THAT HE OR SHE HAS LAWFULLY NEGOTIATED



                                        -55-                                     107
 1   VIATICAL SETTLEMENT CONTRACTS.      THE FORM SHALL ALSO INCLUDE AN
 2   ACKNOWLEDGMENT BY SUCH PERSON THAT HE OR SHE WILL OPERATE IN

 3   ACCORDANCE WITH AND COMPLY WITH THIS PART 6.

 4         10-7-619. Viatical settlements cash fund - created. ALL DIRECT
 5   AND INDIRECT EXPENDITURES OF THE COMMISSIONER AND THE DIVISION IN

 6   ADMINISTERING THIS PART      6   SHALL BE PAID FROM THE VIATICAL

 7   SETTLEMENTS CASH FUND, WHICH FUND IS HEREBY CREATED IN THE STATE

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

10   VIATICAL SETTLEMENTS CASH FUND.          ALL   MONEYS CREDITED TO THE

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

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

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

14   ANNUAL APPROPRIATION BY THE GENERAL ASSEMBLY FOR THE PURPOSE OF

15   DEFRAYING THE EXPENSES OF THE COMMISSIONER AND THE DIVISION IN

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

18   SHALL BE CREDITED TO THE VIATICAL SETTLEMENTS CASH FUND.

19         10-7-620. Severability. IF ANY PROVISION OF THIS PART 6 IS FOR
20   ANY REASON HELD TO BE UNCONSTITUTIONAL OR INVALID, SUCH HOLDING

21   SHALL NOT AFFECT THE CONSTITUTIONALITY OR VALIDITY OF THE

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

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

24         SECTION 2. 11-51-201 (17), Colorado Revised Statutes, is
25   amended, and the said 11-51-201 is further amended BY THE
26   ADDITION OF A NEW SUBSECTION, to read:
27         11-51-201. Definitions. As used in this article, unless the context


                                       -56-                                      107
 1   otherwise requires:
 2          (17) "Security" means any note; stock; treasury stock; bond;
 3   debenture; evidence of indebtedness; certificate of interest or
 4   participation in any profit-sharing agreement; collateral-trust certificate;
 5   preorganization certificate of subscription; transferable share; investment
 6   contract;   VIATICAL SETTLEMENT INVESTMENT;          voting-trust certificate;
 7   certificate of deposit for a security; certificate of interest or participation
 8   in an oil, gas, or mining title or lease or in payments out of production
 9   under such a title or lease; or, in general, any interest or instrument
10   commonly known as a "security" or any certificate of interest or
11   participation in, temporary or interim certificate for, guarantee of, or
12   warrant or right to subscribe to or purchase any of the foregoing.
13   "Security" does not include any insurance or endowment policy or
14   annuity contract under which an insurance company promises to pay a
15   sum of money either in a lump sum or periodically for life or some other
16   specified period. For purposes of this article, an "investment contract"
17   need not involve more than one investor nor be limited to those
18   circumstances wherein there are multiple investors who are joint
19   participants in the same enterprise.
20          (20)      "VIATICAL     SETTLEMENT      INVESTMENT"      MEANS     THE

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

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

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

24   THE LIFE INSURANCE POLICY OR CERTIFICATE.           "VIATICAL SETTLEMENT
25   INVESTMENT" DOES NOT INCLUDE:

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

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



                                          -57-                                         107
 1          (b) ANY TRANSFER OF OWNERSHIP OR BENEFICIAL INTEREST IN A
 2   LIFE INSURANCE POLICY FROM A VIATICAL SETTLEMENT PROVIDER TO

 3   ANOTHER VIATICAL SETTLEMENT PROVIDER AS DEFINED BY SECTION

 4   10-7-602, C.R.S.,   OR TO ANY LEGAL ENTITY FORMED SOLELY FOR THE

 5   PURPOSE OF HOLDING OWNERSHIP OR BENEFICIAL INTEREST IN A LIFE

 6   INSURANCE POLICY OR POLICIES;

 7          (c) THE BONA FIDE ASSIGNMENT OF A LIFE INSURANCE POLICY TO
 8   A BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION,

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

10   OR

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

13   10, C.R.S.
14          SECTION 3.         Appropriation.     In addition to any other
15   appropriation, there is hereby appropriated, out of any moneys in the
16   viatical settlements cash fund created in section 10-7-619, Colorado
17   Revised Statutes, not otherwise appropriated, to the department of
18   regulatory agencies, division of insurance, for the fiscal year beginning
19   July 1, 2005, the sum of five thousand six hundred twenty-six dollars
20   ($5,626) and 0.1 FTE, or so much thereof as may be necessary, for the
21   implementation of this act.
22          SECTION 4. Effective date - applicability. This act shall take
23   effect January 1, 2006, and shall apply to viatical settlements offered or
24   entered into on or after said date.
25          SECTION 5. Safety clause. The general assembly hereby finds,
26   determines, and declares that this act is necessary for the immediate
27   preservation of the public peace, health, and safety.


                                           -58-                                   107

				
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