NYHLI CH 19

"If you enter into a loan arrangement where the policy is used as collateral, and the policy changes ownership at some point in the future in satisfaction of the loan, then the following may be true:

--A change of ownership may lead to a person unknown to you owning an interest in the insured's life; --A change of ownership may limit your ability to purchase insurance in the future on the insured's life because there is a limit to how much coverage insurers will issue on one life; --If ownership of the life insurance policy changes, and you wish to obtain more insurance coverage on the insured's life in the future, the insured's higher issue age, a change in health status, and/or other factors may reduce the ability to obtain coverage and/or may result in significantly higher premiums; and --You should consult a professional advisor, since a change in ownership in satisfaction of the loan may result in tax consequences to the owner."

Two disclosures must be made to customers

--The first disclosure must be made when the customer relationship is established --The second disclosure must be made before disclosure of protected information. At this time, the company must provide the customer with an opportunity to opt out of this disclosure, and instructions for how to opt out.

The two-year prohibition does not apply if the owner certifies to the life settlement provider that:

--The policy was issued upon the owner's exercise of conversion rights arising out of a policy, as long as the total of the time covered under the conversion policy plus the time covered under the prior policy is at least 24 months; or --One or more of the following conditions have been met within the two-year period: -The owner or insured is terminally or chronically ill; -The owner or insured disposes of ownership interests in a closely held corporation, pursuant to the terms of a buyout or other similar agreement in effect at the time the insurance policy was initially issued; -The owner's spouse dies; -The owner divorces his or her spouse; -The owner retires from full-time employment or involuntarily ceases employment; -The owner becomes physically or mentally disabled and a physician determines that the disability prevents the owner from maintaining full-time employment; --A final order, judgment or decree is entered by a court of competent jurisdiction, on the application of a creditor of the owner, adjudicating the owner bankrupt or insolvent, or approving a petition seeking reorganization of the owner or appointing a receiver, trustee or liquidator to all or a substantial part of the owner's assets; or --Any other condition that the Superintendent may determine by regulation to be an extraordinary circumstance for the owner or the insured.

A trust that is used to purchase life insurance is a STOLI, and is illegal in New York.

A trust that is used to purchase life insurance is a STOLI, and is illegal in New York.

Prohibited Practices (7814) No person shall:

Enter into a life settlement contract if the person knows or reasonably should have known that the policy was obtained in a false, deceptive or misleading way; Engage in any transaction, practice or course of business if the person knows or reasonably should have known that the intent was to avoid the disclosure or other notice requirements; Engage in any fraudulent act; Enter into a premium finance loan with an applicant for a new policy or an owner, and the person providing premium financing receives any proceeds, fees or other consideration that are in addition to the amounts required to pay the principal, interest and any reasonable costs, fees or expenses incurred by the lender or borrower; Knowingly failing to disclose any affiliation or contractual arrangement; Directly or indirectly, purchase or obtain an interest in any policy that is the subject of a life settlement contract where the person has acted as a life settlement broker or life settlement intermediary with respect to the policy, unless such affiliation has been disclosed to the owner; Provide any compensation to any person acting in this state as a life settlement broker, and no person shall accept any such compensation, unless the person is a licensed life settlement broker; Pay any referral or finder's fee or provide any other compensation to any owner's physician, attorney, accountant, insurance producer, insurance consultant, or other person providing medical, legal or financial planning services to the owner, or to any other person, other than a life settlement broker, representing the owner with respect to the life settlement contract, and no person shall accept any such fee or compensation; Provide compensation to a life settlement broker, except where the compensation is for a specific life settlement contract and is clearly disclosed to the owner; Engage in any act determined by the Superintendent to be an unfair or deceptive act or practice; Remove, conceal, alter, destroy or sequester from the Superintendent the assets or records of a life settlement provider, life settlement broker, life settlement intermediary or other person engaged in the business of life settlements; Misrepresent or conceal the financial condition of a life settlement provider; or File with the Superintendent a document containing materially false information concerning any fact material to a life settlement contract or otherwise conceal material information from the Superintendent.

No person shall act as a life settlement intermediary in New York without having authority to do so by virtue of a registration issued and in force.

Every registration issued shall expire on June 30th of odd-numbered years.

If the insured dies during the 2-year loan period, the investor/stranger repays the loan and then receives the death benefit

If the insured is alive after the 2-year loan period, the policy is sold to investors in an amount that is greater than the policy's cash value, but less than its death benefit.

Rescission

Insurance contracts may be voided if one or more parties to the contract commit a material misrepresentation or concealment.

Reporting of Disciplinary Actions (2110(i)(j))

Licensees must report to the Superintendent, in writing, any administrative action taken against him in another jurisdiction or by another governmental agency within 30 days of the final disposition of the matter

No HIV-related tests may be performed without written consent of the subject.

No HIV-related tests may be performed without written consent of the subject.

All statements made by the applicant for the issuance, reinstatement, or renewal of a policy must be deemed representations and not warranties.

No alterations to a written application for a policy may be made without the applicant's written consent

No individual may act for or aid an unlicensed or unauthorized insurer

No individual may act for or aid an unlicensed or unauthorized insurer or HMO in effectuating an insurance, HMO, or annuity contract.

Stranger-originated life insurance arrangements do not include lawful life settlement contracts.

No person shall engage in any act, practice or arrangement that constitutes stranger-originated life insurance.

*Insured Disclosures* life settlement provider or life settlement broker shall provide to the insured in a separate written document conspicuously displaying the information and disclosures required by this subsection

The document shall: --State that the insured may be contacted by either the life settlement provider or life settlement broker or any authorized representative thereof, for the purpose of determining the insured's health status or to verify the insured's address, --state that the contact shall be limited to once every three months if the insured has a life expectancy of more than one year, and no more than once per month if the insured has a life expectancy of one year or less; --State that a change of ownership could in the future limit the insured's ability to purchase additional insurance on the insured's life because there is a limit to how much coverage insurers will issue on one life; and --Contain the following language, or such other language required by the Superintendent by regulation: "All medical, financial or personal information solicited or obtained by a life settlement provider or life settlement broker about an insured, including the insured's identity or the identity of family members, a spouse or a significant other may be disclosed as necessary to effect the life settlement contract between the owner and provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share information every two years."

A financing transaction

a transaction in which a licensed life settlement provider obtains financing from a financing entity

Compensation

anything of value, including money, credits, loans, interest on premium, forgiveness of principal or interest, vacations, prizes, gifts or the payment of employee salaries or expenses, whether paid as commission or otherwise.

Individuals engaged in the business of insurance found to have committed fraud or knowingly made materially false statements

are subject to federal criminal charges including a fine of up to $50,000 and 10 years in prison

STOLI and IOLI are

ethical dilemmas because the investor or stranger does not have insurable interest in the continued life and well-being of the insured.

Every life settlement contract shall provide that the owner has an unconditional right to rescind the life settlement contract

from the time the contract is established until 15 days after the receipt of the life settlement proceeds

Insurable interest

means any person who is closely related to the policyholder by blood or law, has a substantial interest engendered by love and affection, or has a substantial economic interest in the continued life and health of the policyholder

knowingly and willfully acted as a life settlement provider without a license,

the Superintendent may impose a civil penalty payable to the people of this state up to $100,000 for each policy settled in violation.

knowingly and willfully acted as a life settlement broker without a license,

the Superintendent may impose a civil penalty payable to the people of this state up to $50,000 for each policy settled in violation.

knowingly and willfully acted as a life settlement intermediary without a registration,

the Superintendent may impose a civil penalty payable to the people of this state up to $50,000 for each transaction

penalties for knowingly delaying or not providing proper disclosure, resulting in material detriment of the owner

the Superintendent, in addition to any other penalty prescribed by law, may require the life settlement broker to pay to the people of this state an amount up to the compensation due or provided to the life settlement broker

penalty for violated privacy rules,

the Superintendent, in addition to any other penalty prescribed by law, may require the person to pay the insured or owner an amount up to $20,000.

penalty for knowingly engaging in stranger-originated life

the Superintendent, in addition to any other penalty prescribed by law, may require the person to pay to the people of this state an amount up to $100,000.

owner

the owner of a policy who enters or seeks to enter into a life settlement contract

Statements are deemed to be misrepresentations if,

when taken in the context of the whole presentation, they may tend to mislead or deceive a person.

Any person who makes false claims for any death, sickness, or disability benefit

will be guilty of a misdemeanor and subject to a civil fine not to exceed $5,000

life settlement broker license may be issued to an individual, firm, association or corporation that complies with the requirements for licensure

--must be at least 18 years of age --submit application --background check --written exam

A life settlement broker is a person who, for compensation, solicits, negotiates or offers to negotiate a life settlement contract.

The following are not life settlement brokers: --a licensed life settlement provider, licensed attorney at law, certified public accountant, or financial planner that is accredited by a nationally recognized accreditation agency, who is retained in his or her professional capacity, does not advertise as being in the business of life settlements and is compensated without regard to whether a life settlement contract is established.

Every insurer who terminates a producer must file with the Superintendent within 31 days of termination a statement regarding the facts leading to termination.

The insurer must also send a copy of the report to the terminated producer within 15 days of its receipt by the Superintendent.

qualified institutional buyer is defined as a dealer, an investment company registered under the Investment Company Act,

a bank which owns or invests at least $100 million in securities of non-affiliated issuers, and has a net worth of at least $25 million, or any of the following entities that in the total own and invest at least $100 million in securities of issuers that are not affiliated with the entity

Stranger-Originated Life Insurance, or STOLI,

a consumer purchases a life insurance policy with the agreement that a third party agent/broker or investor will purchase the consumer's policy and receive the proceeds as a profit upon the consumer's death

life settlement provider is

a person who enters, or offers to enter, into a life settlement contract with the owner. -someone who provides life settlement contracts

. Unethical producers practice defamation

by spreading rumors or falsehoods about the character of competing producers or about the financial condition of another company

An insurer may issue a policy upon the life of a minor under the age of 14 and 6 months,

if the policy is effectuated by a person having an insurable interest in the life of the minor --cannot issue policy for more than $50000

accelerated benefit contract must disclose the conditions for payment,

including the amount of any additional premiums, a certification signed by a licensed physician diagnosing the life expectancy of the insured and the proposed treatment during the coverage period.

It is an unfair and deceptive act for an insurance producer to use a senior-specific certification or professional designation

indicates or implies in such a way as to mislead a purchaser that the insurance producer has special certification or training in advising seniors in connection with the solicitation, sale or purchase of life insurance -cant try to trick the elderly

Investor-originated life insurance (IOLI) is a type of STOLI. With IOLI,

investors solicit elderly people to purchase life insurance, and an agent or broker agrees to loan insureds money to pay the premiums for a period of time, with the agreement that after two years in paying premiums the investors become the policyowners

Consumer credit reports are confidential and

may only be disclosed to legally authorized individuals or entities

Rebating

occurs if a buyer of an insurance policy is given anything of significant value as an inducement to purchase or renew a policy

False advertising: No insurance company may issue or circulate any illustration or statement which...

offers to conduct insurance business in New York that the company is not authorized to transact

No person, at any time prior to, or at the time of, the application for, or issuance of, a policy, or during the two-year period commencing with the date of issuance of the policy...

shall enter into a life settlement contract,

New York Producer Compensation Transparency regulation

the purpose is to regulate the acts and practices of insurers and insurance producers with respect to transparency of compensation paid to insurance producers and their role in insurance transactions in this State

Unfair discrimination is

the unequal application of the principles used to approve, rate, set premiums, and issue insurance policies.

penalty for knowingly leaving info out of the written disclosure

then the Superintendent, in addition to any other penalty prescribed by law, may require the life settlement provider to pay to the people of this state an amount up to $45,000.

If the purchaser requests more information about the producer's compensation prior to the issuance of the insurance contract, the producer shall disclose the following information to the purchaser

--A description of the nature, amount and source of any compensation to be received by the producer or any parent, subsidiary or affiliate based in whole or in part on the sale; --A description of any alternative quotes presented by the producer, including the coverage, premium and compensation that the insurance producer or any parent, subsidiary or affiliate would have received based in whole or in part on the sale of any such alternative coverage; --A description of any material ownership interest the insurance producer or any parent, subsidiary or affiliate has in the insurer issuing the insurance contract or any parent, subsidiary or affiliate; --A description of any material ownership interest the insurer issuing the insurance contract or any parent, subsidiary or affiliates has in the insurance producer or any parent, subsidiary or affiliate; and --A statement whether the insurance producer is prohibited by law from altering the amount of compensation received from the insurer based in whole or in part on the sale.

An insurance producer selling an insurance contract shall disclose the following information to the purchaser at the time of application

--A description of the role of the insurance producer in the sale; --Whether the insurance producer will receive compensation from the selling insurer or other third party; --Based in whole or in part on the insurance contract the producer sells; --That the compensation paid to the insurance producer may vary depending on a number of factors, including (if applicable) the insurance contract and the insurer that the purchaser selects, the volume of business the producer provides to the insurer or the profitability of the insurance contracts that the producer provides to the insurer; and --That the purchaser may obtain information about the compensation that is expected to be received by the producer based in whole or in part on the sale, and the compensation expected to be received based in whole or in part on any alternative quotes presented by the producer, by requesting such information from the producer.

The consumer must receive an initial privacy notice and an annual privacy notice. The notice must contain the following:

--The categories of nonpublic personal financial information that the licensee collects and/or discloses; --The categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal financial information; --The categories of nonpublic personal financial information about the licensee's former customers that the licensee discloses; --An explanation of the consumer's right to opt-out of the disclosure of nonpublic personal financial information to nonaffiliated third parties; --Any disclosures the licensee makes under the Federal Fair Credit Reporting Act; and --The licensee's confidentiality and security of personal information policies.

Contract for annuities, except group annuities, must contain the following provisions:

--The insured is entitled to a grace period of 31 days following the due date of any premium, to pay the insurer; --Any statements in the policy will be incontestable after it has been in force for a period of 2 years; --The policy and the application constitute the entire contract between the parties; --If any misstatement in age or sex has been made on the application, the amount payable or eligible benefits will be the amounts and benefits payable had the correct age or sex been given; --The insurer must annually ascertain and apportion any divisible surplus accruing on the contract; --The policy may be reinstated within 3 years of the date the insured defaulted on payments;

Contract for annuities, except group annuities, must contain the following provisions:

--The policyholder is allowed to return the policy within a period not less than 10 days and not more than 30 days and receive a refund of the first premium payment, as long as he surrenders the policy and files a written request for cancellation; --If the policyholder sends a written request to receive the statement of the cash surrender value of the policy, he must receive it within 20 business days; --Upon cessation of payment of considerations under a contract, the company will grant a paid-up annuity benefit on a plan stipulated in the contract; --A statement of the mortality table and any interest rates used in calculating any minimum paid-up annuity or cash surrender values; --A statement that the paid-up annuity amount may not be less than the minimum benefit benefits required by law.

Producer Compensation Transparency regulation does not apply to:

--To the placement of reinsurance; --To the placement of insurance with a captive insurance company; --To an insurance producer that has no direct sales or solicitation contact with the purchaser, which may include wholesale brokers or managing general agents; --To a sale of insurance by a person who is not required to be licensed as an insurance producer for the purposes of that sale; or --To renewals, except that if the purchaser requests more information about the producer's compensation less than 30 days prior to a renewal or less than 30 days after a renewal, the insurance producer shall disclose to 4 the purchaser in a prominent writing the information within five business days.

Change of Address (All Addresses, Including Email) (2134; Reg 5, Part 21.4; Reg 6, Part 22.3; Reg 7, Part 23.4)

A licensee must inform the Superintendent of a change of address within 30 days of the change.

The Superintendent will find an insurer guilty of controlled business if 10% of the aggregate net commissions received during a 12-month period resulted from insurance on the following:

A spouse, or corporation that the applicant or his or her spouse owns more than 50% and any affiliated corporations The members of an applicant's firm or association and their spouses and of the owners of any interest in such firm and their spouses; The shareholders of an applicant's corporation and their respective spouses

Suitability information includes the following information:

Age; Annual income; Financial situation, experience, and objectives; Intended use of the annuity; Liquidity needs and net worth; and Risk tolerance.

Agents must make every effort to determine the suitability of the life insurance purchase for clients.

Agents should gather information regarding client's financial situation to assist in determining which life insurance product best matches the client's needs

Superintendent shall have the power to prescribe and withdraw or amend, in writing, regulations: governing the duties assigned to the members of the staff of the department

All orders made by the Superintendent must be made in writing.

certificate of authority

An authorized insurer must be issued this by the Superintendent in order to transact insurance in New York.

Solvency is an insurer's financial stability. An insolvent insurer is one that cannot meet its claims liabilities

An insurer must have enough assets in its reserve to cover all liabilities.

Policy Summary means a written statement describing the elements of the policy.

An insurer must provide a policy summary to prospective buyers before accepting the applicant's initial premium

Any inducement in the sale of insurance that is not specified in the insurance contract itself is a rebate

Any inducement in the sale of insurance that is not specified in the insurance contract itself is a rebate

The life settlement broker shall provide the owner with a separate written document *broker disclosure of offers*

At a minimum, the document shall state: --The name, business address, telephone number and e-mail address of the life settlement broker; --A full, complete and accurate description of all the offers, counter-offers, acceptances and rejections relating to the proposed life settlement contract; --Any affiliations or contractual arrangements with any life settlement provider, other life settlement broker, life settlement intermediary or any financing entity; --The gross amount to be paid pursuant to the life settlement contract, -- the net amount of the proceeds to be paid to the owner pursuant to the life settlement contract, --the amount of compensation to be paid to the life settlement broker pursuant to the life settlement contract, --the name of such life settlement broker. --A complete reconciliation of the gross offer or bid by the life settlement provider to the net amount of proceeds or value to be received by the owner.

License Display (Reg 125, Part 34.5)

At each office location, the establishing insurer must prominently display the license or licenses of the supervising person responsible for that place of business.

Applicants must be furnished with a Buyer's Guide at or prior to the time an application is taken

Buyer's Guide= Document prepared by the NAIC which explains the type of coverages available to buyers

Section 529 plan is a tax-advantaged savings plan to fund higher education costs.

Contributions are not federally tax-deductible, but some states may allow the contributor to deduct all or part of the state income tax **To avoid taxes and penalties, withdrawals must be made strictly for eligible college expenses.

Safeguards to protect customer information:

Customer records are kept confidential and are secure and Protection is provided to ward off potential threats to customer records and unauthorized access.

Every person holding an insurance license must, during each 24-month licensing period, successfully complete education courses in their respective fields.

Each person will be required to attest, under penalty of perjury, to completing the required CE hours and must also be prepared to submit proof of completion upon request. Licensees must complete 15 hours of continuing education every two years.

Assumed Names (2102(f))

Every licensee must notify the Superintendent if they change their legal name and may not use any name that has not been pre-approved by the Superintendent.

Advertising (2122)

No insurer may make or issue any advertisement which announces the financial condition of any insurer, calls attention to any unauthorized insurer, or does not contain the name and address of the insurer

operating without a license

No person may accept any commission, service fee, brokerage or other valuable consideration for selling, soliciting, or negotiating insurance, without a requisite license

All life insurance companies licensed in New York to write life or accident or health policies

are required to be members of the association and will be responsible for an insolvent member's settlement liabilities. **The maximum amount of protection provided is $500,000 per life with an aggregate maximum of $1,000,000 per contract.

Replacement is

defined as a transaction in which new life insurance is bought, --the insured's existing life insurance is being surrendered to the new insurer or amended and reissued with a reduction in cash value --insurer must inform of replacement regulations and must get the applicants signature regarding replacement *The insured must have at least 60 days to return the policy.

life settlement provider or life settlement broker shall provide the owner with a separate written document conspicuously displaying the information and disclosures required

document shall be signed by the owner and life settlement provider no later than the date the life settlement contract is signed by all parties.

HIPAA privacy rule applies to health insurance plans, and health care providers who transmit health information,

establishes national standards for protecting health information, with special regard to the use and disclosure of individual health information, which is referred to as protected health information

Every licensee may renew their license for the next 24-month period by

filing an application, paying a required fee, and remanding in good standing with the Superintendent

financial Services Modernization Act was passed in 1999 with the purpose of allowing financial entities to merge and accommodate greater competition

gave insurers the ability to merge with banks, and either financial institution to perform the duties of both

Superintendent is the head of the insurance department and is appointed by the governor with the advice of the senate

has the power to examine and investigate the affairs of any person in order to determine whether the person has violated any regulation.

If an individual under a group life insurance policy becomes ineligible under the group policy,

he must have the right to obtain an individual policy, without evidence of insurability, *must submit app. and pay first premium

"Gross amount to be paid"

means the total amount or value to be paid by the life settlement provider for the purchase of one or more life insurance policies, inclusive of commissions and fees

"Gross offer or bid"

shall mean the total amount or value offered by the life settlement provider for the purchase of one or more life insurance policies, inclusive of commissions and fees.

life settlement contract is an agreement establishing the terms under which compensation is provided to an owner, which compensation is less than the expected death benefit of the policy, in return for the assignment, transfer, sale, release, devise or bequest of any portion of:

the death benefit; the ownership of the policy; or any beneficial interest in the policy, or in a trust or any other entity that owns the policy, where a primary purpose of the transaction is to acquire the policy.

When an insurer terminates an agent's appointment,

the insurer must file with the Superintendent within 30 days a statement of the facts relative to such termination for cause

The Superintendent has the power

to examine and investigate into the affairs of any person in order to determine whether the person has violated any regulation

The Life Insurance Company Guaranty Corporation of New York

was created by to protect New York state residents who are policyholders and beneficiaries of policies issued by an impaired or insolvent life insurance company, up to specified limits.

The following are not life settlement contracts:

--An assignment of a policy as collateral for a loan by any depository institution insured by the FDIC or the National Credit Union Administration; --An assignment as collateral on a loan; --A policy loan, payment of surrender benefits or other policy benefits; --A 1035 exchange; --An agreement made by an individual to take an assignment, purchase, or otherwise receive the death benefit or ownership of any portion of a policy on the life of a single insured or lives of joint insureds; provided that, in a calendar year, the individual enters into no other agreement to take an assignment, purchase, or otherwise receive the death benefit or ownership of any portion of a policy or policies on the life of any other insured or lives of any other joint insureds; --An agreement to assign, transfer or pledge a settled policy to a licensed life settlement provider, an accredited investor or qualified institutional buyer, financing entity, special purpose entity, or related provider trust; --An agreement where all the parties are closely related to the insured by blood or law or have a lawful substantial economic interest in the continued life, health and bodily safety of the person insured, or are trusts established primarily for the benefit of such parties; --Any designation, consent or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee; --A bona fide business succession planning arrangement between one or more shareholders in a corporation, partners in a partnership or members in a limited liability company; or --A corporate or pension benefit plans.

Qualified Institutional Buyer (7802(r))

--Any insurance company; --Any investment company registered under the Investment Company Act or any business development company; --Any Small Business Investment Company licensed by the U.S. Small Business Administration; --Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees; --Any employee benefit plan; --Any trust fund whose trustee is a bank or trust company except as participants individual retirement accounts or HR 10 plans; --Any business development company; --Any organization, corporation (other than a bank or a foreign bank or savings and loan association or equivalent institution), partnership, or Massachusetts or similar business trust; and; --Any investment adviser registered under the Investment Advisers Act.

A misrepresentation is simply a lie. .

--Any statement representing a health discount plan (HMO) as a form of insurance is a misrepresentation. --Relating only the benefits and not including a description of conditions or limitations is misrepresenting the policy. --Suggesting a policy is better suited for a prospective applicant than the facts would indicate to a reasonable person is misrepresentation

Every applicant for an insurance license must conform with the following requirements:

--Applicant must be at least 18 years of age by the time the license is issued; --Applicant must file the proper application forms for the type of license he wishes to apply for; --Applicant must complete a training course that has been approved by the New York State Department of Financial Services; and --Applicant must successfully pass a written examination.

the Superintendent may levy a civil penalty not to exceed $5,000 plus the amount of the claim for each violation on a person who is found to have:

--Committed a fraudulent insurance act, fraudulent life settlement act; or --Knowingly and with intent to defraud files, makes, or assists, solicits or conspires with another to file or make an application for a premium reduction containing any materially false information or which, for the purpose of misleading, conceals information concerning any material fact.

A written examination and pre-licensing education for Broker licensure is not required of applicants who:

--Have a life insurance producer license issued in New York, for at least 1 year; --Any individual whose license has been revoked or suspended; or --Any applicant who has passed the written examination for a life settlement broker's license and was licensed as such, or of an applicant who was licensed as a life settlement broker but did not pass such an examination, as long as the applicant applies for the license within two years following the date of termination of the applicant's license.

unfair claim settlement or compromise practices:

--Misrepresenting pertinent policy benefits and provisions; --Failing to respond in a reasonable amount of time to a claims inquiry or attempting to delay settlement; --Failing to complete an investigation of a claim within a reasonable time; --Failing to explain the ground for claim denial within 30 working days; --Compelling insured to institute litigation in order to recover amounts due; and --Failing to promptly disclose coverage.

discloser of insureds identity is permitted if it is:

--Necessary to effect a life settlement contract between the owner and a life settlement provider and the owner and insured have provided prior written consent to the disclosure; --Necessary to effectuate the sale or transfer of a life settlement contract or a settled policy, or interest therein, provided that every sale is conducted in accordance with applicable state and federal law and provided further that the owner and the insured have both provided prior written consent to the disclosure; --Provided in response to an investigation or examination by the Superintendent, any other governmental officer or agency, or a self-regulating entity established to federal securities law; --A term or condition to the transfer of a policy by one licensed life settlement provider to another licensed life settlement provider, in which case the receiving life settlement provider shall be required to comply with the confidentiality requirements; --Necessary to allow the life settlement provider or life settlement broker, or any authorized representative thereof to administer the insurance policy, or to determine health status; --Required to purchase insurance; or --Otherwise permitted by the Superintendent.

The Superintendent, after giving notice and an opportunity to be heard, may terminate, suspend, refuse to renew, or revoke the license of an insurance producer if the producer has committed any of the following acts:

--Providing misleading information on license application; --Violating any insurance laws; --Obtaining a license through fraud; --Using fraudulent, dishonest, or coercive practices; --Misappropriation of money; --Committing a felony, unfair trade practices, or fraud; or --Failing to pay taxes.

It is illegal to:

--Refuse to insure or to limit the amount of coverage offered to an individual solely because of the individual's sex, marital status, race, religion, or national origin; --Refuse to insure solely because another insurer has refused to write a policy or has cancelled an existing policy on that person; or --Terminate or modify coverage or refuse to renew coverage solely because the applicant or insured is mentally or physically impaired.

To appoint a producer, the appointing insurer will file, in a format approved by the Superintendent, a notice of appointment within 15 days from the date the agency contract is executed or the first insurance application is submitted. Certificates of appointment will be valid until

--Terminated by the appointing insurer after a termination in accordance with the agency contract; --The license is suspended or revoked by the Superintendent; or --The license expires and is not renewed

A life settlement intermediary is a person who maintains an electronic or other facility or system, for the disclosure, through a forum of offers and counteroffers, to sell or purchase a policy for a life settlement contract

--delivers to a life settlement provider an offer from a life settlement broker or owner to sell a policy; --or an owner or life settlement broker an offer from a life settlement provider to purchase a policy.

Superintendent may issue a life settlement provider license to any person who is deemed by the Superintendent to be trustworthy and competent to act as a life settlement provider and who is otherwise qualified and who has complied with the prerequisites.

Every license issued shall expire on June 30 of odd-numbered years.

Every license issued to an individual who was born in an odd-numbered year shall expire on the individual's birthday in each odd-numbered year.

Every license issued to an individual who was born in an even-numbered year shall expire on the individual's birthday in each even-numbered yea **Business entity licenses expire June 30th of odd-numbered years.

Failure to attend a hearing or to provide testimony or evidence when requested is a misdemeanor.

Failure to attend a hearing or to provide testimony or evidence when requested is a misdemeanor.

While purchase of a life settlement may seem like a simple way to get immediate cash, there are several drawbacks to consider.

First of all, life settlement payouts may be subject to creditors' claims if the insured has debt. Additionally, owners may be unable to receive benefits through Medicaid or Supplemental Social Security Income.

the Superintendent may deem it appropriate to send a cease and desist order,

If the licensee fails to appear at the hearing or the Superintendent determines that the evidence proves the licensee committed the violation --require the licensee to stop committing the violation.

Any violations may result in the licensee owing a fine not to exceed $500 per violation, and not to exceed an aggregate sum for all offenses of $2,500

If the licensee's license has not been terminated or revoked, but merely suspended, and he does not pay the fine within 20 days of receiving notice,

If the Superintendent requests information from any person, that person has 15 days to respond in good faith.

If the person fails to respond, the Superintendent may, after notice and a hearing, fine that person up to $500 per day for each day a response is not received, up to $10,000.

business of life settlement is an activity involving offering to enter into, soliciting, negotiating, procuring, effectuating, monitoring, or tracking life settlement contracts.

These include such acts or transactions established by mail, and doing or proposing to do any business in substance equivalent to the business of life settlements in a manner designed to evade the laws governing life settlement contracts.

A covered entity may use and disclose protected health information in the following situations:

To the individual; For treatment, payment and health care operations; For opportunity for the individual to agree or object (the individual is asked if the information may be disclosed); Incident to an otherwise permitted use and disclosure; Public interest and benefit activities (for one of the 12 national priority purposes), without the individual's authorization or permission; and Limited data set for research, public health or health care operations.

Individuals found to have misappropriated, mismanaged or embezzled funds while engaged in the business of insurance

are subject to federal criminal charges including a fine of up to $50,000 and 10 years in prison

contract must contain a clear statement that the death benefit may be reduced if an accelerated death benefit is paid

contract must contain a clear statement that the death benefit may be reduced if an accelerated death benefit is paid

Superintendent may require any individual named in the application for a life settlement license to submit a set of fingerprints,

fingerprints shall be submitted to the Division of Criminal Justice Services for a state criminal history record check, and may be submitted to the Federal Bureau of Investigation for a national criminal history record check

No person licensed as a life settlement broker may receive any compensation

for examining, appraising, reviewing or evaluating any life settlement contract or for making recommendations or giving advice with regard to such contract;

A minor above the age of 14 years and 6 months

is allowed to enter into a contract for insurance, as well as any person the minor has an insurable interest in.

A financing entity

is an accredited investor whose principal activity in connection with the transaction is providing funds to establish the life settlement contract --finances the acquisition of a life settlement contract

An insurer must obtain permission from the Superintendent in order to sell variable life insurance policies and

must also submit an annual report showing the status of all variable accounts.

All life and health insurers that write less than $250,000 of premiums in a calendar year

must file a financial statement with the Superintendent within five months of the end of the year.

Every insurance agent or broker must be responsible in a fiduciary capacity for all funds received or collected as insurance,

must not without the express consent of his principal, mingle any insurance funds with his own personal funds

No insurer may knowingly issue any life insurance policy that...

purports (misleads) to have been issued more than 6 months prior to when the policy was made.

insurance fraud prevention act

purpose is to prevent and reduce insurance fraud, as well as to establish the Insurance fraud bureau

A variable life insurance policy is any individual policy, which provides for life insurance with the amount or duration of the death benefit varying according to:

the investment experience of any separate account or accounts established and maintained by the insurer.

No person licensed as an insurance agent, broker or consultant may receive any fee or commission or compensation for examining, appraising, reviewing or evaluating any insurance policy, bond, annuity or pension or profit-sharing contract, plan or program or for making recommendations or giving advice with regard to any of the above,

unless the commission is based upon a written memorandum signed by the party to be charged and specifying or clearly defining the amount or extent of such compensation

No insurance producer or adjuster may receive any commissions or fees in connection with insurance services rendered to the state, its agencies, departments

unless the producer or adjuster actually placed the coverages or rendered insurance services to the state or its agencies