§ 10-7-702 — Definitions

As used in this part 7, unless the context otherwise
requires:

(1) Business entity means a legal entity, including a joint venture,
partnership, corporation, limited liability company, or business trust.

(2) Person means any natural person, business entity, association, or trust.

(3) Policy means an individual or group policy, group certificate, contract,
or arrangement of life insurance affecting the rights of a resident of this state or
bearing a reasonable relation to this state, regardless of whether delivered or
issued for delivery in this state.

(4) Settlor means a person who executes a trust instrument, including a
person for whom a fiduciary or agent is acting.

(5) Stranger originated life insurance means an act, practice, or
arrangement to initiate a life insurance policy for the benefit of a third-party
investor who, at the time of policy origination, has no insurable interest in the
insured. Stranger originated life insurance practices include cases in which life
insurance is purchased with resources or guarantees from or through a person or
entity who, at the time of inception, could not lawfully initiate the policy themselves
and where, at the time of inception, there is an arrangement or agreement, whether
verbal or written, to directly or indirectly transfer the ownership of the policy or the
policy benefits to a third party. Trusts that are created to give the appearance of
insurable interest and are used to initiate policies for investors violate insurable
interest laws and the prohibition on wagering on life. Stranger originated life
insurance does not include lawful viatical settlement contracts as permitted by
part 6 of this article, provided that such contracts are not for the purpose of
evading regulation under this article.

Legislative History

Source: L. 2011: Entire part added, (SB 11-182), ch. 227, p. 972, � 1, effective May 27.