Section 212. As used in this section and sections 213 to 223E, inclusive, the following words shall have the following meanings unless the context clearly requires otherwise:''Advertisement'', a written, electronic or printed communication or a communication by means of a recorded telephone message or transmitted on radio, television, the Internet or similar communications media, published, disseminated, circulated or placed before the public, directly or indirectly, for the purpose of creating an interest in or inducing a person to purchase or sell, assign, devise, bequest or transfer the death benefit or ownership of a life insurance policy or an interest in a life insurance policy pursuant to a life settlement contract.''Business of life settlements'', an activity including, but not lim
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Section 212. As used in this section and sections 213 to 223E, inclusive, the following words shall have the following meanings unless the context clearly requires otherwise:''Advertisement'', a written, electronic or printed communication or a communication by means of a recorded telephone message or transmitted on radio, television, the Internet or similar communications media, published, disseminated, circulated or placed before the public, directly or indirectly, for the purpose of creating an interest in or inducing a person to purchase or sell, assign, devise, bequest or transfer the death benefit or ownership of a life insurance policy or an interest in a life insurance policy pursuant to a life settlement contract.''Business of life settlements'', an activity including, but not limited to, offering to enter into, soliciting, negotiating, procuring, effectuating, monitoring or tracking a life settlement contract.''Chronic illness'', a condition because of which an individual has been certified by a licensed health care practitioner as: (1) being unable to perform at least 2 activities of daily living; (2) requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment; or (3) having a level of disability similar to that described in clause (1) as determined under regulations promulgated by the United States Secretary of Health and Human Services.''Financing entity'', an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a life settlement provider, credit enhancer or any entity that has a direct ownership in a policy or certificate that is the subject of a life settlement contract, whose principal activity related to the transaction is providing funds to effect the life settlement contract or purchase of a policy and who has an agreement in writing with a life settlement provider to finance the acquisition of a life settlement contract; provided, however, that ''financing entity'' shall not include a nonaccredited investor or purchaser.''Financing transaction'', a transaction in which a licensed life settlement provider obtains financing from a financing entity including, but not limited to, secured or unsecured financing, a securitization transaction or a securities offering which is registered or exempt from registration under federal and state securities laws.''Fraudulent life settlement act'', an act referenced in subsections (b) and (c) of section 223A.''Individual identification data'', an insured's name, address, telephone number, facsimile number, electronic mail address, photograph or likeness, employer, employment status, social security number or any other information that is likely to lead to the identification of the insured.''Insured'', a person covered under the policy being considered for sale in a life settlement contract.''Licensee'', a person licensed as a life settlement provider or life settlement broker by the commissioner of insurance.''Life insurance producer'', a person licensed as a resident or nonresident insurance producer who has received qualification for a license in a line of authority for life insurance coverage under sections 162H to 162X, inclusive.''Life settlement broker'', a person who, on behalf of an owner and for a fee, commission or other consideration, offers or attempts to negotiate a life settlement contract between an owner and a life settlement provider.''Life settlement contract'', (1) a written agreement entered into between a life settlement provider and an owner, establishing the terms under which compensation or anything of value shall be paid, which compensation or thing of value is less than the expected death benefit of the insurance policy or certificate, in return for the owner's assignment, transfer, sale, devise or bequest of the death benefit or any portion of an insurance policy or certificate of insurance for compensation; provided, however, that the minimum value for a life settlement contract shall be greater than a cash surrender value or accelerated death benefit available at the time of an application for a life settlement contract;(2) the transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns such policy if the trust or other entity was formed or availed of for the principal purpose of acquiring a life insurance contract, or multiple life insurance contracts, which life insurance contract or contracts insures the life of a person residing in the commonwealth; or(3) a premium finance loan made for a policy on or before the date of issuance of the policy where: (i) the loan proceeds are not used solely to pay premiums for the policy and any costs or expenses incurred by the lender or the borrower in connection with the financing; (ii) on the date of the premium finance loan, the owner receives a guarantee of the future life settlement value of the policy; or (iii) the owner agrees on the date of the premium finance loan to sell the policy or a portion of its death benefit on any date following the issuance of the policy; provided, however, that a ''life settlement contract'' shall not include:(i) a policy loan by a life insurance company pursuant to the terms of the life insurance policy or accelerated death provisions contained in the life insurance policy, whether issued with the original policy or as a rider;(ii) a premium finance loan or a loan made by a bank or other licensed financial institution provided that neither a default on such loan nor the transfer of a policy in connection with such default is pursuant to an agreement or understanding with another person to evade regulation under sections 213 to 223E, inclusive;(iii) a collateral assignment of a life insurance policy by an owner;(iv) a loan made by a lender under chapter 255C provided that loan is not described in clause (3) and is not otherwise a life settlement contract;(v) an agreement where all parties: (A) are closely related to the insured by blood or law; (B) have a lawful substantial economic interest in the continued life, health and bodily safety of the person insured; or (C) are trusts established primarily for the benefit of the parties;(vi) a 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;(vii) a bona fide business succession planning arrangement: (A) between shareholders in a corporation or between a corporation and any of its shareholders or any trusts established by its shareholders; (B) between partners in a partnership or between a partnership and any of its partners or any trusts established by its partners; or (C) between members in a limited liability company or between a limited liability company and any of its members or any trusts established by its members;(viii) an agreement entered into by a service recipient or a trust established by the service recipient and a service provider, or a trust established by the service provider that performs significant services for the service recipient's trade or business; or(ix) any other contract, transaction or arrangement that the commissioner determines is not of the type intended to be regulated by sections 213 to 223E, inclusive.''Life settlement provider'', a person who enters into a life settlement contract with an owner; provided, however, that a life settlement provider shall not include: (1) a bank, savings bank, savings and loan association or credit union; (2) a licensed lending institution or creditor or secured party pursuant to a premium finance loan agreement which takes an assignment of a life insurance policy or certificate issued pursuant to a group life insurance policy as collateral for a loan; (3) the issuer of a life insurance policy or rider which provides accelerated death benefits pursuant to the contract or cash surrender value; (4) a natural person who enters into or effectuates not more than 1 agreement in a calendar year for the transfer of a life insurance policy or certificate issued pursuant to a group life insurance policy for compensation or anything of value less than the expected death benefit payable under the policy; (5) a financing entity; (6) a purchaser; (7) an authorized or eligible insurer that provides stop loss coverage to a life settlement provider, purchaser, financing entity, special purpose entity or related provider trust; (8) a related provider trust; (9) a special purpose entity; (10) a life settlement broker; or (11) an accredited investor or qualified institutional buyer as defined in Regulation D of Rule 501 of the federal Securities Act of 1933, 17 C.F.R. section 230.501, as amended, or rule 144A of the federal Securities Act of 1933, 17 C.F.R. 230.144A, as amended, who purchases a life settlement policy from a life settlement provider.''Net death benefit'', the amount of the life insurance policy or certificate to be settled less any outstanding debts or liens.''Owner'', the owner of a life insurance policy or a certificate holder under a group policy who enters or seeks to enter into a life settlement contract; provided, however, that an ''owner'' shall not be limited to an owner of a life insurance policy or a certificate holder under a group policy that insures the life of an individual with a terminal illness or chronic illness or condition except where specifically addressed; and provided further, that ''owner'' shall not include: (1) a life settlement provider or broker; (2) a qualified institutional buyer as defined in rule 144A of the federal Securities Act of 1933, 17 C.F.R. 230.144A, as amended; (3) a financing entity; (4) a special purpose entity; or (5) a related provider trust.''Person'', a natural person or legal entity including, but not limited to, a partnership, limited liability company, association, trust or corporation.''Policy'', an individual or group policy, group certificate, contract or arrangement of life insurance owned by a resident of the commonwealth, regardless of whether delivered or issued for delivery in the commonwealth.''Premium finance loan'', a loan made primarily for the purpose of making premium payments on a life insurance policy and such loan is secured by an interest in the life insurance policy.''Purchaser'', a person who pays compensation or consideration for a beneficial interest in a trust which is vested with, or for the assignment, transfer or sale of, an ownership or other interest in a life insurance policy or a certificate issued pursuant to a group life insurance policy that has been the subject of a life settlement contract.''Related provider trust'', a titling trust or other trust established by a licensed life settlement provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction; provided, however, that in order to qualify as a related provider trust, the trust shall have a written agreement with a licensed life settlement provider under which the licensed life settlement provider shall be responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files relating to life settlement transactions available to the commissioner as if those records and files were maintained directly by the licensed life settlement provider.''Settled policy'', a life insurance policy or certificate that has been acquired by a provider pursuant to a life settlement contract.''Special purpose entity'', a person other than a natural person formed solely to provide, either directly or indirectly, access to institutional capital markets: (i) for a financing entity or life settlement provider; or (ii) in connection with a transaction in which the securities in the special purpose entity are acquired by the owner or by a qualified institutional buyer as defined in Rule 144 of the federal Securities Act of 1933, as amended, or the securities pay a fixed rate of return commensurate with established asset-backed institutional capital markets.''Stranger-originated life insurance'', an act, practice or arrangement to initiate the issuance of 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 life of the insured; provided, however, that such acts, practices or arrangements shall include, but not be limited to, cases in which life insurance is purchased with resources or guarantees from or through a person who, at the time of policy inception, could not lawfully initiate the policy 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; provided further, that trusts that are created to give the appearance of insurable interest and that are used to initiate policies for investors shall violate insurable interest laws and the prohibition against wagering on life; and provided further, that ''stranger-originated life insurance'' arrangements shall not include lawful life settlement contracts authorized in sections 213 to 223E, inclusive, or those practices set forth in clauses (i) to (ix), inclusive, in the definition of life settlement contract, provided that such life settlement contracts or practices are not part of a transaction otherwise prohibited by said sections 213 to 223E, inclusive.''Terminal illness'', a condition that a licensed health care professional certifies can reasonably be expected to result in death in 24 months or less.