§ 27-72-13. Prohibited practices.
(a) It is unlawful for any person to:
(1) Enter into a life settlement contract if such person knows or reasonably should have
known that the life insurance policy was obtained by means of a false, deceptive,
or misleading application for such policy;
(2) Engage in any transaction, practice, or course of business if such person knows or
reasonably should have known that the intent was to avoid the notice requirements
of this chapter;
(3) Engage in any fraudulent act or practice in connection with any transaction relating
to any settlement involving an owner who is a resident of this state;
(4) Issue, solicit, market, or otherwise promote the purchase of an insurance policy for
the purpose of or with an emphasis on settling the policy;
(5) Enter into a premium finance agreement with any person or agency, or any person affiliated
with such person or agency, pursuant to which such person shall receive any proceeds,
fees, or other consideration, directly or indirectly, from the policy or owner of
the policy or any other person with respect to the premium finance agreement or any
settlement contract or other transaction related to such policy that are in addition
to the amounts required to pay the principal, interest, and service charges related
to policy premiums pursuant to the premium finance agreement or subsequent sale of
such agreement; provided, further, that any payments, charges, fees, or other amounts
in addition to the amounts required to pay the principal, interest, and service charges
related to policy premiums paid under the premium finance agreement shall be remitted
to the original owner of the policy or to his or her estate if he or she is not living
at the time of the determination of the overpayment;
(6) With respect to any settlement contract or insurance policy and a broker, knowingly
solicit an offer from, effectuate a life settlement contract with, or make a sale
to any provider, financing entity, or related provider trust that is controlling,
controlled by, or under common control with such broker unless such relationship has
been disclosed to the owner;
(7) With respect to any life settlement contract or insurance policy and a provider, knowingly
enter into a life settlement contract with an owner, if, in connection with such life
settlement contract, anything of value will be paid to a broker that is controlling,
controlled by, or under common control with such provider or the financing entity
or related provider trust that is involved in such settlement contract unless such
relationship has been disclosed to the owner;
(8) With respect to a provider, enter into a life settlement contract unless the life
settlement promotional, advertising, and marketing materials, as may be prescribed
by regulation, have been filed with the commissioner. In no event shall any marketing
materials expressly reference that the insurance is "free� for any period of time.
The inclusion of any reference in the marketing materials that would cause an owner
to reasonably believe that the insurance is free for any period of time shall be considered
a violation of this chapter; or
(9) With respect to any life insurance producer, insurance company, broker, or provider
make any statement or representation to the applicant or policyholder in connection
with the sale or financing of a life insurance policy to the effect that the insurance
is free or without cost to the policyholder for any period of time unless provided
in the policy.
(b) A violation of this section shall be deemed a fraudulent life settlement act.