§ 27-72-3. Licensing requirements.
(a) No person, wherever located, shall act as a provider or broker with an owner or multiple
owners who is a resident of this state without first having obtained a license from
the commissioner. If there is more than one owner on a single policy and the owners
are residents of different states, the life settlement contract shall be governed
by the law of the state in which the owner having the largest percentage ownership
resides or, if the owners hold equal ownership, the state of residence of one owner
agreed upon in writing by all owners.
(b) Application for a provider or broker license shall be made to the commissioner by
the applicant on a form prescribed by the commissioner, and the application shall
be accompanied by a fee reasonable in an amount established by the commissioner.
(c) A life insurance producer who has been duly licensed as a resident insurance producer
with a life line of authority in this state or his or her home state for at least
one year and is licensed as a nonresident producer in this state shall be deemed to
meet the licensing requirements of this section and shall be permitted to operate
as a broker.
(d) Not later than thirty (30) days from the first day of operating as a broker, the life
insurance producer shall notify the commissioner that he or she is acting as a broker
on a form prescribed by the commissioner, and shall pay any applicable fee to be determined
by the commissioner. Notification shall include an acknowledgement by the life insurance
producer that he or she will operate as a broker in accordance with this chapter.
(e) The insurer that issued the policy that is the subject of a life settlement contract
shall not be responsible for any act or omission of a broker or provider or purchaser
arising out of or in connection with the life settlement transaction, unless the insurer
receives compensation for the placement of a life settlement contract from the provider
or purchaser or broker in connection with the life settlement contract.
(f) A person licensed as an attorney, certified public accountant or financial planner
accredited by a nationally recognized accreditation agency, who is retained to represent
the owner, whose compensation is not paid directly or indirectly by the provider or
purchaser, may negotiate life settlement contracts on behalf of the owner without
having to obtain a license as a broker.
(g) Broker licenses may be renewed on a schedule prescribed by the commissioner and upon
payment of the reasonable renewal fee as prescribed by the commissioner. Failure to
pay the fee within the terms prescribed shall result in the automatic revocation of
the license requiring periodic renewal.
(h) The term of a provider license shall be perpetual; provided, that the provider files
the annual report and pays the fee as prescribed by the commissioner. Failure to file
the annual report or pay the fees on or before the due date shall result in immediate
suspension of the license.
(i) The applicant shall provide such information as the commissioner may require on forms
prepared by the commissioner. The commissioner shall have authority, at any time,
to require such applicant to fully disclose the identity of its stockholders (except
stockholders owning fewer than ten percent (10%) of the shares of an applicant whose
shares are publicly traded), partners, officers, and employees, and the commissioner
may, in the exercise of the commissioner's sole discretion, refuse to issue such a
license in the name of any person if not satisfied that any officer, employee, stockholder,
or partner thereof who may materially influence the applicant's conduct meets the
standards set forth in this chapter.
(j) Upon the filing of an application and the payment of the license fee, the commissioner
shall make an investigation of each applicant and may issue a license if the commissioner
finds that the applicant:
(1) If a provider, has provided a detailed plan of operation;
(2) Is competent and trustworthy and intends to transact its business in good faith;
(3) Has a good business reputation and has had experience, training, or education so as
to be qualified in the business for which the license is applied;
(4) If the provider applicant is a legal entity, is formed or organized pursuant to the
laws of this state or is a foreign legal entity authorized to transact business in
this state, or provides a certificate of good standing from the state of its domicile;
and
(5) Has provided to the commissioner an anti-fraud plan that meets the requirements of
this chapter and includes:
(i) A description of the procedures for detecting and investigating possible fraudulent
acts and procedures for resolving material inconsistencies between medical records
and insurance applications;
(ii) A description of the procedures for reporting fraudulent insurance acts to the commissioner;
(iii) A description of the plan for anti-fraud education and training of its underwriters
and other personnel; and
(iv) A written description or chart outlining the arrangement of the anti-fraud personnel
who are responsible for the investigation and reporting of possible fraudulent insurance
acts and investigating unresolved material inconsistencies between medical records
and insurance applications.
(k) The commissioner shall not issue any license to any nonresident applicant, unless
a written designation of an agent for service of process is filed and maintained with
the commissioner or unless the applicant has filed with the commissioner the applicant's
written irrevocable consent that any action against the applicant may be commenced
against the applicant by service of process on the commissioner.
(l) Each licensee shall file with the commissioner on or before the first day of March
of each year an annual statement containing such information as the commissioner by
rule may prescribe. The department may have this annual statement renewed and analyzed
by outside consultant(s) and the total cost of that review shall be borne by, billed
directly to, and paid by the provider filing the annual statement.
(m) A provider may not use any person to perform the functions of a broker as defined
in this chapter unless the person holds a current, valid license as a broker, and
as provided in this section.
(n) A broker may not use any person to perform the functions of a provider as defined
in this chapter unless such person holds a current, valid license as a provider, and
as provided in this section.
(o) A provider or broker shall provide to the commissioner new or revised information
about officers, ten percent (10%) or more stockholders, partners, directors, members,
or designated employees within thirty (30) days of the change.
(p) An individual licensed as a broker shall complete, on a biennial basis, fifteen (15)
hours of training related to life settlements and life settlement transactions, as
required by the commissioner; provided, however, that a life insurance producer who
is operating as a broker pursuant to this section shall not be subject to the requirements
of this subsection. Any person failing to meet the requirements of this subsection
shall be subject to the penalties imposed by the commissioner.