Code-Co's Internet Access to Utah Law: http://www.code-co.com
[Utah Code Table of Contents]
[TITLE 31a. Table of Contents]
31A-36-101 Title.
This chapter is known as the "Viatical Settlements Act."
2003
31A-36-102 Definitions.
As used in this chapter:
(1) (a) "Advertising" means any communication placed before the public to:
(i) create an interest in viatical settlements; or
(ii) induce a person to sell a policy or an interest in a policy pursuant to a viatical settlement.
(b) "Advertising" includes the following, if the requirements of Subsection (1)(a) are met:
(i) any written, electronic, or printed communication;
(ii) any communication by means of recorded telephone messages;
(iii) any communication transmitted on radio, television, the Internet, or similar communications media; and
(iv) film strips, motion pictures, and videos.
(2) "Business of viatical settlements" includes the following:
(a) offering a viatical settlement;
(b) solicitation of a viatical settlement;
(c) negotiation of a viatical settlement;
(d) procurement of a viatical settlement;
(e) effectuation of a viatical settlement;
(f) purchasing a viatical settlement;
(g) investing in a viatical settlement;
(h) financing a viatical settlement;
(i) monitoring a viatical settlement;
(j) tracking a viatical settlement;
(k) underwriting a viatical settlement;
(l) selling a viatical settlement;
(m) transferring a viatical settlement;
(n) assigning a viatical settlement;
(o) pledging a viatical settlement; and
(p) otherwise hypothecating viatical settlements.
(3) "Chronically ill" means:
(a) being unable to perform at least two activities of daily living, such as eating, toileting, moving from one place to another, bathing, dressing, or continence;
(b) requiring substantial supervision for protection from threats to health and safety because of severe cognitive impairment; or
(c) having a level of disability similar to that described in Subsection (3)(a).
(4) (a) "Financing entity" means a person:
(i) that has direct ownership in a policy that is the subject of the viatical settlement;
(ii) whose principal activity related to the transaction is providing money to effect the viatical settlement; and
(iii) that has an agreement in writing with one or more licensed providers of viatical settlements to finance the acquisition of one or more viatical settlements.
(b) "Financing entity" includes, if the requirements of Subsection (4)(a) are met, the following:
(i) an underwriter;
(ii) a placement agent;
(iii) an enhancer of credit;
(iv) a lender;
(v) a purchaser of securities; and
(vi) a purchaser of a policy from a provider of viatical settlements.
(c) "Financing entity" does not include a nonaccredited investor or a purchaser of viatical settlements.
(5) "Policy" means:
(a) an individual or group policy;
(b) a group certificate; or
(c) a contract or arrangement of life insurance, whether or not delivered or issued for delivery in Utah:
(i) affecting the rights of a resident of Utah; or
(ii) bearing a reasonable relation to Utah.
(6) (a) "Producer of viatical settlements" means a person that on behalf of a viator and for consideration offers or attempts to negotiate a viatical settlement between the viator and one or more providers of viatical settlements.
(b) "Producer of viatical settlements" does not include an attorney licensed to practice law in any state, certified public accountant, or financial planner accredited by a nationally recognized accrediting agency:
(i) that is retained by the viator; and
(ii) whose compensation is not paid directly or indirectly by a provider or purchaser of viatical settlements.
(7) (a) "Provider of viatical settlements" means a person other than a viator that enters into or effectuates a viatical settlement.
(b) "Provider of viatical settlements" does not include:
(i) a licensed lender that takes an assignment of a policy as security for a loan, including a:
(A) bank;
(B) savings bank;
(C) savings and loan association;
(D) credit union; or
(E) other licensed lender;
(ii) the issuer of a policy providing accelerated benefits pursuant to the policy;
(iii) an authorized or eligible insurer that provides stop-loss coverage to:
(A) a provider of viatical settlements;
(B) a purchaser of viatical settlements;
(C) a financing entity;
(D) a special purpose entity; or
(E) a related provider trust;
(iv) a natural person that enters or effectuates no more than one agreement in a calendar year for the transfer of policies for a value less than the expected death benefit;
(v) a financing entity;
(vi) a special purpose entity;
(vii) a related provider trust;
(viii) a purchaser of viatical settlements; or
(ix) any of the following that purchases a viaticated policy from a provider of viatical settlements:
(A) an accredited investor as defined in Regulation D, Rule 501, 17 C.F.R. Sec. 230.501; or
(B) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A.
(8) (a) "Purchaser of viatical settlements" means a person that, to derive an economic benefit:
(i) gives a sum of money as consideration for a policy or an interest in the death benefits of a policy; or
(ii) owns, acquires, or is entitled to a beneficial interest in a trust that:
(A) owns a viatical settlement contract; or
(B) is the beneficiary of a policy that has been or will be the subject of a viatical settlement.
(b) "Purchaser of viatical settlements" does not include:
(i) a licensee under this chapter;
(ii) an accredited investor as defined in Regulation D, Rule 501, 17 C.F.R. Sec. 230.501;
(iii) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A;
(iv) a financing entity;
(v) a special purpose entity; or
(vi) a related provider trust.
(9) "Related provider trust" means a trust established by a licensed provider of viatical settlements or a financing entity solely to hold the ownership of or beneficial interests in purchased policies in connection with financing.
(10) "Special purpose entity" means an organization formed by a licensed provider of viatical settlements solely to enable the provider to gain access to institutional markets for capital.
(11) "Terminally ill" means having a condition that reasonably may be expected to result in death within 24 months.
(12) (a) "Viatical settlement" means a written agreement for the payment of anything of value, which is less than the expected death benefit of the policy, in exchange for the viator's assignment, sale, transfer, devise, or bequest of the death benefit or ownership of any portion of a policy.
(b) "Viatical settlement" includes:
(i) an agreement with a viator for a loan or other financing secured primarily by a policy; and
(ii) an agreement with a viator to transfer ownership or change the beneficiary in the future, regardless of the date of payment to the viator.
(c) "Viatical settlement" does not include:
(i) a loan by an insurer pursuant to the terms of a policy; or
(ii) a loan secured by the cash value of a policy.
(13) "Viaticated policy" means a policy that has been acquired by a provider of viatical settlements pursuant to a viatical settlement.
(14) (a) "Viator" means any of the following that seeks to enter into a viatical settlement:
(i) the owner of a policy; or
(ii) the holder of a certificate of insurance under a policy of group insurance.
(b) "Viator" is not limited to a person that is terminally ill or chronically ill except where that limitation is expressly provided.
(c) "Viator" does not include:
(i) a licensee under this chapter;
(ii) an accredited investor as defined in Regulation D, Rule 501, 17 C.F.R. Sec. 230.501;
(iii) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A;
(iv) a financing entity;
(v) a special purpose entity; or
(vi) a related provider trust.
2003
31A-36-103 Law governing.
If there is more than one viator on a single policy and
the viators are residents of different states, the law of
the state in which the viator having the largest percentage
ownership resides governs the viatical settlement. If the
viators own equal fractions of a policy, the viators may
agree in writing that the law of the state in which one resides
governs the viatical settlement.
2003
31A-36-104 License requirements, revocation, and denial.
(1) A person may not, without first obtaining a license from the commissioner, operate in or from this state as a provider or producer of viatical settlements. Viatical settlements are included within the scope of the life insurance producer line of authority.
(2) In addition to the requirements in Sections 31A-23a-111 , 31A-23a-112 and 31A-23a-113 , the commissioner may refuse to issue, suspend, revoke, or refuse to renew the license of a provider or producer of viatical settlements if the commissioner finds that:
(a) a provider of viatical settlements demonstrates a pattern of unreasonable payments to viators;
(b) the applicant or licensee, or an officer, partner, member, or key management personnel:
(i) has, whether or not a judgment of conviction has been entered by the court, been found guilty of, or pleaded guilty or nolo contendere to:
(A) a felony; or
(B) a misdemeanor involving fraud or moral turpitude; or
(ii) violated any provision of this chapter;
(c) a provider of viatical settlements has entered into a viatical settlement not approved under this chapter;
(d) a provider of viatical settlements has failed to honor obligations of a viatical settlement; or
(e) a provider of viatical settlements has assigned, transferred, or pledged a viaticated policy to a person other than:
(i) a provider of viatical settlements licensed under this chapter;
(ii) a purchaser of the viatical settlement;
(iii) an accredited investor as defined in Regulation D, Rule 501, 17 C.F.R. Sec. 230.501;
(iv) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A;
(v) a financing entity;
(vi) a special purpose entity; or
(vii) a related provider trust.
(3) If the commissioner denies a license application or
suspends, revokes, or refuses to renew the license of a provider
or producer of viatical settlements, the commissioner shall
conduct an adjudicative proceeding under Title 63, Chapter
46b, Administrative Procedures Act.
2003
31A-36-105 Filing and use of forms for viatical settlement and disclosure.
(1) Unless the form has been filed with the commissioner under Subsection 31A-21-201 (1), a person may not use a form for a:
(a) viatical settlement;
(b) disclosure to the viator;
(c) notice of intent to viaticate;
(d) verification of coverage; or
(e) application.
(2) The commissioner may prohibit the use of a form submitted under Subsection (1) pursuant to Subsection 31A-21-201 (3).
(3) The commissioner may require the submission of advertising
material before its use.
2003
31A-36-106 Reporting requirements and privacy.
(1) Each licensee under this chapter shall file with the commissioner on or before March 1 of each year an annual statement containing such information as the commissioner prescribes under Section 31A-36-119 , provided, however, that the information shall be limited to those transactions where the viator is a resident of Utah.
(2) Except as otherwise allowed or required by law, the following may not disclose the identity, financial information, or medical information of an insured to any other person:
(a) a provider of viatical settlements;
(b) a producer of viatical settlements;
(c) a producer of insurance;
(d) an information bureau;
(e) a rating agency or company; or
(f) any other person knowing the identity of an insured.
(3) Notwithstanding Subsection (2), a person may disclose the identity of an insured if the disclosure is:
(a) necessary to effect a viatical settlement between the viator and a provider of viatical settlements and both the viator and the insured have given prior written consent to the disclosure;
(b) furnished in response to an investigation or examination by the commissioner or another governmental officer or agency;
(c) furnished pursuant to Section 31A-36-114 ;
(d) a term of or condition to the transfer of a policy by one provider of viatical settlements to another provider;
(e) necessary to permit a financing entity, related provider trust, or special purpose entity to finance the purchase of a policy by a provider of viatical settlements and the insured has given prior written consent to the disclosure;
(f) necessary to allow the provider or producer of viatical settlements or their authorized representatives to make contacts to determine the health status of the viator; or
(g) required to purchase stop-loss coverage.
2003
31A-36-107 Examinations and retention of records.
(1) The commissioner may conduct an examination of a licensee under this chapter in accordance with Sections 31A-2-203 , 31A-2-203.5 , 31A-2-204 , and 31A-2-205 .
(2) A person required to be licensed under this chapter shall retain for five years copies of all:
(a) the following records, whether proposed, offered, or executed, from the date of the proposal, offer, or execution, whichever is later:
(i) contracts;
(ii) purchase agreements;
(iii) underwriting documents;
(iv) policy forms; and
(v) applications;
(b) checks, drafts, and other evidence or documentation relating to the payment, transfer, or release of money, from the date of the transaction; and
(c) records and documents related to the requirements of this chapter.
(3) This section does not relieve a person of the obligation to produce a document described in Subsection (2) to the commissioner after the expiration of the relevant period if the person has retained the document.
(4) Records required by this section to be retained must be legible and complete. They may be retained in any form or by any process that accurately reproduces or is a durable medium for the reproduction of the record.
(5) An examiner may not be appointed by the commissioner if the examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this chapter. This section does not automatically preclude an examiner from being:
(a) a viator;
(b) an insured in a viaticated policy; or
(c) a beneficiary in a policy that is proposed to be viaticated.
(6) (a) Examinees under this section shall reimburse the cost of any examination to the department consistent with Section 31A-2-205 .
(b) Notwithstanding Subsection (6)(a), individual producers
of viatical settlements are not subject to Section
31A-2-205
.
2003
31A-36-108 Required disclosures.
(1) With each application for a viatical settlement, a provider or producer of viatical settlements shall furnish to the viator any disclosures the commissioner may require under Section 31A-36-119 , in a separate document signed by the viator and the provider or producer, no later than the time the application for the viatical settlement is signed by all the parties.
(2) A provider of viatical settlements shall furnish to
the viator any disclosures the commissioner may require under
Section
31A-36-119
, conspicuously displayed in the viatical settlement
or in a separate document signed by the viator and the provider
of viatical settlements, no later than the time the viatical
settlement is signed by all parties.
2003
31A-36-109 General requirements.
(1) If a provider of viatical settlements transfers ownership or changes the beneficiary of a viaticated policy, the provider shall inform the insured of the transfer or change within 20 calendar days.
(2) A provider of viatical settlements that enters a viatical settlement shall first obtain:
(a) if the viator is the insured, a written statement from a licensed attending physician that the viator is of sound mind and under no constraint or undue influence to enter a viatical settlement;
(b) a witnessed document in which the viator represents that:
(i) the viator has a full and complete understanding of the viatical settlement and the benefits of the policy;
(ii) the viator has entered the viatical settlement freely and voluntarily; and
(iii) if applicable, the insured is terminally ill or chronically ill and that the illness was diagnosed after the policy was issued; and
(c) a document in which the insured consents to the release of the insured's medical records to:
(i) a provider of viatical settlements;
(ii) a producer of viatical settlements; and
(iii) the insurer that issued the policy covering the insured.
(3) Within 20 calendar days after a viator executes documents necessary to transfer rights under a policy, or enters into an agreement in any form, express or implied, to viaticate the policy, the provider of viatical settlements shall give written notice to the issuer of the policy that the policy has or will become viaticated. The notice must be accompanied by a copy of the documents required by Subsection (4).
(4) The provider of viatical settlements shall deliver a copy of the following to the insurer that issued the policy that is the subject of the viatical settlement:
(a) the medical release required under Subsection (2)(c);
(b) a copy of the viator's application for the viatical settlement; and
(c) the notice required under Subsection (3).
(5) The insurer shall complete and return a request for verification of coverage not later than 30 calendar days after the date the request is received. In its response the insurer shall indicate whether the insurer intends to pursue an investigation regarding the validity of the insurance contract.
(6) All medical information solicited or obtained by a licensee under this chapter is subject to:
(a) other laws of this state relating to the confidentiality of the information; and
(b) a rule relating to privacy of medical or personal information promulgated by the commissioner under Title V, Section 505 of the Gramm-Leach-Bliley Act of 1999, 15 U.S.C. Sec. 6805.
(7) A viatical settlement entered into in this state must reserve to the viator an unconditional right to terminate the viatical settlement within 15 calendar days after the viator receives the proceeds of the settlement. If the insured dies during that period, the settlement is terminated and all proceeds, premiums, loans, and loan interest that have been paid by the provider or purchaser of the viatical settlement must be repaid to the provider or purchaser of the viatical settlement.
(8) (a) Contact with an insured to determine the health status of the insured after a viatical settlement may be made only by a provider or producer of viatical settlements that is licensed in this state, or its authorized representative, and no more than:
(i) once every three months if the insured has a life expectancy of one year or more; or
(ii) once every month if the insured has a life expectancy of less than one year.
(b) The provider or producer of viatical settlements shall explain the procedure for the contacts allowed under this Subsection (8) to the viator when the application for the viatical settlement is signed by all parties.
(c) The limitations of this Subsection (8) do not apply to contacts for purposes other than determining health status.
(d) A provider or producer of viatical settlements is responsible for the acts of its authorized representative in violation of this Subsection (8).
(9) The trustee of a related provider trust must agree in writing with the provider of viatical settlements that:
(a) the provider is responsible for ensuring compliance with all statutory and regulatory requirements; and
(b) the trustee will make all records and files related to viatical settlements available to the commissioner as if those records and files were maintained directly by the provider.
(10) Regardless of the method of compensation, a producer of viatical settlements:
(a) represents only the viator; and
(b) owes a fiduciary duty to the viator to act according
to the viator's instructions and in the best interest of
the viator.
2003
31A-36-110 Payment and document requirements.
(1) A provider of viatical settlements shall instruct the viator to send the executed documents required to effect the change in ownership or assignment or change of beneficiary of the affected policy to a designated independent escrow agent. Within three business days after the date the escrow agent receives the documents, or within three business days after the provider of viatical settlements receives the documents if by mistake they are sent directly to the provider of viatical settlements, the escrow agent shall deposit the proceeds of the settlement into an escrow or trust account maintained in a regulated financial institution whose deposits are insured by a federal deposit insurer.
(2) Upon completion of the requirements of Subsection (1), the escrow agent shall deliver to the provider of viatical settlements the original documents executed by the viator. Upon the provider's receipt from the insurer of an acknowledgment of the change in ownership or assignment or change of beneficiary of the affected policy, the provider of viatical settlements shall instruct the escrow agent to pay the proceeds of the settlement to the viator.
(3) Payment to the viator must be made within three business
days after the date the provider of viatical settlements
received the acknowledgment from the insurer. Failure to
make the payment within that time makes the viatical settlement
voidable by the viator for lack of consideration until payment
is tendered to and accepted by the viator.
2003
31A-36-111 Prohibited acts.
(1) A viator may not enter into a viatical settlement within two years after the date of issuance of the policy to which the settlement relates unless the viator certifies to the provider of viatical settlements that one of the following is satisfied:
(a) the policy was issued upon the viator's exercise of conversion rights arising out of a group or individual policy, provided:
(i) the total time covered under the conversion policy plus the time covered under the prior policy is at least 24 months; and
(ii) the time covered under a group policy, calculated without regard to any change in insurance carriers, has been continuous and under the same group sponsorship;
(b) the viator is a charitable organization exempt from taxation under 26 U.S.C. Sec. 501(c)(3);
(c) the viator is not a natural person; or
(d) the viator submits to the provider of viatical settlements independent evidence that within the two-year period:
(i) the viator or insured is terminally ill;
(ii) the viator or insured is chronically ill;
(iii) the spouse of the viator has died;
(iv) the viator has divorced the viator's spouse;
(v) the viator has retired from full-time employment;
(vi) the viator has become physically or mentally disabled and a physician determines that the disability precludes the viator from maintaining full-time employment;
(vii) (A) the viator was the employer of the insured when the policy or certificate was issued; and
(B) the employment relationship has terminated;
(viii) a final judgment or order has been entered or issued by a court of competent jurisdiction, on the application of a creditor of the viator:
(A) adjudging the viator bankrupt or insolvent;
(B) approving a petition for reorganization of the viator; or
(C) appointing a receiver, trustee, or liquidator for all or a substantial part of the viator's assets;
(ix) the viator experiences a significant decrease in income that is unexpected and impairs the viator's reasonable ability to pay the policy premium;
(x) the viator disposes of the viator's ownership in a closely held corporation; or
(xi) the insured disposes of the insured's ownership in a closely held corporation.
(2) When the provider of viatical settlements submits a request to the insurer to verify coverage, the provider of viatical settlements shall submit to the insurer the following:
(a) copies of the independent evidence required under Subsection (1)(d); and
(b) documents required under Subsection 31A-36-109 (2).
(3) If a provider of viatical settlements submits to an
insurer a copy of the owner's or insured's certification
that one of the events described in Subsection (1)(d) has
occurred, the certification conclusively establishes that
the viatical settlement satisfies the requirements of this
section, and the insurer shall timely respond to the provider's
request to effect a transfer of the policy.
2003
31A-36-112 Advertising regulations.
(1) (a) Each licensee under this chapter shall establish and continuously maintain a system of control over the content, form, and method of dissemination of all advertisements of its contracts and services.
(b) Each advertisement is the responsibility of the licensee as well as the person that creates or presents it.
(c) A system of control must include at least annual notification to persons authorized by the licensee that disseminate advertisements of the requirements and procedures for approval before use of any advertisements not furnished by the licensee.
(2) An advertisement must be truthful and not misleading in fact or by implication, as determined by the commissioner from the overall impression it may reasonably be expected to create upon a person of average education or intelligence in the segment of the public to which it is directed.
(3) False or misleading statements are not remedied by:
(a) making a viatical settlement available for inspection before it is consummated; or
(b) offering to refund payment if the viator is not satisfied
within the period prescribed in Subsection
31A-36-109
(7).
2003
31A-36-113 Fraud.
(1) As used in this section, "recklessly" means engaging in conduct:
(a) where a person knows or should have known of a substantial likelihood of the existence of the relevant facts or risks; and
(b) involving a significant deviation from acceptable standards of conduct.
(2) A person may not, knowingly or with intent to defraud, to deprive another of property or for pecuniary gain, do or permit its employees or agents to engage in any of the following acts:
(a) present, cause to be presented or prepare with knowledge or belief that it will be presented, false information to or by a provider or producer of viatical settlements, a financing entity, an insurer, a provider of insurance or any other person, or to conceal information, as part of, in support of or concerning a fact material to:
(i) an application for the issuance of a policy or viatical settlement;
(ii) the underwriting of a policy or viatical settlement;
(iii) a claim for payment or other benefit under a policy or viatical settlement;
(iv) a premium paid on a policy;
(v) a payment or change of beneficiary or ownership pursuant to a policy or viatical settlement;
(vi) the reinstatement or conversion of a policy;
(vii) the solicitation, offer, effectuation, or sale of a policy or viatical settlement;
(viii) the issuance of written evidence of a policy or viatical settlement; or
(ix) a financing transaction;
(b) in furtherance of a fraud or to prevent detection of a fraud:
(i) remove, conceal, alter, destroy, or sequester from the commissioner assets or records of a licensee under this chapter or other person engaged in the business of viatical settlements;
(ii) misrepresent or conceal the financial condition of a licensee, a financing entity, an insurer, or other person;
(iii) transact the business of viatical settlements in violation of this chapter; or
(iv) file with the commissioner or analogous officer of another jurisdiction a document containing false information or otherwise conceal information about a material fact from the commissioner or analogous officer;
(c) embezzle, steal, misappropriate, or convert money, premiums, credits, or other property of a provider of viatical settlements, a viator, an insurer, an insured, an owner of a policy, or other person engaged in the business of viatical settlements or insurance;
(d) recklessly enter into, negotiate, or otherwise deal in a viatical settlement, the subject of which is a policy obtained where the viator or the viator's agent intended to defraud the policy's issuer by:
(i) presenting false information concerning any fact material to the policy; or
(ii) concealing, to mislead another, information concerning any fact material to the policy;
(e) attempt to commit, assist, aid, abet, or conspire to commit an act or omission described in this Subsection (2).
(3) A person may not knowingly or intentionally interfere with the enforcement of the provisions of this chapter or an investigation of a possible violation of this chapter.
(4) A person engaged in the business of viatical settlements may not knowingly or intentionally permit any person convicted of a felony involving dishonesty or breach of trust to participate in the business of viatical settlements.
(5) An application or contract for a viatical settlement,
however transmitted, shall contain the following or a substantially
similar statement: "A person that knowingly presents false
information in an application for insurance or a viatical
settlement is guilty of a crime and may be subject to fines
and confinement in prison." The lack of such a statement
is not a defense in a prosecution for violation of this section.
2003
31A-36-114 Reporting of fraud and immunity.
(1) A person engaged in the business of viatical settlements that knows or reasonably believes that a violation of Section 31A-36-113 is being, has been, or will be committed shall provide to the commissioner the information required by, and in a manner prescribed by, the commissioner.
(2) Any other person that knows or reasonably believes that a violation of Section 31A-36-113 is being, has been, or will be committed may furnish to the commissioner the information required by, and in a manner prescribed by, the commissioner.
(3) Except as provided in Subsection (4), a person furnishing information of the kind described in this section is immune from liability and civil action if the information is furnished to or received from:
(a) the commissioner or the commissioner's employees, agents, or representatives;
(b) federal, state, or local law enforcement or regulatory officials or their employees, agents, or representatives;
(c) another person involved in the prevention or detection of violations of Section 31A-36-113 or that person's employees, agents, or representatives;
(d) the following organizations or their employees, agents, or representatives:
(i) the National Association of Insurance Commissioners;
(ii) the National Association of Securities Dealers;
(iii) the North American Securities Administrators Association; or
(iv) another regulatory body overseeing life insurance, viatical settlements, securities, or investment fraud; or
(e) the insurer that issued the policy concerned in the information.
(4) The immunity provided in Subsection (3) does not extend to a statement made with actual malice. In an action brought against a person for filing a report or furnishing other information concerning a violation of this section, the plaintiff must plead specifically that the defendant acted with actual malice.
(5) A person identified in Subsection (3) shall be entitled to an award of attorney's fees and costs if:
(a) the person is the prevailing party in a civil cause of action for libel, slander, or any other relevant tort arising out of activities in carrying out the provisions of this chapter; and
(b) the action did not have a reasonable basis in law or fact at the time it was initiated.
(6) This section does not supplant or modify any other
privilege or immunity at common law or under another statute.
2003
31A-36-115 Confidentiality.
(1) The following shall be classified as protected records under Title 63, Chapter 2, Government Records Access and Management Act:
(a) a document or information furnished pursuant to Section 31A-36-114 ; and
(b) a document or information obtained by the commissioner in an investigation of a violation of Section 31A-36-113 .
(2) Subsection (1) does not prohibit the commissioner from disclosing documents or evidence so furnished or obtained:
(a) in an administrative or judicial proceeding to enforce laws administered by the commissioner;
(b) to federal, state, or local law enforcement or regulatory agencies;
(c) to an organization established to detect and prevent fraudulent viatical settlement acts;
(d) to the National Association of Insurance Commissioners; or
(e) to a person engaged in the business of viatical settlements that is aggrieved by the violation.
(3) Disclosure of a document or evidence under Subsection
(2) does not abrogate or modify the privilege granted in
Subsection (1).
2003
31A-36-116 Other law enforcement or regulatory authority.
This chapter does not:
(1) preempt the authority or relieve the duty of other law enforcement or regulatory agencies to investigate, examine, and prosecute suspected violations of law;
(2) prevent or prohibit a person from disclosing voluntarily information concerning viatical settlement fraud to a law enforcement or regulatory agency other than the insurance department; or
(3) limit the powers granted elsewhere by law to the commissioner
or an insurance fraud unit to investigate and examine possible
violations of law and to take appropriate action.
2003
31A-36-117 Antifraud initiatives.
(1) The following shall establish and maintain antifraud initiatives which are reasonably calculated to prevent, detect, and assist in the prosecution of violations of Section 31A-36-113 :
(a) a provider of viatical settlements; and
(b) an agency that is a producer of viatical settlements.
(2) The commissioner may order, or a licensee may request and the commissioner may approve, modifications of the measures otherwise required under this section, more or less restrictive than those measures, as necessary to protect against fraud.
(3) Antifraud initiatives shall include:
(a) fraud investigators, that may be either:
(i) employees of a provider or producer of viatical settlements; or
(ii) independent contractors;
(b) an antifraud plan submitted to the commissioner, which shall include:
(i) a description of the procedures for:
(A) detecting and investigating possible violations of Section 31A-36-113 ; and
(B) resolving material inconsistencies between medical records and applications for insurance;
(ii) a description of the procedures for reporting possible violations to the commissioner;
(iii) a description of the plan for educating and training underwriters and other personnel against fraud; and
(iv) a description or chart of the organizational arrangement of the personnel responsible for detecting and investigating possible violations of Section 31A-36-113 and for resolving material inconsistencies between medical records and applications for insurance.
(4) A plan submitted to the commissioner shall be classified
as a protected record under Title 63, Chapter 2, Government
Records Access and Management Act.
2003
31A-36-118 Criminal penalties and restitution.
(1) Persons subject to this chapter are subject to:
(a) the enforcement penalties and procedures of Section 31A-2-308 for administrative violations of this title;
(b) prosecution under Section 76-6-412 for criminal activities involving viatical settlements; or
(c) prosecution under Section 31A-31-103 for insurance fraud involving viatical settlements.
(2) A person found to be in violation of this chapter may:
(a) be ordered to pay restitution to persons aggrieved by the violation;
(b) be ordered to pay a forfeiture; or
(c) be imprisoned if found guilty of any criminal law
by a court of competent jurisdiction.
2003
31A-36-119 Authority to promulgate rules.
The commissioner may adopt rules to:
(1) establish the requirements for the annual statement required under Section 31A-36-106 ;
(2) establish standards for evaluating the reasonableness of payments under viatical settlements to persons chronically ill or terminally ill, including the regulation of the rates of discount used to determine the amount paid in exchange for an assignment, transfer, sale, devise, or bequest of a benefit under a policy;
(3) establish appropriate licensing requirements, fees, and standards for continued licensure for providers and producers of viatical settlements;
(4) require a bond or otherwise ensure financial accountability of providers and producers of viatical settlements;
(5) govern the relationship of insurers with providers and producers of viatical settlements during the viatication of a policy;
(6) determine the specific disclosures required under Section 31A-36-108 ;
(7) determine whether advertising for viatical settlements violates Section 31A-36-112 ; and
(8) determine the information to be provided to the commissioner
under Section
31A-36-114
and the manner of providing the information.
2003
