AB758,48,1211
4. State or imply that interest charged on an accelerated death benefit or loan
12is unfair, inequitable, or, in any manner, an incorrect or improper practice.
AB758,48,1613
5. Use the words "free," "no cost," "without cost," "no additional cost," "at no
14extra cost," or similar words or phrases with respect to any benefit or services, unless
15true. An advertisement may specify the charge for a benefit or service or may state
16that a charge is included in the payment or use other appropriate language.
AB758,49,217
6. Use testimonials, appraisals, analyses, or endorsements in advertisements
18unless they are genuine; represent the current opinion of the author; are applicable
19to the life settlement contract or purchase agreement, product, or service advertised;
20and are reproduced with sufficient completeness to avoid misleading or deceiving
21prospective owners or purchasers as to the nature or scope of the testimonial,
22appraisal, analysis, or endorsement. Any financial interest in or benefit received
23from the licensee by the person making a testimonial, appraisal, or analysis, directly
24or indirectly, shall be prominently disclosed in the advertisement. If an endorsement
25refers to benefits received under a life settlement contract or purchase agreement,
1the licensee shall retain all pertinent information forming a basis of the endorsement
2for a period of 5 years following its use.
AB758,49,93
7. State or imply that a life settlement contract or purchase agreement, benefit,
4or service has been approved or endorsed by a group, society, association, or other
5organization unless that is the fact and unless any relationship between the
6organization and the licensee is disclosed. If the entity making the endorsement is
7owned, controlled, or managed by the licensee, or receives any payment or other
8consideration from the licensee for making an endorsement or testimonial, that fact
9must be disclosed in the advertisement.
AB758,49,1210
8. Contain statistical information unless the information accurately reflects
11recent and relevant facts. An advertisement shall identify the source of all statistics
12used in the advertisement.
AB758,49,1413
9. Disparage insurers, providers, brokers, producers, policies, services, or
14methods of marketing.
AB758,49,2215
10. Omit the name of the actual licensee from any advertisement. No
16advertisement may use a trade name, group designation, name of the parent
17company of a licensee, name of a division of a life settlement licensee, service mark,
18slogan, symbol, or other device or reference if the advertisement would have the
19capacity or tendency to mislead or deceive as to the true identity of the licensee or
20to create the impression that any entity other than the licensee would have any
21responsibility for the financial obligation under a life settlement contract or
22purchase agreement.
AB758,50,323
11. Use any combination of words, symbols, or physical materials that by the
24their content, phraseology, shape, color, or other characteristics are so similar to a
25combination of words, symbols, or physical materials used by a government program
1or agency that they tend to mislead or deceive prospective owners or purchasers into
2believing the advertisement is in some manner connected with a government
3program or agency.
AB758,50,84
12. Exaggerate the fact that a licensee under this section is licensed in the state
5where the advertisement appears or suggest or imply that competing licensees may
6not be so licensed. An advertisement may ask the audience to consult the licensee's
7Web site or contact the office of the commissioner for licensing requirements and the
8status of a license.
AB758,50,129
13. Create the impression, directly or indirectly, that a licensee; its business
10practices or methods of operation; the merits desirability or advisability of any life
11settlement contract or purchase agreement; or any life insurance company are
12recommended, approved, or endorsed by any government entity.
AB758,50,1613
14. Emphasize the speed with which the settlement will occur, except that the
14advertisement may disclose the average time from the completion of the application
15to the date of offer and from the acceptance of the offer to receipt of the settlement
16funds by the owner.
AB758,50,1917
15. Emphasize the dollar amounts available to an owner, except that the
18advertisement may disclose the average purchase price as a percent of the face value
19obtained by owners contracting with the licensee during the prior 6 months.
AB758,50,2520
(h) The name of the licensee shall be clearly identified in all advertisements
21about the licensee or its life settlement contracts, purchase agreements, products, or
22services. If any specific life settlement contract or purchase agreement of a licensee
23is advertised, the contract or agreement shall be identified either by form number
24or other appropriate description. If an application is part of the advertisement, the
25name of the provider shall be shown on the application.
AB758,51,1
1(15) Fraud prevention and control; fraudulent life settlement acts.
AB758,51,22
(a) No person may commit a fraudulent life settlement act.
AB758,51,53
(b) No person may knowingly or intentionally interfere with the enforcement
4of this subsection or sub. (13) or investigations of suspected or actual violations of this
5subsection or sub. (13).
AB758,51,86
(c) No person in the business of life settlements may knowingly or intentionally
7permit any person convicted of a felony involving dishonesty or breach of trust to
8participate in the business of life settlements.
AB758,51,139
(d) 1. Life settlement contracts, purchase agreements, and applications for life
10settlements, regardless of the form of transmission, shall contain the following
11statement or a substantially similar statement: "Any person who knowingly
12presents false information in an application for insurance, a life settlement, or a
13purchase agreement may be subject to civil and criminal penalties."
AB758,51,1514
2. A person may not use the lack of the statement required under subd. 1. as
15a defense to any prosecution for a violation of this subsection or sub. (13).
AB758,51,1916
(e) 1. Any person engaged in the business of life settlements having knowledge
17or a reasonable belief that a violation of this subsection or sub. (13) is being, will be,
18or has been committed shall provide to the commissioner the information required
19by, and in a manner prescribed by, the commissioner.
AB758,51,2320
2. Any other person having knowledge or a reasonable belief that a violation
21of this subsection or sub. (13) is being, will be, or has been committed may provide
22to the commissioner the information required by, and in a manner prescribed by, the
23commissioner.
AB758,52,324
(f) 1. In the absence of actual malice, no civil liability shall be imposed on and
25no cause of action shall arise from a person's furnishing information concerning
1suspected, anticipated, or completed violations of this subsection or sub. (13) or
2suspected, anticipated, or completed fraudulent insurance acts, if the information is
3provided to or received from any of the following:
AB758,52,54
a. The commissioner or the commissioner's employees, agents, or
5representatives.
AB758,52,76
b. Federal, state, or local law enforcement or regulatory officials or their
7employees, agents, or representatives.
AB758,52,98
c. A person involved in the prevention and detection of fraud or that person's
9agents, employees, or representatives.
AB758,52,1310
d. The National Association of Insurance Commissioners, the Financial
11Industry Regulatory Authority, the North American Securities Administrators
12Association, or their employees, agents, or representatives or other regulatory body
13overseeing life insurance, life settlements, securities, or investment fraud.
AB758,52,1414
e. The life insurer that issued the policy covering the life of the insured.
AB758,52,1815
2. This paragraph does not abrogate or modify common law or statutory
16privileges or immunities enjoyed by a person who supplies information concerning
17suspected, anticipated, or completed fraudulent acts related to life settlements or
18insurance.
AB758,53,819
(g) Information, documents, and evidence provided under par. (e) or obtained
20by the commissioner in an investigation of suspected or actual violations of this
21subsection or sub. (13) shall be privileged and confidential, shall not be a public
22record, and shall not be subject to discovery or subpoena in a civil or criminal action.
23The commissioner may release information, documents, and evidence provided
24under par. (e) or obtained in an investigation of suspected or actual violations of this
25subsection or sub. (13) in administrative or judicial proceedings to enforce laws
1administered by the commissioner, to federal, state, or local law enforcement or
2regulatory agencies, to an organization established for the purpose of detecting and
3preventing fraud related to life settlements, to the National Association of Insurance
4Commissioners, or, at the discretion of the commissioner, to a person in the business
5of life settlements that is aggrieved by a violation of this subsection or sub. (13).
6Release by the commissioner of information, documents, and evidence as set forth in
7this paragraph does not abrogate, modify, or waive the privilege established in this
8paragraph.
AB758,53,99
(h) This section does not do any of the following:
AB758,53,1210
1. Preempt the authority or relieve the duty of law enforcement or regulatory
11agencies other than the commissioner to investigate, examine, and prosecute
12suspected violations of law.
AB758,53,1513
2. Prevent or prohibit a person from disclosing voluntarily information
14concerning life settlement fraud to a law enforcement or regulatory agency other
15than the commissioner.
AB758,53,1816
3. Limit the powers granted elsewhere by the laws of this state to the
17commissioner to investigate and examine possible violations of law and to take
18appropriate action.
AB758,53,2319
(i) 1. Providers and brokers shall have in place antifraud initiatives reasonably
20calculated to detect, prosecute, and prevent violations of this subsection and sub.
21(13). The commissioner may modify the antifraud initiatives from time to time as
22necessary to ensure an effective antifraud program and to accomplish the purpose
23of this paragraph.
AB758,54,224
2. Antifraud initiatives shall include having fraud investigators, who may be
25employees of the provider or broker or who may be independent contractors, and an
1antifraud plan, which the provider or broker shall submit to the commissioner and
2which shall include all of the following:
AB758,54,63
a. A description of the procedures that the provider or broker will use for
4detecting and investigating possible fraud and violations of this subsection and sub.
5(13) and for resolving material inconsistencies between medical records and
6insurance applications.
AB758,54,87
b. A description of the procedures that the provider or broker will use for
8reporting possible violations of this subsection and sub. (13) to the commissioner.
AB758,54,109
c. A description of the plan that the provider or broker will follow for antifraud
10education and training of underwriters and other personnel.
AB758,54,1411
d. A description or chart outlining the organizational arrangement of the
12antifraud personnel who are responsible for investigating and reporting possible
13violations of this subsection and sub. (13) and investigating unresolved material
14inconsistencies between medical records and insurance applications.
AB758,54,1715
3. Antifraud plans submitted to the commissioner are privileged and
16confidential, are not a public record, and are not subject to discovery or subpoena in
17a civil or criminal action.
AB758,54,22
18(16) Conflicts of law. If there is more than one owner on a single policy and
19the owners are residents of different states, a life settlement shall be governed by the
20law of the state in which the owner having the largest percentage ownership resides
21or, if the owners hold equal ownership, the state of residence of one owner agreed
22upon in writing by all owners.
AB758,54,25
23(17) Fraternal benefit societies. Nothing in this section shall prohibit a
24fraternal benefit society under ch. 614 from enforcing the terms of its bylaws or rules
25regarding permitted beneficiaries and owners.
AB758,55,3
1(18) Civil action. Any person damaged by a violation of this section may bring
2a civil action against the person committing the violation in a court of competent
3jurisdiction.
AB758,55,6
4(19) Penalties. Any person who violates this section is subject to the penalties
5provided under s. 601.64, suspension or revocation of a license or certificate of
6authority, and an order under s. 601.41.
AB758,55,7
7(20) Powers of commissioner. The commissioner may do any of the following:
AB758,55,88
(a) Adopt rules implementing and administering this section.
AB758,55,139
(b) Establish standards for evaluating the reasonableness of payments under
10life settlement contracts for persons who are terminally or chronically ill, including
11regulation of discount rates used to determine the amount paid in exchange for
12assignment, transfer, sale, devise, or bequest of a benefit under a policy insuring the
13life of a person who is terminally or chronically ill.
AB758,55,1514
(c) Establish appropriate licensing requirements and standards for continued
15licensure for providers and brokers.
AB758,55,1716
(d) Require a bond or other mechanism for financial accountability for
17providers and brokers.
AB758,55,1918
(e) Adopt rules governing the relationship and responsibilities of insurers,
19providers, and brokers during settlement of a policy.
AB758,55,2221
(1) This act first applies to life settlement contracts and purchase agreements
22entered into on the effective date of this subsection
AB758,56,2
1(1) This act takes effect on the first day of the 6th month beginning after
2publication.