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b. Federal, state, or local law enforcement or regulatory officials or their
7employees, agents, or representatives.
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c. A person involved in the prevention and detection of fraud or that person's
9agents, employees, or representatives.
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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.
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e. The life insurer that issued the policy covering the life of the insured.
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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.
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(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.
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(h) This section does not do any of the following:
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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.
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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.
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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.
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(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.
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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:
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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.
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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.
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c. A description of the plan that the provider or broker will follow for antifraud
10education and training of underwriters and other personnel.
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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.
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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.
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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.
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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.
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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.
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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.
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7(20) Powers of commissioner. The commissioner may do any of the following:
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(a) Adopt rules implementing and administering this section.
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(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.
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(c) Establish appropriate licensing requirements and standards for continued
15licensure for providers and brokers.
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(d) Require a bond or other mechanism for financial accountability for
17providers and brokers.
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(e) Adopt rules governing the relationship and responsibilities of insurers,
19providers, and brokers during settlement of a policy.
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(1) This act first applies to life settlement contracts and purchase agreements
22entered into on the effective date of this subsection
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1(1) This act takes effect on the first day of the 6th month beginning after
2publication.