SB513: Bill Text

SB513,49,2 6. Use testimonials, appraisals, analyses, or endorsements in advertisements unless they are genuine; represent the current opinion of the author; are applicable to the life settlement contract or purchase agreement, product, or service advertised; and are reproduced with sufficient completeness to avoid misleading or deceiving prospective owners or purchasers as to the nature or scope of the testimonial, appraisal, analysis, or endorsement. Any financial interest in or benefit received from the licensee by the person making a testimonial, appraisal, or analysis, directly or indirectly, shall be prominently disclosed in the advertisement. If an endorsement refers to benefits received under a life settlement contract or purchase agreement, the licensee shall retain all pertinent information forming a basis of the endorsement for a period of 5 years following its use.

SB513,49,9 7. State or imply that a life settlement contract or purchase agreement, benefit, or service has been approved or endorsed by a group, society, association, or other organization unless that is the fact and unless any relationship between the organization and the licensee is disclosed. If the entity making the endorsement is owned, controlled, or managed by the licensee, or receives any payment or other consideration from the licensee for making an endorsement or testimonial, that fact must be disclosed in the advertisement.

SB513,49,12 8. Contain statistical information unless the information accurately reflects recent and relevant facts. An advertisement shall identify the source of all statistics used in the advertisement.

SB513,49,14 9. Disparage insurers, providers, brokers, producers, policies, services, or methods of marketing.

SB513,49,22 10. Omit the name of the actual licensee from any advertisement. No advertisement may use a trade name, group designation, name of the parent company of a licensee, name of a division of a life settlement licensee, service mark, slogan, symbol, or other device or reference if the advertisement would have the capacity or tendency to mislead or deceive as to the true identity of the licensee or to create the impression that any entity other than the licensee would have any responsibility for the financial obligation under a life settlement contract or purchase agreement.

SB513,50,3 11. Use any combination of words, symbols, or physical materials that by the their content, phraseology, shape, color, or other characteristics are so similar to a combination of words, symbols, or physical materials used by a government program or agency that they tend to mislead or deceive prospective owners or purchasers into believing the advertisement is in some manner connected with a government program or agency.

SB513,50,8 12. Exaggerate the fact that a licensee under this section is licensed in the state where the advertisement appears or suggest or imply that competing licensees may not be so licensed. An advertisement may ask the audience to consult the licensee's Web site or contact the office of the commissioner for licensing requirements and the status of a license.

SB513,50,12 13. Create the impression, directly or indirectly, that a licensee; its business practices or methods of operation; the merits desirability or advisability of any life settlement contract or purchase agreement; or any life insurance company are recommended, approved, or endorsed by any government entity.

SB513,50,16 14. Emphasize the speed with which the settlement will occur, except that the advertisement may disclose the average time from the completion of the application to the date of offer and from the acceptance of the offer to receipt of the settlement funds by the owner.

SB513,50,19 15. Emphasize the dollar amounts available to an owner, except that the advertisement may disclose the average purchase price as a percent of the face value obtained by owners contracting with the licensee during the prior 6 months.

SB513,50,25 (h) The name of the licensee shall be clearly identified in all advertisements about the licensee or its life settlement contracts, purchase agreements, products, or services. If any specific life settlement contract or purchase agreement of a licensee is advertised, the contract or agreement shall be identified either by form number or other appropriate description. If an application is part of the advertisement, the name of the provider shall be shown on the application.

SB513,51,1 (15) Fraud prevention and control; fraudulent life settlement acts.

SB513,51,2 (a) No person may commit a fraudulent life settlement act.

SB513,51,5 (b) No person may knowingly or intentionally interfere with the enforcement of this subsection or sub. (13) or investigations of suspected or actual violations of this subsection or sub. (13).

SB513,51,8 (c) No person in the business of life settlements may knowingly or intentionally permit any person convicted of a felony involving dishonesty or breach of trust to participate in the business of life settlements.

SB513,51,13 (d) 1. Life settlement contracts, purchase agreements, and applications for life settlements, regardless of the form of transmission, shall contain the following statement or a substantially similar statement: "Any person who knowingly presents false information in an application for insurance, a life settlement, or a purchase agreement may be subject to civil and criminal penalties."

SB513,51,15 2. A person may not use the lack of the statement required under subd. 1. as a defense to any prosecution for a violation of this subsection or sub. (13).

SB513,51,19 (e) 1. Any person engaged in the business of life settlements having knowledge or a reasonable belief that a violation of this subsection or sub. (13) is being, will be, or has been committed shall provide to the commissioner the information required by, and in a manner prescribed by, the commissioner.

SB513,51,23 2. Any other person having knowledge or a reasonable belief that a violation of this subsection or sub. (13) is being, will be, or has been committed may provide to the commissioner the information required by, and in a manner prescribed by, the commissioner.

SB513,52,3 (f) 1. In the absence of actual malice, no civil liability shall be imposed on and no cause of action shall arise from a person's furnishing information concerning suspected, anticipated, or completed violations of this subsection or sub. (13) or suspected, anticipated, or completed fraudulent insurance acts, if the information is provided to or received from any of the following:

SB513,52,5 a. The commissioner or the commissioner's employees, agents, or representatives.

SB513,52,7 b. Federal, state, or local law enforcement or regulatory officials or their employees, agents, or representatives.

SB513,52,9 c. A person involved in the prevention and detection of fraud or that person's agents, employees, or representatives.

SB513,52,13 d. The National Association of Insurance Commissioners, the Financial Industry Regulatory Authority, the North American Securities Administrators Association, or their employees, agents, or representatives or other regulatory body overseeing life insurance, life settlements, securities, or investment fraud.

SB513,52,14 e. The life insurer that issued the policy covering the life of the insured.

SB513,52,18 2. This paragraph does not abrogate or modify common law or statutory privileges or immunities enjoyed by a person who supplies information concerning suspected, anticipated, or completed fraudulent acts related to life settlements or insurance.

SB513,53,8 (g) Information, documents, and evidence provided under par. (e) or obtained by the commissioner in an investigation of suspected or actual violations of this subsection or sub. (13) shall be privileged and confidential, shall not be a public record, and shall not be subject to discovery or subpoena in a civil or criminal action. The commissioner may release information, documents, and evidence provided under par. (e) or obtained in an investigation of suspected or actual violations of this subsection or sub. (13) in administrative or judicial proceedings to enforce laws administered by the commissioner, to federal, state, or local law enforcement or regulatory agencies, to an organization established for the purpose of detecting and preventing fraud related to life settlements, to the National Association of Insurance Commissioners, or, at the discretion of the commissioner, to a person in the business of life settlements that is aggrieved by a violation of this subsection or sub. (13). Release by the commissioner of information, documents, and evidence as set forth in this paragraph does not abrogate, modify, or waive the privilege established in this paragraph.

SB513,53,9 (h) This section does not do any of the following:

SB513,53,12 1. Preempt the authority or relieve the duty of law enforcement or regulatory agencies other than the commissioner to investigate, examine, and prosecute suspected violations of law.

SB513,53,15 2. Prevent or prohibit a person from disclosing voluntarily information concerning life settlement fraud to a law enforcement or regulatory agency other than the commissioner.

SB513,53,18 3. Limit the powers granted elsewhere by the laws of this state to the commissioner to investigate and examine possible violations of law and to take appropriate action.

SB513,53,23 (i) 1. Providers and brokers shall have in place antifraud initiatives reasonably calculated to detect, prosecute, and prevent violations of this subsection and sub. (13). The commissioner may modify the antifraud initiatives from time to time as necessary to ensure an effective antifraud program and to accomplish the purpose of this paragraph.

SB513,54,2 2. Antifraud initiatives shall include having fraud investigators, who may be employees of the provider or broker or who may be independent contractors, and an antifraud plan, which the provider or broker shall submit to the commissioner and which shall include all of the following:

SB513,54,6 a. A description of the procedures that the provider or broker will use for detecting and investigating possible fraud and violations of this subsection and sub. (13) and for resolving material inconsistencies between medical records and insurance applications.

SB513,54,8 b. A description of the procedures that the provider or broker will use for reporting possible violations of this subsection and sub. (13) to the commissioner.

SB513,54,10 c. A description of the plan that the provider or broker will follow for antifraud education and training of underwriters and other personnel.

SB513,54,14 d. A description or chart outlining the organizational arrangement of the antifraud personnel who are responsible for investigating and reporting possible violations of this subsection and sub. (13) and investigating unresolved material inconsistencies between medical records and insurance applications.

SB513,54,17 3. Antifraud plans submitted to the commissioner are privileged and confidential, are not a public record, and are not subject to discovery or subpoena in a civil or criminal action.

SB513,54,22 (16) Conflicts of law. If there is more than one owner on a single policy and the owners are residents of different states, a life settlement 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.

SB513,54,25 (17) Fraternal benefit societies. Nothing in this section shall prohibit a fraternal benefit society under ch. 614 from enforcing the terms of its bylaws or rules regarding permitted beneficiaries and owners.

SB513,55,3 (18) Civil action. Any person damaged by a violation of this section may bring a civil action against the person committing the violation in a court of competent jurisdiction.

SB513,55,6 (19) Penalties. Any person who violates this section is subject to the penalties provided under s. 601.64, suspension or revocation of a license or certificate of authority, and an order under s. 601.41.

SB513,55,7 (20) Powers of commissioner. The commissioner may do any of the following:

SB513,55,8 (a) Adopt rules implementing and administering this section.

SB513,55,13 (b) Establish standards for evaluating the reasonableness of payments under life settlement contracts for persons who are terminally or chronically ill, including regulation of discount rates used to determine the amount paid in exchange for assignment, transfer, sale, devise, or bequest of a benefit under a policy insuring the life of a person who is terminally or chronically ill.

SB513,55,15 (c) Establish appropriate licensing requirements and standards for continued licensure for providers and brokers.

SB513,55,17 (d) Require a bond or other mechanism for financial accountability for providers and brokers.

SB513,55,19 (e) Adopt rules governing the relationship and responsibilities of insurers, providers, and brokers during settlement of a policy.

SB513, s. 17 Section 17. Initial applicability.

SB513,55,22 (1) This act first applies to life settlement contracts and purchase agreements entered into on the effective date of this subsection

SB513, s. 18 Section 18. Effective date.

SB513,56,2 (1) This act takes effect on the first day of the 6th month beginning after publication.

SB513,56,3 (End)