632.69(1)(p)
(p) “Provider" means a person, other than an owner, that enters into or effectuates a life settlement contract with an owner. “Provider" does not include:
632.69(1)(p)1.
1. A bank, savings bank, savings and loan association, credit union, or other licensed lending institution that takes an assignment of a policy solely as collateral for a loan.
632.69(1)(p)2.
2. A premium finance company making premium finance loans and exempted by the commissioner from the licensing requirement under the premium finance law under
s. 138.12 that takes an assignment of a policy solely as collateral for a loan.
632.69(1)(p)4.
4. An authorized or eligible insurer that provides stop loss coverage or financial guaranty insurance to a provider, purchaser, financing entity, special purpose entity, or related provider trust.
632.69(1)(p)5.
5. Any natural person who enters into or effectuates no more than one agreement in a calendar year for the transfer of a policy for any value less than the expected death benefit.
632.69(1)(p)9.
9. A person that the commissioner excludes by rule under
sub. (20) (a) after determining that the definition is not intended to cover the person.
632.69(1)(q)
(q) “Purchase agreement" means a contract or agreement entered into by a purchaser, to which the owner is not a party, to purchase a settled policy or an interest in a settled policy for the purpose of deriving an economic benefit.
632.69(1)(r)
(r) “Purchaser" means a person who provides a sum of money as consideration for a policy or an interest in the death benefits of a policy, or a person who owns or acquires or is entitled to a beneficial interest in a trust that owns a life settlement contract or is the beneficiary of a policy that has been or will be the subject of a life settlement contract, for the purpose of deriving an economic benefit. “Purchaser" does not include any of the following:
632.69(1)(s)
(s) “Recklessly" means in conscious and clearly unjustifiable disregard of a substantial likelihood of the existence of the relevant facts or risks, the disregard involving a gross deviation from acceptable standards of conduct.
632.69(1)(t)
(t) “Related provider trust" means a trust that is established by a licensed provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction and that has a written agreement with the licensed provider under which the licensed provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files relating to life settlement transactions available to the commissioner as if those records were maintained directly by the licensed provider.
632.69(1)(u)
(u) “Settled" means, with respect to a policy, acquired by a provider under a life settlement contract.
632.69(1)(v)
(v) “Special purpose entity" means a corporation, partnership, trust, limited liability company, or other similar entity formed solely to provide either direct or indirect access to institutional capital markets either for a financing entity or provider or in connection with a transaction in which the securities in the special purpose entity are either acquired by the owner or by a qualified institutional buyer, as defined in
17 CFR 230.114A (a) (1) or pay a fixed rate of return commensurate with established asset-backed institutional capital markets.
632.69(1)(w)
(w) “Stranger-originated life insurance" or “STOLI" means an act, practice, plan, or arrangement, individually or in concert with others, to initiate a life insurance policy for the benefit of a 3rd-party investor who, at the time of policy origination, has no insurable interest in the insured. STOLI includes cases in which life insurance is purchased with resources or guarantees from or through a person or entity who, at the time of policy inception, could not lawfully initiate the policy by the person or entity, and in which, at the time of inception, there is an arrangement or agreement, whether verbal or written, to directly or indirectly transfer the ownership of the policy or the policy benefits to a 3rd party. Trusts that are created to give the appearance of insurable interest, and are used to initiate policies for investors, violate insurable interest laws under
s. 631.07 and the common law prohibition against wagering on life. STOLI does not include a loan, agreement, assignment, arrangement, or transaction set forth in
sub. (1) (j) 2.
632.69(1)(x)
(x) “Terminally ill" means having an illness or sickness that can reasonably be expected to result in death in 24 months or less.
632.69(2)(a)1.1. No person may act as a provider or broker for an owner, without holding a license from the commissioner.
632.69(2)(a)2.
2. A licensed attorney or a certified public accountant who is retained to represent the owner and 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.
632.69(2)(b)
(b) An applicant shall make an application for a license to the commissioner on a form prescribed by the commissioner. For a broker's license, the applicant shall submit the fee specified in
s. 601.31 (1) (mr), subject to
s. 601.31 (2m). For a provider's license, the applicant shall submit the fee specified in
s. 601.31 (1) (mm), subject to
s. 601.31 (2m).
632.69(2)(c)
(c) The commissioner may not issue a license under this subsection unless the applicant provides his or her social security number or its federal employer identification number or, if the applicant does not have a social security number, a statement made or subscribed under oath or affirmation that the applicant does not have a social security number. An applicant who is providing a statement that he or she does not have a social security number, shall provide that statement along with the application for a license on a form prescribed by the department of children and families. A licensee shall provide to the commissioner the licensee's social security number, statement the licensee does not have the social security number, or federal employment identification number of the licensee at the time that the annual license renewal fee is paid, if not previously provided. The commissioner shall disclose a social security number obtained from an applicant or licensee to the department of children and families in the administration of
s. 49.22, as provided in a memorandum of understanding entered into under
s. 49.857. The commissioner may disclose the social security number or federal employment identification number of an applicant or licensee to the department of revenue for the purpose of requesting certifications under
s. 73.0301 and to the department of workforce development for the purpose of requesting certifications under
s. 108.227.
632.69(2)(d)1.1. The commissioner shall refuse to issue or renew a license under this subsection if the person is delinquent in court-ordered payments of child or family support, maintenance, birth expenses, medical expenses, or other expenses related to the support of a child or former spouse, or if the person fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under
s. 59.53 (5) and related to paternity or child support proceedings, as provided in a memorandum of understanding entered into under
s. 49.857.
632.69(2)(d)2.
2. The commissioner shall refuse to issue or renew a license under this subsection if the department of revenue certifies under
s. 73.0301 that the applicant for the license or renewal of the license is liable for delinquent taxes or if the department of workforce development certifies under
s. 108.227 that the applicant for the license or renewal of the license is liable for delinquent unemployment insurance contributions.
632.69(2)(e)
(e) The applicant shall provide information that the commissioner may require on forms prepared by the commissioner. The commissioner may require the applicant, at any time, to fully disclose the identity of its partners, officers, employees, and stockholders, except stockholders owning fewer than 10 percent of the shares of an applicant whose shares are publicly traded. The commissioner may refuse to issue a license if not satisfied that any officer, employee, stockholder, or partner who may materially influence the applicant's conduct meets the standards of this section.
632.69(2)(f)
(f) A license issued to a partnership, corporation, or other entity authorizes all members, officers, and designated employees to act as a licensee under the license, if those persons are named in the application or any supplements to the application.
632.69(2)(g)
(g) Upon the filing of an application and the payment of the license fee, the commissioner shall make an investigation of each applicant and shall issue a license if the commissioner finds that the applicant satisfies all of the following:
632.69(2)(g)1.
1. If applying for a provider license, has provided a detailed plan of operation.
632.69(2)(g)2.
2. Is competent and trustworthy and intends to transact its business in good faith.
632.69(2)(g)3.
3. Has a good business reputation and has either the experience, training, or education so as to be qualified in the business for which the license is applicable.
632.69(2)(g)4.a.a. If applying for a provider license, has demonstrated evidence of financial responsibility in a format prescribed by the commissioner through either a surety bond executed and issued by an insurer authorized to issue surety bonds in this state or a deposit of cash, certificates of deposit, or securities or any combination of those in the amount of $250,000. Any surety bond issued under this
subd. 4. a. shall be in the favor of this state and shall specifically authorize recovery by the commissioner on behalf of any person in this state who sustains damages as the result of erroneous acts, failure to act, conviction of fraud, or conviction of unfair practices by the provider. The commissioner shall accept as evidence of financial responsibility proof that financial instruments in accordance with the requirements in this
subd. 4. a. have been filed in one state where the applicant is licensed as a provider.
632.69(2)(g)4.b.
b. If applying for a broker license, has provided proof of the acquisition of a policy of professional liability insurance in an amount that is satisfactory to the commissioner.
632.69(2)(g)5.
5. If the applicant is a legal entity, is formed or organized under 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.
632.69(2)(g)6.
6. Has provided to the commissioner an antifraud plan that meets the requirements of
sub. (15) (i).
632.69(2)(h)
(h) The commissioner may request evidence of financial responsibility under
par. (g) 4. from an applicant at any time the commissioner deems necessary.
632.69(2)(i)
(i) 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 irrevocable consent that any action against the applicant may be commenced against the applicant by service of process on the commissioner in accordance with the procedures set forth in
ss. 601.72 and
601.73.
632.69(2)(j)
(j) Licenses may be renewed annually on July 1 upon payment of the fee specified in
s. 601.31 (1) (ms) by a broker, or the fee specified in
s. 601.31 (1) (mp) by a provider. Failure to pay the fee by the renewal date shall result in the automatic revocation of the license.
632.69(2)(k)
(k) Each licensee shall file with the commissioner on or before the first day of March of each year an annual statement containing the information required under
sub. (6) (a) and any information the commissioner requires by rule.
632.69(2)(L)
(L) A provider may not use any person to perform the functions of a broker unless the person holds a current, valid license as a broker.
632.69(2)(m)
(m) A broker may not use any person to perform the functions of a provider unless the person holds a current, valid license as a provider.
632.69(2)(n)
(n) A provider or broker shall provide to the commissioner new or revised information about officers, partners, directors, members, designated employees, or stockholders, except stockholders owning fewer than 10 percent of the shares of a provider or broker whose shares are publicly traded, within 30 days of the change.
632.69(2)(o)
(o) The insurer that issued the policy that is the subject of a life settlement contract may not be held responsible for any act or omission of a broker or provider arising out of or in connection with the life settlement, unless the insurer receives compensation for the placement of a life settlement contract from the broker or provider or from a purchaser in connection with the life settlement contract.
632.69(3)(a)(a) An individual applicant for a license under
sub. (2) or a licensee who engages in the business of life settlements in this state shall receive training to ensure all of the following:
632.69(3)(a)1.
1. The individual understands the relation of life settlement transactions to the integrity of a comprehensive financial plan of an owner.
632.69(3)(a)2.
2. The individual has adequate knowledge to competently discuss the material aspects of life settlements with an owner.
632.69(3)(a)3.
3. The individual complies with the laws of this state relating to life settlements.
632.69(3)(b)
(b) Training required under this subsection must be approved by the commissioner and provided by an education provider that is approved by the commissioner. The commissioner may approve the training required under this subsection for continuing education under
s. 628.04 (3). Training required under this subsection shall not increase the credit hours of continuing education required by statute or rule. Certification and reporting of completion of the required training shall comply with the requirements of
s. Ins 28.07, Wis. Adm. Code. Any person failing to meet the requirements of this subsection shall be subject to the penalties imposed by the commissioner.
632.69(3)(c)
(c) The satisfaction of the training requirements of another state that are substantially similar to the requirements set forth in this subsection, and are approved by the commissioner, satisfy the requirements of this subsection.
632.69(3)(d)
(d) Training provided under this subsection shall include all of the following topics, at a minimum:
632.69(3)(d)2.
2. Legal relationships among the parties to a life settlement.
632.69(3)(d)4.
4. Ethical considerations in selling, soliciting, and negotiating life settlements.
632.69(3)(d)9.
9. Additional matters as determined by the commissioner.
632.69(3)(e)
(e) An individual applicant for a license under
sub. (2) shall complete an initial training course of not less than 8 hours. An electronic confirmation of completion of initial training shall accompany the application for initial licensure. A licensee shall complete training of not less than 4 hours every 24 months after the initial training course. A person who holds a license under s.
632.68, 2007 stats., on November 1, 2010, shall complete initial training within 6 months after November 1, 2010.
632.69(4)
(4) License suspension, revocation, or refusal to renew. 632.69(4)(a)(a) The commissioner may suspend, revoke, or refuse to renew the license of any licensee if, after a hearing, the commissioner finds any of the following:
632.69(4)(a)1.
1. Any material misrepresentation in the application for the license.
632.69(4)(a)2.
2. That the licensee or any officer, partner, member, or director of the licensee is guilty of fraudulent or dishonest practices, is subject to a final administrative action, or is otherwise shown to be untrustworthy or incompetent to act as a licensee.
632.69(4)(a)3.
3. If the licensee is a provider, that the licensee demonstrates a pattern of unreasonably withholding payments to owners.
632.69(4)(a)4.
4. That the licensee no longer meets the requirements for licensure.
632.69(4)(a)5.
5. That the licensee or any officer, partner, member, or director of the licensee has been convicted of a felony or of any misdemeanor of which criminal fraud is an element or has pleaded other than not guilty with respect to any felony or any misdemeanor of which criminal fraud or moral turpitude is an element, regardless whether a judgment of conviction has been entered by the court.
632.69(4)(a)6.
6. If the licensee is a provider, that the licensee has entered into any life settlement contract the form of which has not been approved by the commissioner under this section.
632.69(4)(a)7.
7. If the licensee is a provider, that the licensee has failed to honor obligations set out in a life settlement contract.
632.69(4)(a)8.
8. If the licensee is a provider, that the licensee has assigned, transferred, or pledged a settled policy to a person other than a provider licensed in this state, a purchaser, an accredited investor as defined in
17 CFR 230.501 (a) or a qualified institutional buyer as defined in
17 CFR 230.144A (a) (1), a financing entity, a special purpose entity, or a related provider trust.
632.69(4)(a)9.
9. That the licensee or any officer, partner, member, or key management personnel has violated any of the provisions of this section.
632.69(4)(b)
(b) Nothing in this subsection limits the authority of the commissioner to summarily suspend a license under
s. 227.51 (3).
632.69(4)(c)
(c) The commissioner shall suspend a license if the licensee is delinquent in court-ordered payments of child or family support, maintenance, birth expenses, medical expenses, or other expenses related to the support of a child or former spouse or if the licensee fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under
s. 59.53 (5) that is related to paternity or child support proceedings, as provided in a memorandum of understanding entered into under
s. 49.857.
632.69(4)(d)
(d) The commissioner shall revoke the license of a licensee if the department of revenue certifies under
s. 73.0301 that the licensee is liable for delinquent taxes or if the department of workforce development certifies under
s. 108.227 that the licensee is liable for delinquent unemployment insurance contributions.
632.69(5)(a)(a) No person may use a life settlement contract form or provide to an owner a disclosure statement form in this state unless first filed with and approved by the commissioner. The form is approved if the commissioner does not disapprove of the form within 30 days after filing or within a 30-day extension of that period ordered by the commissioner before the expiration of the first 30 days. To disapprove a form, the commissioner shall state in writing the reasons for disapproval sufficiently explicitly that the licensee is provided reasonable guidance in reformulating its forms. The commissioner shall disapprove a life settlement contract form or disclosure statement form if the commissioner determines the form or provisions contained in the form fail to meet the requirements of this section, are unreasonable, are contrary to the interests of the public, or are otherwise misleading or unfair to the owner.
632.69(5)(b)
(b) No insurer may, as a condition of responding to a request for verification of coverage or in connection with the transfer of a policy under a life settlement contract, require that the owner, insured, provider, or broker sign any form, disclosure, consent, waiver, or acknowledgment that has not been expressly approved by the commissioner for use in connection with life settlement contracts in this state.
632.69(6)
(6) Reporting requirements and privacy.
