632.69(1)(g)2.2. Any of the following acts that any person does, or permits its employees or agents to do, in the furtherance of a fraud or to prevent the detection of a fraud: 632.69(1)(g)2.a.a. Removing, concealing, altering, destroying, or sequestering from the commissioner the assets or records of a licensee or other person engaged in the business of life settlements. 632.69(1)(g)2.b.b. Misrepresenting or concealing the financial condition of a licensee, financing entity, insurer, or other person. 632.69(1)(g)2.c.c. Transacting the business of life settlements in violation of laws requiring a license, certificate of authority, or other legal authority for the transaction of the business of life settlements. 632.69(1)(g)2.d.d. Filing with the commissioner or the chief insurance regulatory official of another jurisdiction a document containing false information or otherwise concealing information about a material fact from the commissioner or official. 632.69(1)(g)3.3. Embezzlement, theft, misappropriation, or conversion of monies, funds, premiums, credits, or other property of a life settlement provider, insurer, insured, owner, or any other person engaged in the business of life settlements or insurance. 632.69(1)(g)4.4. Recklessly entering into, negotiating, brokering, or otherwise dealing in a life settlement contract, the subject of which is a life insurance policy that was obtained by presenting false information concerning any fact material to the policy or by concealing for the purpose of misleading another information concerning any fact material to the policy, where the person or persons intended to defraud the policy’s issuer, the provider, or the owner. 632.69(1)(g)5.5. Attempting to commit; assisting, aiding, or abetting in the commission of; or conspiring to commit the acts or omissions specified in this paragraph. 632.69(1)(g)6.6. Misrepresenting the state of residence of an owner to be a state that does not have a law substantially similar to this section for the purpose of evading or avoiding the provisions of this section. 632.69(1)(h)(h) “Licensee” means a provider or broker that holds a license under sub. (2). 632.69(1)(i)(i) “Life expectancy” means the arithmetic mean, considering medical records and appropriate experiential data, of the number of months an insured under the policy to be settled can be expected to live. 632.69(1)(j)1.1. “Life settlement” means an agreement regarding the terms under which compensation or any thing of value will be paid, which compensation or thing of value is less than the expected death benefit of the policy but greater than the cash surrender value or accelerated death benefit available under the policy at the time of the application for the life settlement, in return for the owner’s present or future assignment, transfer, sale, devise, or bequest of the death benefit or any interest in a policy. “Life settlement” includes all of the following: 632.69(1)(j)1.a.a. The transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns a policy that insures the life of a person residing in this state, if the trust or other entity was formed or availed of for the principal purpose of acquiring one or more policies or certificates of insurance. 632.69(1)(j)1.b.b. A written agreement for a loan or other lending transaction, secured primarily by an individual or group policy. 632.69(1)(j)1.c.c. A premium finance loan made for a policy on, before, or after the date of issuance of the policy but only if the loan proceeds are not used solely to pay premiums for the policy and any costs or expenses incurred by the lender or the borrower in connection with the financing, or if the owner receives on the date of the premium finance loan a guarantee of the future life settlement value of the policy, or if the owner agrees on the date of the premium finance loan to sell the policy or any interest in its death benefit on any date following the issuance of the policy. 632.69(1)(j)2.2. “Life settlement” does not include any of the following: 632.69(1)(j)2.a.a. A policy loan by a life insurance company pursuant to the terms of the policy or accelerated death provisions contained in the policy, whether issued with the original policy or as a rider. 632.69(1)(j)2.b.b. Except as provided in subd. 1. c., a premium finance loan or any loan made by a bank or other licensed financial institution, provided that neither default on such loan nor the transfer of the policy in connection with such default is pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this section. 632.69(1)(j)2.d.d. A loan made by a lender that does not violate s. 138.12, if the loan is not described in subd. 1. c. and is not otherwise a life settlement contract. 632.69(1)(j)2.e.e. An agreement where all the parties are closely related to the insured by blood or law, or have a lawful substantial economic interest in the continued life, health, and bodily safety of the person insured, or are trusts or other entities established primarily for the benefit of such parties. 632.69(1)(j)2.f.f. Any designation, consent, or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee. 632.69(1)(j)2.g.g. A bona fide business succession planning arrangement between one or more shareholders in a corporation or between a corporation and one or more of its shareholders or one or more trusts established by or for the benefit of its shareholders; between one or more partners in a partnership or between a partnership and one or more of its partners or one or more trusts established by or for the benefit of its partners; or between one or more members in a limited liability company or between a limited liability company and one or more of its members or one or more trusts established by or for the benefit of its members. 632.69(1)(j)2.h.h. An agreement, contract, or transaction that the commissioner excludes by rule under sub. (20) (a) after determining that the agreement, contract, or transaction is not intended to be regulated by this section. 632.69(1)(k)(k) “Life settlement contract” means a written document providing for and establishing the terms of a life settlement. 632.69(1)(L)(L) “Owner” means the owner of a policy or a certificate holder under a group policy who resides in this state, unless the context requires otherwise, and enters or seeks to enter into a life settlement contract. “Owner” does not include any of the following: 632.69(1)(L)1.1. A licensee under this section, including a producer acting as a broker under this section. 632.69(1)(m)(m) “Policy” means an individual or group policy, certificate, contract, or arrangement of life insurance owned by a resident of this state, regardless of whether delivered or issued for delivery in this state. 632.69(1)(n)(n) “Premium finance loan” means a loan made primarily for the purpose of making premium payments on a policy that is secured by an interest in the policy. 632.69(1)(o)(o) “Producer” means any person licensed in this state as a resident or nonresident insurance intermediary or agent who has received qualification or authority for life insurance coverage or a life line of coverage pursuant to s. 628.04. 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.
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Chs. 600-655, Insurance
statutes/632.69(1)(L)2.
statutes/632.69(1)(L)2.
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