1.1 	A bill for an act
1.2 	relating to insurance; regulating life settlements; providing enforcement; 
1.3 	prescribing criminal penalties and civil remedies;proposing coding for new law 
1.4 	in Minnesota Statutes, chapter 60A; repealing Minnesota Statutes 2006, sections 
1.5 	60A.961; 60A.962; 60A.963; 60A.964; 60A.965; 60A.966; 60A.967; 60A.968; 
1.6 	60A.969; 60A.970; 60A.971; 60A.972; 60A.973; 60A.974.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. [60A.957] SHORT TITLE.
1.9 	Sections 60A.957 to 60A.9587 may be cited as the "Life Settlements Act."

1.10 	Sec. 2. [60A.9572] DEFINITIONS.
1.11 		Subdivision 1.Terms. For the purpose of sections 60A.957 to 60A.9587, the terms 
1.12 	in subdivision 2 to 27 have the meanings given them.
1.13 		Subd. 2.Advertisement. "Advertisement" means any written, electronic, or printed 
1.14 	communication or any communication by means of recorded telephone messages or 
1.15 	transmitted on radio, television, the Internet, or similar communications media, including 
1.16 	film strips, motion pictures, and videos published, disseminated, circulated, or placed 
1.17 	before the public, directly or indirectly, for the purpose of creating an interest in or 
1.18 	inducing a person to purchase or sell, assign, devise, bequest, or transfer the death benefit 
1.19 	or ownership of a life insurance policy or an interest in a life insurance policy pursuant to 
1.20 	a life settlement contract.
1.21 		Subd. 3.Broker. "Broker" means a person who, on behalf of an owner and for a fee, 
1.22 	commission, or other valuable consideration, offers or attempts to negotiate life settlement 
1.23 	contracts between an owner and providers. A broker represents only the owner and owes a 
1.24 	fiduciary duty to the owner to act according to the owner's instructions, and in the best 
2.1 	interest of the owner, notwithstanding the manner in which the broker is compensated. 
2.2 	A broker does not include an attorney, certified public accountant, or financial planner 
2.3 	retained in the type of practice customarily performed in that person's professional 
2.4 	capacity to represent the owner whose compensation is not paid directly or indirectly by 
2.5 	the provider or any other person except the owner.
2.6 		Subd. 4.Business of life settlements. "Business of life settlements" means an 
2.7 	activity involved in, but not limited to, offering to enter into, soliciting, negotiating, 
2.8 	procuring, effectuating, monitoring, or tracking of life settlement contracts.
2.9 		Subd. 5.Chronically ill. "Chronically ill" means:
2.10 	(1) being unable to perform at least two activities of daily living including, but not 
2.11 	limited to, eating, toileting, transferring, bathing, dressing or continence;
2.12 	(2) requiring substantial supervision to protect the individual from threats to health 
2.13 	and safety due to severe cognitive impairment; or
2.14 	(3) having a level of disability similar to that described in clause (1) as determined 
2.15 	by the United States secretary of health and human services.
2.16 		Subd. 6.Commissioner. "Commissioner" means the commissioner of commerce.
2.17 		Subd. 7.Financing entity. "Financing entity" means an underwriter, placement 
2.18 	agent, lender, purchaser of securities, purchaser of a policy or certificate from a provider, 
2.19 	credit enhancer, or any entity that has a direct ownership in a policy or certificate that is 
2.20 	the subject of a life settlement contract, but:
2.21 	(1) whose principal activity related to the transaction is providing funds to effect the 
2.22 	life settlement contract or purchase of one or more policies; and
2.23 	(2) who has an agreement in writing with one or more providers to finance the 
2.24 	acquisition of life settlement contracts.
2.25 	Financing entity does not include a nonaccredited investor or purchaser.
2.26 		Subd. 8.Financing transaction. "Financing transaction" means a transaction in 
2.27 	which a licensed provider obtains financing from a financing entity including, without 
2.28 	limitation, any secured or unsecured financing, any securitization transaction, or any 
2.29 	securities offering which either is registered or exempt from registration under federal 
2.30 	and state securities law.
2.31 		Subd. 9.Fraudulent life settlement act. "Fraudulent life settlement act" includes:
2.32 	(a) acts or omissions committed by any person who, knowingly and with intent to 
2.33 	defraud, for the purpose of depriving another of property or for pecuniary gain, commits 
2.34 	or permits the person's employees or the person's agents to engage in acts including, 
2.35 	but not limited to:
3.1 	(1) presenting, causing to be presented, or preparing with knowledge and belief 
3.2 	that it will be presented to or by a provider, premium finance lender, broker, insurer, 
3.3 	insurance producer, or any other person, false material information or concealing material 
3.4 	information, as part of, in support of, or concerning a fact material to one or more of 
3.5 	the following:
3.6 	(i) an application for the issuance of a life settlement contract or insurance policy;
3.7 	(ii) the underwriting of a life settlement contract or insurance policy;
3.8 	(iii) a claim for payment or benefit pursuant to a life settlement contract or insurance 
3.9 	policy;
3.10 	(iv) premiums paid on an insurance policy;
3.11 	(v) payments and changes in ownership or beneficiary made in accordance with the 
3.12 	terms of a life settlement contract or insurance policy;
3.13 	(vi) the reinstatement or conversion of an insurance policy;
3.14 	(vii) in the solicitation, offer to enter into, or effectuation of a life settlement contract 
3.15 	or insurance policy;
3.16 	(viii) the issuance of written evidence of life settlement contracts or insurance; 
3.17 	(ix) any application for or the existence of or any payments related to a loan secured 
3.18 	directly or indirectly by any interest in a life insurance policy; or 
3.19 	(x) stranger-originated life insurance;
3.20 	(2) employing any device, scheme, or artifice to defraud in the business of life 
3.21 	settlements; or
3.22 	(3) in the solicitation, application, or issuance of a life insurance policy, employing 
3.23 	any device, scheme, or artifice in violation of state insurable interest laws; and
3.24 	(b) in the furtherance of a fraud or to prevent the detection of a fraud, acts by any 
3.25 	person which commit or permit the person's employees or the person's agents to:
3.26 	(1) remove, conceal, alter, destroy, or sequester from the commissioner the assets or 
3.27 	records of a licensee or other person engaged in the business of life settlements;
3.28 	(2) misrepresent or conceal the financial condition of a licensee, financing entity, 
3.29 	insurer, or other person;
3.30 	(3) transact the business of life settlements in violation of laws requiring a license, 
3.31 	certificate of authority, or other legal authority for the transaction of the business of life 
3.32 	settlements;
3.33 	(4) file with the commissioner or the chief insurance regulatory official of another 
3.34 	jurisdiction a document containing false information or otherwise concealing information 
3.35 	about a material fact from the commissioner;
4.1 	(5) engage in embezzlement, theft, misappropriation, or conversion of money, funds, 
4.2 	premiums, credits, or other property of a provider, insurer, insured, owner, insurance 
4.3 	policy owner, or any other person engaged in the business of life settlements or insurance;
4.4 	(6) knowingly and with intent to defraud, enter into, broker, or otherwise deal in a 
4.5 	life settlement contract, the subject of which is a life insurance policy that was obtained by 
4.6 	presenting false information concerning any fact material to the policy or by concealing, 
4.7 	for the purpose of misleading another, information concerning any fact material to the 
4.8 	policy where the owner or the owner's agent intended to defraud the policy's issuer;
4.9 	(7) attempt to commit, assist, aid or abet in the commission of, or conspiracy to 
4.10 	commit, the acts or omissions specified in this subdivision; or
4.11 	(8) misrepresent the state of residence of an owner to be a state or jurisdiction that 
4.12 	does not have a law substantially similar to sections 60A.957 to 60A.9587 for the purpose 
4.13 	of evading or avoiding the provisions of sections 60A.957 to 60A.9587.
4.14 		Subd. 10.Insured. "Insured" means the person covered under the policy being 
4.15 	considered for sale in a life settlement contract.
4.16 		Subd. 11.Life expectancy. "Life expectancy" means the arithmetic mean of the 
4.17 	number of months the insured under the life insurance policy to be settled can be expected 
4.18 	to live as determined by a life expectancy company considering medical records and 
4.19 	appropriate experiential data.
4.20 		Subd. 12.Life insurance producer. "Life insurance producer" means any person 
4.21 	licensed in this state as a resident or nonresident insurance producer who has received 
4.22 	qualification or authority for life insurance coverage or a life line of coverage pursuant to 
4.23 	........
4.24 		Subd. 13.Life settlement contract. (a) "Life settlement contract" means a written 
4.25 	agreement entered into between a provider and an owner, establishing the terms under 
4.26 	which compensation or anything of value will be paid, which compensation or thing of 
4.27 	value is less than the expected death benefit of the insurance policy or certificate, in return 
4.28 	for the owner's assignment, transfer, sale, devise, or bequest of the death benefit or any 
4.29 	portion of an insurance policy or certificate of insurance for compensation, provided, 
4.30 	however, that the minimum value for a life settlement contract shall be greater than a cash 
4.31 	surrender value or accelerated death benefit available at the time of an application for a life 
4.32 	settlement contract. Life settlement contract also includes the transfer for compensation or 
4.33 	value of ownership or beneficial interest in a trust or other entity that owns such policy if 
4.34 	the trust or other entity was formed or availed of for the principal purpose of acquiring 
4.35 	one or more life insurance contracts, which life insurance contract insures the life of a 
4.36 	person residing in this state.
5.1 	(b) Life settlement contract also includes a written agreement for a loan or other 
5.2 	lending transaction, secured primarily by a policy or a premium finance loan made for a 
5.3 	policy on or before the date of issuance of the policy where:
5.4 	(i) the loan proceeds are not used solely to pay premiums for the policy and any 
5.5 	costs or expenses incurred by the lender or the borrower in connection with the financing;
5.6 	(ii) the owner receives on the date of the premium finance loan a guarantee of the 
5.7 	future life settlement value of the policy; or
5.8 	(iii) the owner agrees on the date of the premium finance loan to sell the policy or 
5.9 	any portion of its death benefit on any date following the issuance of the policy.
5.10 	(c) Life settlement contract does not include:
5.11 	(1) a policy loan by a life insurance company pursuant to the terms of the life 
5.12 	insurance policy or accelerated death provisions contained in the life insurance policy, 
5.13 	whether issued with the original policy or as a rider;
5.14 	(2) a premium finance loan, as defined herein, or any loan made by a bank or other 
5.15 	licensed financial institution, provided that neither default on such loan nor the transfer of 
5.16 	the policy in connection with such default is pursuant to an agreement or understanding 
5.17 	with any other person for the purpose of evading regulation under sections 60A.957 
5.18 	to 60A.9587;
5.19 	(3) a collateral assignment of a life insurance policy by an owner;
5.20 	(4) a loan made by a lender that does not violate chapter 59A, provided the loan is 
5.21 	not described in clause (1), and is not otherwise within the definition of life settlement 
5.22 	contract;
5.23 	(5) an agreement where all the parties (i) are closely related to the insured by blood 
5.24 	or law or (ii) have a lawful substantial economic interest in the continued life, health, and 
5.25 	bodily safety of the person insured, or are trusts established primarily for the benefit 
5.26 	of the parties;
5.27 	(6) any designation, consent, or agreement by an insured who is an employee of an 
5.28 	employer in connection with the purchase by the employer, or trust established by the 
5.29 	employer, of life insurance on the life of the employee;
5.30 	(7) a bona fide business succession planning arrangement:
5.31 	(i) between one or more shareholders in a corporation or between a corporation and 
5.32 	one or more of its shareholders or one or more trusts, established by its shareholders;
5.33 	(ii) between one or more partners in a partnership or between a partnership and one 
5.34 	or more of its partners or one or more trusts, established by its partners; or
6.1 	(iii) between one or more members in a limited liability company or between a 
6.2 	limited liability company and one or more of its members or one or more trusts established 
6.3 	by its members;
6.4 	(8) an agreement entered into by a service recipient, or a trust established by the 
6.5 	service recipient, and a service provider, or a trust established by the service provider, who 
6.6 	performs significant services for the service recipient's trade or business; or 
6.7 	(9) any other contract, transaction, or arrangement from the definition of life 
6.8 	settlement contract that the commissioner determines is not of the type intended to be 
6.9 	regulated by sections 60A.957 to 60A.9587.
6.10 		Subd. 14.Net death benefit. "Net death benefit" means the amount of the life 
6.11 	insurance policy or certificate to be settled less any outstanding debts or liens. 
6.12 		Subd. 15.Owner. "Owner" means the owner of a life insurance policy or a 
6.13 	certificate holder under a group policy, with or without a terminal illness, who enters or 
6.14 	seeks to enter into a life settlement contract. An owner shall not be limited to an owner 
6.15 	of a life insurance policy or a certificate holder under a group policy that insures the life 
6.16 	of an individual with a terminal or chronic illness or condition except where specifically 
6.17 	addressed. Owner does not include:
6.18 	(1) any provider or other licensee under sections 60A.957 to 60A.9587;
6.19 	(2) a qualified institutional buyer as defined in Rule 144A of the federal Securities 
6.20 	Act of 1933, as amended;
6.21 	(3) a financing entity;
6.22 	(4) a special purpose entity; or
6.23 	(5) a related provider trust.
6.24 		Subd. 16.Patient identifying information. "Patient identifying information" 
6.25 	means an insured's address, telephone number, facsimile number, electronic mail address, 
6.26 	photograph or likeness, employer, employment status, Social Security number, or any 
6.27 	other information that is likely to lead to the identification of the insured.
6.28 		Subd. 17.Policy. "Policy" means an individual or group policy, group certificate, 
6.29 	contract, or arrangement of life insurance owned by a resident of this state, regardless of 
6.30 	whether delivered or issued for delivery in this state.
6.31 		Subd. 18.Premium finance loan. "Premium finance loan" is a loan made primarily 
6.32 	for the purposes of making premium payments on a life insurance policy, which loan is 
6.33 	secured by an interest in such life insurance policy.
6.34 		Subd. 19.Person. "Person" means any natural person or legal entity including, but 
6.35 	not limited to, a partnership, limited liability company, association, trust, or corporation.
7.1 		Subd. 20.Provider. "Provider" means a person, other than an owner, who enters 
7.2 	into or effectuates a life settlement contract with an owner. A provider does not include:
7.3 	(1) any bank, savings bank, savings and loan association, or credit union;
7.4 	(2) a licensed lending institution or creditor or secured party pursuant to a premium 
7.5 	finance loan agreement which takes an assignment of a life insurance policy or certificate 
7.6 	issued pursuant to a group life insurance policy as collateral for a loan;
7.7 	(3) the insurer of a life insurance policy or rider to the extent of providing accelerated 
7.8 	death benefits or riders under section 61A.072 or cash surrender value;
7.9 	(4) any natural person who enters into or effectuates no more than one agreement in 
7.10 	a calendar year for the transfer of a life insurance policy or certificate issued pursuant to a 
7.11 	group life insurance policy for compensation or anything of value less than the expected 
7.12 	death benefit payable under the policy;
7.13 	(5) a purchaser;
7.14 	(6) any authorized or eligible insurer that provides stop-loss coverage to a provider, 
7.15 	purchaser, financing entity, special purpose entity, or related provider trust;
7.16 	(7) a financing entity;
7.17 	(8) a special purpose entity;
7.18 	(9) a related provider trust;
7.19 	(10) a broker; or
7.20 	(11) an accredited investor or qualified institutional buyer as defined respectively in 
7.21 	Regulation D, Rule 501 or Rule 144A of the federal Securities Act of 1933, as amended, 
7.22 	who purchases a life settlement policy from a provider.
7.23 		Subd. 21.Purchased policy. "Purchased policy" means a policy or group certificate 
7.24 	that has been acquired by a provider pursuant to a life settlement contract.
7.25 		Subd. 22.Purchaser. "Purchaser" means a person who pays compensation or 
7.26 	anything of value as consideration for a beneficial interest in a trust which is vested with, 
7.27 	or for the assignment, transfer or sale of, an ownership or other interest in a life insurance 
7.28 	policy or a certificate issued pursuant to a group life insurance policy which has been 
7.29 	the subject of a life settlement contract.
7.30 		Subd. 23.Related provider trust. "Related provider trust" means a titling trust or 
7.31 	other trust established by a licensed provider or a financing entity for the sole purpose 
7.32 	of holding the ownership or beneficial interest in purchased policies in connection with 
7.33 	a financing transaction. In order to qualify as a related provider trust, the trust must 
7.34 	have a written agreement with the licensed provider under which the licensed provider 
7.35 	is responsible for ensuring compliance with all statutory and regulatory requirements 
7.36 	and under which the trust agrees to make all records and files relating to life settlement 
8.1 	transactions available to the Department of Commerce as if those records and files were 
8.2 	maintained directly by the licensed provider.
8.3 		Subd. 24.Settled policy. "Settled policy" means a life insurance policy or certificate 
8.4 	that has been acquired by a provider pursuant to a life settlement contract.
8.5 		Subd. 25.Special purpose entity. "Special purpose entity" means a corporation, 
8.6 	partnership, trust, limited liability company, or other legal entity formed solely to provide 
8.7 	either directly or indirectly access to institutional capital markets for a financing entity or 
8.8 	provider in connection with a transaction in which the securities in the special purpose 
8.9 	entity are acquired by the owner or by a qualified institutional buyer as defined in Rule 144 
8.10 	promulgated under the Securities Act of 1933, as amended; or the securities pay a fixed 
8.11 	rate of return commensurate with established asset-backed institutional capital markets.
8.12 		Subd. 26.Stranger-originated life insurance; STOLI. "Stranger-originated life 
8.13 	insurance" or "STOLI" means the procurement of new life insurance by persons or entities 
8.14 	that lack insurable interest on the insured and, at policy inception, such person or entity 
8.15 	owns or controls the policy or the majority of the death benefit in the policy and the 
8.16 	insured or insured's beneficiaries receive little or none of the proceeds of the death benefits 
8.17 	of the policy. Trusts that are created to give the appearance of insurable interest and are 
8.18 	used to initiate policies for investors violate insurable interest laws and the prohibition 
8.19 	against wagering on life.
8.20 		Subd. 27.Terminally ill. "Terminally ill" means having an illness or sickness that 
8.21 	can reasonably be expected to result in death in 24 months or less.

8.22 	Sec. 3. [60A.9573] LICENSING.
8.23 		Subdivision 1.Requirements. No person, wherever located, shall act as a provider 
8.24 	or broker with an owner or multiple owners who is a resident of this state, without first 
8.25 	having obtained a license from the commissioner. If there is more than one owner on a 
8.26 	single policy and the owners are residents of different states, the life settlement contract 
8.27 	shall be governed by the law of the state in which the owner having the largest percentage 
8.28 	ownership resides or, if the owners hold equal ownership, the state of residence of one 
8.29 	owner agreed upon in writing by all owners.
8.30 		Subd. 2.Application. Application for a provider or broker license shall be made 
8.31 	to the commissioner by the applicant on a form prescribed by the commissioner, and the 
8.32 	application shall be accompanied by a fee in an amount established by the commissioner, 
8.33 	provided, however, that the license and renewal fees for a provider license shall be 
8.34 	reasonable and that the license and renewal fees for a broker license shall not exceed 
9.1 	those established for an insurance producer, as such fees are otherwise provided for in 
9.2 	this chapter.
9.3 		Subd. 3.Nonresident producer. A life insurance producer who has been duly 
9.4 	licensed as a resident insurance producer with a life line of authority in this state or the 
9.5 	producer's home state for at least one year and is licensed as a nonresident producer in 
9.6 	this state shall be deemed to meet the licensing requirements of this section and shall be 
9.7 	permitted to operate as a broker.
9.8 		Subd. 4.Brokers. Not later than 30 days from the first day of operating as a broker, 
9.9 	the life insurance producer shall notify the commissioner that the producer is acting as 
9.10 	a broker on a form prescribed by the commissioner, and shall pay any applicable fee to 
9.11 	be determined by the commissioner. Notification shall include an acknowledgment by 
9.12 	the life insurance producer that the producer will operate as a broker in accordance with 
9.13 	sections 60A.957 to 60A.9587.
9.14 		Subd. 5.Life settlement contracts. The insurer that issued the policy that is the 
9.15 	subject of a life settlement contract shall not be responsible for any act or omission of a 
9.16 	broker, provider, or purchaser arising out of or in connection with the life settlement 
9.17 	transaction, unless the insurer receives compensation for the placement of a life settlement 
9.18 	contract from the broker, provider, or purchaser in connection with the life settlement 
9.19 	contract.
9.20 		Subd. 6.Exception. A person licensed as an attorney, certified public accountant, 
9.21 	or financial planner accredited by a nationally recognized accreditation agency, who is 
9.22 	retained to represent the owner, whose compensation is not paid directly or indirectly by 
9.23 	the provider or purchaser, may negotiate life settlement contracts on behalf of the owner 
9.24 	without having to obtain a license as a broker.
9.25 		Subd. 7.Renewals. Licenses may be renewed every 24 months on the anniversary 
9.26 	date upon payment of the periodic renewal fee. As specified in subdivision 2 the renewal 
9.27 	fee for a provider shall not exceed a reasonable fee. Failure to pay the fee within the terms 
9.28 	prescribed shall result in the automatic revocation of the license requiring periodic renewal.
9.29 		Subd. 8.Term. The term of a provider license shall be equal to that of a domestic 
9.30 	stock life insurance company and the term of a broker license shall be equal to that of an 
9.31 	insurance producer license. A license requiring periodic renewal may be renewed on its 
9.32 	anniversary date upon payment of the periodic renewal fee as specified in subdivision 2. 
9.33 	Failure to pay the fees on or before the renewal date shall result in expiration of the license. 
9.34 		Subd. 9.Disclosure of identity of stockholders. The applicant shall provide such 
9.35 	information as the commissioner may require on forms prepared by the commissioner. 
9.36 	The commissioner shall have authority, at any time, to require the applicant to fully 
10.1 	disclose the identity of the applicant's stockholders, except stockholders owning fewer 
10.2 	than ten percent of the shares of an applicant whose shares are publicly traded, partners, 
10.3 	officers, and employees, and the commissioner may, in the exercise of the commissioner's 
10.4 	sole discretion, refuse to issue such a license in the name of any person if not satisfied that 
10.5 	any officer, employee, stockholder, or partner thereof who may materially influence the 
10.6 	applicant's conduct meets the standards of sections 60A.957 to 60A.9584.
10.7 		Subd. 10.Entity licenses. A license issued to a partnership, corporation, or other 
10.8 	entity authorizes all members, officers, and designated employees to act as a licensee 
10.9 	under the license if those persons are named in the application and any supplements 
10.10 	to the application.
10.11 		Subd. 11.Issuance. Upon the filing of an application and the payment of the license 
10.12 	fee, the commissioner shall make an investigation of each applicant and may issue a 
10.13 	license if the commissioner finds that the applicant:
10.14 	(1) if a provider, has provided a detailed plan of operation;
10.15 	(2) is competent and trustworthy and intends to transact its business in good faith;
10.16 	(3) has a good business reputation and has had experience, training, or education so 
10.17 	as to be qualified in the business for which the license is applied;
10.18 	(4) if the applicant is a legal entity, is formed or organized pursuant to the laws of 
10.19 	this state, is a foreign legal entity authorized to transact business in this state, or provides a 
10.20 	certificate of good standing from the state of its domicile; and
10.21 	(5) has provided to the commissioner an antifraud plan that meets the requirements 
10.22 	of section 60A.9583 and includes:
10.23 	(i) a description of the procedures for detecting and investigating possible fraudulent 
10.24 	acts and procedures for resolving material inconsistencies between medical records and 
10.25 	insurance applications;
10.26 	(ii) a description of the procedures for reporting fraudulent insurance acts to the 
10.27 	commissioner;
10.28 	(iii) a description of the plan for antifraud education and training of its underwriters 
10.29 	and other personnel; and
10.30 	(iv) a written description or chart outlining the arrangement of the antifraud 
10.31 	personnel who are responsible for the investigation and reporting of possible fraudulent 
10.32 	insurance acts and investigating unresolved material inconsistencies between medical 
10.33 	records and insurance applications.
10.34 		Subd. 12.Designation of agent for service of process. The commissioner shall 
10.35 	not issue any license to any nonresident applicant, unless a written designation of an 
10.36 	agent for service of process is filed and maintained with the commissioner or unless the 
11.1 	applicant has filed with the commissioner the applicant's written irrevocable consent that 
11.2 	any action against the applicant may be commenced against the applicant by service 
11.3 	of process on the commissioner.
11.4 		Subd. 13.Annual statement. Each licensee shall file with the commissioner 
11.5 	on or before March 1 of each year an annual statement containing the information the 
11.6 	commissioner prescribes by rule.
11.7 		Subd. 14.Use of brokers. A provider may not use any person to perform the 
11.8 	functions of a broker as defined in sections 60A.957 to 60A.9587 unless the person holds 
11.9 	a current, valid license as a broker, and as provided in this section.
11.10 		Subd. 15.Use of providers. A broker may not use any person to perform the 
11.11 	functions of a provider as defined in sections 60A.957 to 60A.9587 unless such person 
11.12 	holds a current, valid license as a provider, and as provided in this section.
11.13 		Subd. 16.Providers and brokers; revised information. A provider or broker 
11.14 	shall provide to the commissioner new or revised information about officers, ten percent 
11.15 	or more stockholders, partners, directors, members, or designated employees within 30 
11.16 	days of the change.
11.17 		Subd. 17.Broker training. An individual licensed as a broker shall complete 
11.18 	on a biennial basis 15 hours of training related to life settlements and life settlement 
11.19 	transactions, as required by the commissioner; provided, however, that a life insurance 
11.20 	producer who is operating as a broker pursuant to this section shall not be subject to the 
11.21 	requirements of this subdivision. Any person failing to meet the requirements of this 
11.22 	subdivision shall be subject to the penalties imposed by the commissioner.

11.23 	Sec. 4. [60A.9574] LICENSE SUSPENSION, REVOCATION, OR REFUSAL 
11.24 	TO RENEW.
11.25 		Subdivision 1.Generally. The commissioner may suspend, revoke, or refuse to 
11.26 	renew the license of any licensee if the commissioner finds that:
11.27 	(1) there was any material misrepresentation in the application for the license;
11.28 	(2) the licensee or any officer, partner, member, or director has been guilty of 
11.29 	fraudulent or dishonest practices, is subject to a final administrative action, or is otherwise 
11.30 	shown to be untrustworthy or incompetent to act as a licensee;
11.31 	(3) the provider demonstrates a pattern of unreasonably withholding payments to 
11.32 	policy owners;
11.33 	(4) the licensee no longer meets the requirements for initial licensure;
11.34 	(5) the licensee or any officer, partner, member, or director has been convicted of 
11.35 	a felony, or of any misdemeanor of which criminal fraud is an element, or the licensee 
12.1 	has pleaded guilty or nolo contendere with respect to any felony or any misdemeanor of 
12.2 	which criminal fraud or moral turpitude is an element, regardless of whether a judgment 
12.3 	of conviction has been entered by the court;
12.4 	(6) the provider has entered into any life settlement contract using a form that has 
12.5 	not been approved pursuant to sections 60A.957 to 60A.9587;
12.6 	(7) the provider has failed to honor contractual obligations set out in a life settlement 
12.7 	contract;
12.8 	(8) the provider has assigned, transferred, or pledged a settled policy to a person 
12.9 	other than a provider licensed in this state, a purchaser, an accredited investor, or qualified 
12.10 	institutional buyer as defined respectively in Regulation D, Rule 501 or Rule 144A of the 
12.11 	federal Securities Act of 1933, as amended, financing entity, special purpose entity, or 
12.12 	related provider trust; or
12.13 	(9) the licensee or any officer, partner, member, or key management personnel has 
12.14 	violated any of the provisions of sections 60A.957 to 60A.9587.
12.15 		Subd. 2.Hearing required. Before the commissioner denies a license application 
12.16 	or suspends, revokes, or refuses to renew the license of any licensee under sections 
12.17 	60A.957 to 60A.9587, the commissioner shall conduct a hearing in accordance with this 
12.18 	state's laws governing administrative hearings.

12.19 	Sec. 5. [60A.9575] CONTRACT REQUIREMENTS.
12.20 		Subdivision 1.Filing and approval. No person may use any form of life 
12.21 	settlement contract in this state unless it has been filed with and approved, if required, 
12.22 	by the commissioner in a manner that conforms with the filing procedures and any time 
12.23 	restrictions or deeming provisions, if any, for life insurance forms, policies, and contracts.
12.24 		Subd. 2.Disclosures, consents, waivers, or acknowledgments. No insurer may, as 
12.25 	a condition of responding to a request for verification of coverage or in connection with the 
12.26 	transfer of a policy pursuant to a life settlement contract, require that the owner, insured, 
12.27 	provider, or broker sign any form, disclosure, consent, waiver, or acknowledgment that 
12.28 	has not been expressly approved by the commissioner for use in connection with life 
12.29 	settlement contracts in this state.
12.30 		Subd. 3.Disclosure statement; filing and approval. A person shall not use a 
12.31 	life settlement contract form or provide to an owner a disclosure statement form in 
12.32 	this state unless first filed with and approved by the commissioner. The commissioner 
12.33 	shall disapprove a life settlement contract form or disclosure statement form if, in the 
12.34 	commissioner's opinion, the contract or provisions contained therein fail to meet the 
12.35 	requirements of sections 60A.9578, 60A.9579, 60A.9581, and 60A.9585, subdivision 2, 
13.1 	or are unreasonable, contrary to the interests of the public, or otherwise misleading or 
13.2 	unfair to the owner. At the commissioner's discretion, the commissioner may require the 
13.3 	submission of advertising material.

13.4 	Sec. 6. [60A.9576] REPORTING REQUIREMENTS AND PRIVACY.
13.5 		Subdivision 1.Annual statement.  (a) For any policy settled within five years 
13.6 	of policy issuance, each provider shall file with the commissioner on or before March 
13.7 	1 of each year an annual statement containing such information as the commissioner 
13.8 	may prescribe by rule. In addition to any other requirements, the annual statement shall 
13.9 	specify the total number, aggregate face amount, and life settlement proceeds of policies 
13.10 	settled during the immediately preceding calendar year, together with a breakdown of the 
13.11 	information by policy issue year for each carrier.
13.12 	(b) Such information shall be limited to only those transactions where the insured 
13.13 	is a resident of this state and shall not include individual transaction data regarding the 
13.14 	business of life settlements or information that there is a reasonable basis to believe could 
13.15 	be used to identify the owner or the insured.
13.16 	(c) Every provider that willfully fails to file an annual statement as required in this 
13.17 	section, or willfully fails to reply within 30 days to a written inquiry by the commissioner 
13.18 	in connection therewith, shall, in addition to other penalties provided by this chapter, be 
13.19 	subject, upon due notice and opportunity to be heard, to a penalty of up to $250 per day of 
13.20 	delay, not to exceed $25,000 in the aggregate, for each such failure.
13.21 		Subd. 2.Nondisclosure of identity; exceptions. Except as otherwise allowed or 
13.22 	required by law, a provider, broker, insurance company, insurance producer, information 
13.23 	bureau, rating agency or company, or any other person with actual knowledge of an 
13.24 	insured's identity, shall not disclose the identity of an insured or information that there is a 
13.25 	reasonable basis to believe could be used to identify the insured or the insured's financial 
13.26 	or medical information to any other person unless the disclosure:
13.27 	(1) is necessary to effect a life settlement contract between the owner and a provider 
13.28 	and the owner and insured have provided prior written consent to the disclosure;
13.29 	(2) is necessary to effectuate the sale of life settlement contracts, or interests therein, 
13.30 	as investments, provided the sale is conducted in accordance with applicable state and 
13.31 	federal securities law and provided further that the owner and the insured have both 
13.32 	provided prior written consent to the disclosure;
13.33 	(3) is provided in response to an investigation or examination by the commissioner 
13.34 	or any other governmental officer or agency or pursuant to the requirements of section 
13.35 	60A.9583;
14.1 	(4) is a term or condition to the transfer of a policy by one provider to another 
14.2 	provider, in which case the receiving provider shall be required to comply with the 
14.3 	confidentiality requirements of subdivision 2;
14.4 	(5) is necessary to allow the provider, broker, or the provider's or broker's authorized 
14.5 	representatives to make contacts for the purpose of determining health status. For the 
14.6 	purposes of this section, the term authorized representative shall not include any person 
14.7 	who has or may have any financial interest in the settlement contract other than a provider, 
14.8 	licensed broker, financing entity, related provider trust, or special purpose entity; further, 
14.9 	a provider or broker shall require the provider's or broker's authorized representative to 
14.10 	agree in writing to adhere to the privacy provisions of sections 60A.957 to 60A.9587; or
14.11 	(6) is required to purchase stop-loss coverage.
14.12 		Subd. 3.Nonpublic personal information. Nonpublic personal information 
14.13 	solicited or obtained in connection with a proposed or actual life settlement contract 
14.14 	shall be subject to the provisions applicable to financial institutions under the federal 
14.15 	Gramm Leach Bliley Act, Public Law Number 106-102, and all other state and federal 
14.16 	laws relating to confidentiality of nonpublic personal information.

14.17 	Sec. 7. [60A.9577] EXAMINATION.
14.18 		Subdivision 1.Generally. The commissioner may, when the commissioner deems it 
14.19 	reasonably necessary to protect the interests of the public, examine the business and affairs 
14.20 	of any licensee or applicant for a license. The commissioner may order any licensee or 
14.21 	applicant to produce any records, books, files, or other information reasonably necessary 
14.22 	to ascertain whether such licensee or applicant is acting or has acted in violation of the law 
14.23 	or otherwise contrary to the interests of the public. The expenses incurred in conducting 
14.24 	any examination shall be paid by the licensee or applicant.
14.25 		Subd. 2.Examination reports. In lieu of an examination under sections 60A.957 to 
14.26 	60A.9587 of any foreign or alien licensee licensed in this state, the commissioner may, at 
14.27 	the commissioner's discretion, accept an examination report on the licensee as prepared by 
14.28 	the commissioner for the licensee's state of domicile or port-of-entry state.
14.29 		Subd. 3.Classification of data. Names of and individual identification data, or for 
14.30 	all owners and insureds shall be considered private and confidential information and shall 
14.31 	not be disclosed by the commissioner unless required by law.
14.32 		Subd. 4.Records retention. Records of all consummated transactions and life 
14.33 	settlement contracts shall be maintained by the provider for three years after the death of 
14.34 	the insured and shall be available to the commissioner for inspection during reasonable 
14.35 	business hours by the commissioner unless required by law.
15.1 		Subd. 5.Conduct of examinations. (a) Upon determining that an examination 
15.2 	should be conducted, the commissioner shall issue an examination warrant appointing one 
15.3 	or more examiners to perform the examination and instructing them as to the scope of the 
15.4 	examination. In conducting the examination, the examiner shall use methods common 
15.5 	to the examination of any life settlement licensee and should use those guidelines and 
15.6 	procedures set forth in an examiners' handbook adopted by a national organization.
15.7 	(b) Every licensee or person from whom information is sought, its officers, directors, 
15.8 	and agents shall provide to the examiners timely, convenient, and free access at all 
15.9 	reasonable hours at its offices to all books, records, accounts, papers, documents, assets, 
15.10 	and computers or other recordings relating to the property, assets, business, and affairs of 
15.11 	the licensee being examined. The officers, directors, employees, and agents of the licensee 
15.12 	or person shall facilitate the examination and aid in the examination so far as it is in 
15.13 	their power to do so. The refusal of a licensee, by its officers, directors, employees, or 
15.14 	agents to submit to examination or to comply with any reasonable written request of the 
15.15 	commissioner shall be grounds for suspension or refusal of, or nonrenewal of any license 
15.16 	or authority held by the licensee to engage in the life settlement business or other business 
15.17 	subject to the commissioner's jurisdiction. Any proceedings for suspension, revocation, or 
15.18 	refusal of any license or authority shall be conducted pursuant to chapter 14.
15.19 	(c) The commissioner shall have the power to issue subpoenas, to administer oaths, 
15.20 	and to examine under oath any person as to any matter pertinent to the examination. Upon 
15.21 	the failure or refusal of a person to obey a subpoena, the commissioner may petition a 
15.22 	court of competent jurisdiction, and upon proper showing, the court may enter an order 
15.23 	compelling the witness to appear and testify or produce documentary evidence.
15.24 	(d) When making an examination under sections 60A.957 to 60A.9587, the 
15.25 	commissioner may retain attorneys, appraisers, independent actuaries, independent 
15.26 	certified public accountants, or other professionals and specialists as examiners, the 
15.27 	reasonable cost of which shall be borne by the licensee that is the subject of the 
15.28 	examination.
15.29 	(e) Nothing contained in sections 60A.957 to 60A.9587 shall be construed to limit 
15.30 	the commissioner's authority to terminate or suspend an examination in order to pursue 
15.31 	other legal or regulatory action pursuant to the insurance laws of this state. Findings of 
15.32 	fact and conclusions made pursuant to any examination shall be prima facie evidence 
15.33 	in any legal or regulatory action.
15.34 	(f) Nothing contained in sections 60A.957 to 60A.9587 shall be construed to limit 
15.35 	the commissioner's authority to use and, if appropriate, to make public any final or 
15.36 	preliminary examination report, any examiner or licensee work papers or other documents, 
16.1 	or any other information discovered or developed during the course of any examination 
16.2 	in the furtherance of any legal or regulatory action which the commissioner may, in the 
16.3 	commissioner's sole discretion, deem appropriate.
16.4 		Subd. 6.Examination reports. (a) Examination reports shall be comprised of 
16.5 	only facts appearing upon the books, from the testimony of its officers or agents or other 
16.6 	persons examined concerning its affairs, and such conclusions and recommendations as 
16.7 	the examiners find reasonably warranted from the facts.
16.8 	(b) No later than 60 days following completion of the examination, the examiner 
16.9 	in charge shall file with the commissioner a verified written report of examination under 
16.10 	oath. Upon receipt of the verified report, the commissioner shall transmit the report to 
16.11 	the licensee examined, together with a notice that shall afford the licensee examined a 
16.12 	reasonable opportunity of not more than 30 days to make a written submission or rebuttal 
16.13 	with respect to any matters contained in the examination report and which shall become 
16.14 	part of the report or to request a hearing on any matter in dispute.
16.15 	(c) In the event the commissioner determines that regulatory action is appropriate 
16.16 	as a result of an examination, the commissioner may initiate any proceedings or actions 
16.17 	provided by law.
16.18 		Subd. 7.Confidentiality of examination information. (a) Names and individual 
16.19 	identification data for all owners, purchasers, and insureds shall be considered private 
16.20 	and confidential information and shall not be disclosed by the commissioner, unless the 
16.21 	disclosure is to another regulator or is required by law.
16.22 	(b) Except as otherwise provided in sections 60A.957 to 60A.9587, all examination 
16.23 	reports, working papers, recorded information, documents, and copies thereof produced 
16.24 	by, obtained by, or disclosed to the commissioner or any other person in the course of an 
16.25 	examination made under sections 60A.957 to 60A.9587, or in the course of analysis 
16.26 	or investigation by the commissioner of the financial condition or market conduct of a 
16.27 	licensee shall be confidential by law and privileged, shall not be subject to chapter 13, 
16.28 	shall not be subject to subpoena, and shall not be subject to discovery or admissible in 
16.29 	evidence in any private civil action. The commissioner is authorized to use the documents, 
16.30 	materials, or other information in the furtherance of any regulatory or legal action brought 
16.31 	as part of the commissioner's official duties. The licensee being examined may have 
16.32 	access to all documents used to make the report.
16.33 		Subd. 8.Conflict of interest. (a) An examiner may not be appointed by the 
16.34 	commissioner if the examiner, either directly or indirectly, has a conflict of interest or is 
16.35 	affiliated with the management of or owns a pecuniary interest in any person subject to 
17.1 	examination under sections 60A.957 to 60A.9587. This section shall not be construed to 
17.2 	automatically preclude an examiner from being:
17.3 	(1) an owner;
17.4 	(2) an insured in a life settlement contract or insurance policy; or
17.5 	(3) a beneficiary in an insurance policy that is proposed for a life settlement contract.
17.6 	(b) Notwithstanding the requirements of this subdivision, the commissioner 
17.7 	may retain from time to time, on an individual basis, qualified actuaries, certified 
17.8 	public accountants, or other similar individuals who are independently practicing their 
17.9 	professions, even though these persons may from time to time be similarly employed or 
17.10 	retained by persons subject to examination under sections 60A.957 to 60A.9587.
17.11 		Subd. 9.Immunity from liability. (a) No cause of action shall arise nor shall 
17.12 	any liability be imposed against the commissioner, the commissioner's authorized 
17.13 	representatives, or any examiner appointed by the commissioner for any statements made 
17.14 	or conduct performed in good faith while carrying out the provisions of sections 60A.957 
17.15 	to 60A.9587.
17.16 	(b) No cause of action shall arise, nor shall any liability be imposed, against any 
17.17 	person for the act of communicating or delivering information or data to the commissioner 
17.18 	or the commissioner's authorized representative or examiner pursuant to an examination 
17.19 	made under sections 60A.957 to 60A.9587, if the act of communication or delivery was 
17.20 	performed in good faith and without fraudulent intent or the intent to deceive. This 
17.21 	paragraph does not abrogate or modify in any way any common law or statutory privilege 
17.22 	or immunity heretofore enjoyed by any person identified in paragraph (a).
17.23 	(c) A person identified in paragraph (a) or (b) shall be entitled to an award of 
17.24 	attorney's fees and costs if the person is the prevailing party in a civil cause of action 
17.25 	for libel, slander, or any other relevant tort arising out of activities in carrying out the 
17.26 	provisions of sections 60A.957 to 60A.9587 and the party bringing the action was 
17.27 	not substantially justified in doing so. For purposes of this section, a proceeding is 
17.28 	substantially justified if it had a reasonable basis in law or fact at the time that it was 
17.29 	initiated.
17.30 		Subd. 10.Investigative authority of the commissioner. The commissioner may 
17.31 	investigate suspected fraudulent life settlement acts and persons engaged in the business 
17.32 	of life settlements.

17.33 	Sec. 8. [60A.9578] ADVERTISING.
17.34 	(a) A broker or provider licensed pursuant to sections 60A.957 to 60A.9587 may 
17.35 	conduct or participate in advertisements within this state. Such advertisements shall 
18.1 	comply with all advertising and marketing laws that are applicable to life insurers or to 
18.2 	brokers and providers licensed pursuant to sections 60A.957 to 60A.9587.
18.3 	(b) Advertisements shall be accurate, truthful, and not misleading in fact or by 
18.4 	implication.
18.5 	(c) No person or trust shall directly or indirectly, market, advertise, solicit, or 
18.6 	otherwise promote the purchase of a policy for the sole purpose of or with the primary 
18.7 	emphasis on settling the policy. However, it shall be permitted for any such person or trust 
18.8 	to advise a prospective owner that a life settlement is an available alternative transaction 
18.9 	to the owner in addition to policy surrender and/or policy retention.

18.10 	Sec. 9. [60A.9579] DISCLOSURE TO OWNERS.
18.11 		Subdivision 1.Provider disclosures. The provider shall provide in writing, in a 
18.12 	separate document that is signed by the owner and provider, the following information to 
18.13 	the owner no later than the date the life settlement contract is signed by all parties:
18.14 	(1) the fact that possible alternatives to life settlement contracts exist, including, but 
18.15 	not limited to, accelerated benefits offered by the issuer of the life insurance policy;
18.16 	(2) the fact that some or all of the proceeds of a life settlement contract may be 
18.17 	taxable and that assistance should be sought from a professional tax advisor;
18.18 	(3) the fact that the proceeds from a life settlement contract could be subject to 
18.19 	the claims of creditors;
18.20 	(4) the fact that receipt of proceeds from a life settlement contract may adversely 
18.21 	affect the recipients' eligibility for public assistance or other government benefits or 
18.22 	entitlements and that advice should be obtained from the appropriate agencies;
18.23 	(5) the fact that the owner has a right to terminate a life settlement contract within 15 
18.24 	days of the date it is executed by all parties and the owner has received the disclosures 
18.25 	contained herein. Rescission, if exercised by the owner, is effective only if both notice of 
18.26 	the rescission is given, and the owner repays all proceeds and any premiums, loans, and 
18.27 	loan interest paid on account of the provider within the rescission period. If the insured 
18.28 	dies during the rescission period, the contract shall be deemed to have been rescinded 
18.29 	subject to repayment by the owner or the owner's estate of all proceeds and any premiums, 
18.30 	loans, and loan interest to the provider;
18.31 	(6) the fact that proceeds will be sent to the owner within three business days after the 
18.32 	provider has received the insurer or group administrator's acknowledgment that ownership 
18.33 	of the policy or interest in the certificate has been transferred and the beneficiary has been 
18.34 	designated in accordance with the terms of the life settlement contract;
19.1 	(7) the fact that entering into a life settlement contract may cause other rights or 
19.2 	benefits, including conversion rights and waiver of premium benefits that may exist under 
19.3 	the policy or certificate of a group policy to be forfeited by the owner and that assistance 
19.4 	should be sought from a professional financial advisor;
19.5 	(8) the amount and method of calculating the compensation paid or to be paid to 
19.6 	the broker, or any other person acting for the owner in connection with the transaction, 
19.7 	wherein the term compensation includes anything of value paid or given;
19.8 	(9) the date by which the funds will be available to the owner and the transmitter of 
19.9 	the funds;
19.10 	(10) the fact that the commissioner shall require delivery of a buyer's guide or a 
19.11 	similar consumer advisory package in the form prescribed by the commissioner to owners 
19.12 	during the solicitation process;
19.13 	(11) the disclosure document shall contain the following language: "all medical, 
19.14 	financial, or personal information solicited or obtained by a provider or broker about an 
19.15 	insured, including the insured's identity or the identity of family members, a spouse or 
19.16 	a significant other may be disclosed as necessary to effect the life settlement contract 
19.17 	between the owner and provider. If you are asked to provide this information, you will be 
19.18 	asked to consent to the disclosure. The information may be provided to someone who 
19.19 	buys the policy or provides funds for the purchase. You may be asked to renew your 
19.20 	permission to share information every two years";
19.21 	(12) the fact that the commissioner shall require providers and brokers to print 
19.22 	separate signed fraud warnings on their applications and on their life settlement contracts 
19.23 	is as follows:
19.24 	"Any person who knowingly presents false information in an application for 
19.25 	insurance or life settlement contract is guilty of a crime and may be subject to fines 
19.26 	and confinement in prison.";
19.27 	(13) the fact that the insured may be contacted by either the provider or broker or 
19.28 	the provider's or broker's authorized representative for the purpose of determining the 
19.29 	insured's health status or to verify the insured's address. This contact is limited to once 
19.30 	every three months if the insured has a life expectancy of more than one year, and no more 
19.31 	than once per month if the insured has a life expectancy of one year or less;
19.32 	(14) the affiliation, if any, between the provider and the issuer of the insurance 
19.33 	policy to be settled;
19.34 	(15) that a broker represents exclusively the owner, and not the insurer or the 
19.35 	provider or any other person, and owes a fiduciary duty to the owner, including a duty to 
19.36 	act according to the owner's instructions and in the best interest of the owner;
20.1 	(16) the document shall include the name, address, and telephone number of the 
20.2 	provider;
20.3 	(17) the name, business address, and telephone number of the independent 
20.4 	third-party escrow agent, and the fact that the owner may inspect or receive copies of the 
20.5 	relevant escrow or trust agreements or documents; and
20.6 	(18) the fact that a change of ownership could in the future limit the insured's ability 
20.7 	to purchase future insurance on the insured's life because there is a limit to how much 
20.8 	coverage insurers will issue on one life.
20.9 		Subd. 2.Display.  The written disclosures shall be conspicuously displayed in any 
20.10 	life settlement contract furnished to the owner by a provider including any affiliations or 
20.11 	contractual arrangements between the provider and the broker.
20.12 		Subd. 3.Broker disclosures. A broker shall provide the owner and the provider 
20.13 	with at least the following disclosures no later than the date the life settlement contract 
20.14 	is signed by all parties. The disclosures shall be conspicuously displayed in the life 
20.15 	settlement contract or in a separate document signed by the owner and provide the 
20.16 	following information:
20.17 	(1) the name, business address, and telephone number of the broker;
20.18 	(2) a full, complete, and accurate description of all the offers, counteroffers, 
20.19 	acceptances, and rejections relating to the proposed life settlement contract;
20.20 	(3) a written disclosure of any affiliations or contractual arrangements between the 
20.21 	broker and any person making an offer in connection with the proposed life settlement 
20.22 	contracts;
20.23 	(4) the name of each broker who receives compensation and the amount of 
20.24 	compensation received by that broker, which compensation includes anything of value 
20.25 	paid or given to the broker in connection with the life settlement contract;
20.26 	(5) a complete reconciliation of the gross offer or bid by the provider to the net 
20.27 	amount of proceeds or value to be received by the owner. For the purpose of this section, 
20.28 	gross offer or bid shall mean the total amount or value offered by the provider for the 
20.29 	purchase of one or more life insurance policies, inclusive of commissions and fees; and
20.30 	(6) the failure to provide the disclosures or rights described in this section shall be 
20.31 	deemed an unfair trade practice pursuant to section 60A.9587.

20.32 	Sec. 10. [60A.958] DISCLOSURE BY INSURER.
20.33 		Subdivision 1.Premium payment financing. In addition to other questions an 
20.34 	insurance carrier may lawfully pose to a life insurance applicant, insurance carriers 
20.35 	may inquire in the application for insurance whether the proposed owner intends to 
21.1 	pay premiums with the assistance of financing from a lender that will use the policy as 
21.2 	collateral to support the financing.
21.3 	If, as described in section 60A.9572, subdivision 13, the loan provides funds which 
21.4 	can be used for a purpose other than paying for the premiums, costs, and expenses 
21.5 	associated with obtaining and maintaining the life insurance policy and loan, the 
21.6 	application shall be rejected as a violation of the prohibited practices in section 60A.9583.
21.7 	If the financing does not violate 60A.9583 in this manner, the insurance carrier:
21.8 	(1) may make disclosures, including but not limited to such as the following, to the 
21.9 	applicant and the insured, either on the application or an amendment to the application 
21.10 	to be completed no later than the delivery of the policy:
21.11 	"If you have entered into a loan arrangement where the policy is used as collateral, 
21.12 	and the policy does change ownership at some point in the future in satisfaction 
21.13 	of the loan, the following may be true:
21.14 	(i) a change of ownership could lead to a stranger owning an interest in the insured's 
21.15 	life;
21.16 	(ii) a change of ownership could in the future limit your ability to purchase future 
21.17 	insurance on the insured's life because there is a limit to how much coverage insurers 
21.18 	will issue on one life;
21.19 	(iii) should there be a change of ownership and you wish to obtain more insurance 
21.20 	coverage on the insured's life in the future, the insured's higher issue age, a change 
21.21 	in health status, and/or other factors may reduce the ability to obtain coverage and/or 
21.22 	may result in significantly higher premiums;
21.23 	(iv) you should consult a professional advisor, since a change in ownership in 
21.24 	satisfaction of the loan may result in tax consequences to the owner, depending on 
21.25 	the structure of the loan"; and 
21.26 	(2) may require certifications, such as the following, from the applicant and the 
21.27 	insured:
21.28 	(i) "I have not entered into any agreement or arrangement providing for the future 
21.29 	sale of this life insurance policy";
21.30 	(ii) "My loan arrangement for this policy provides funds sufficient to pay for some or 
21.31 	all of the premiums, costs, and expenses associated with obtaining and maintaining 
21.32 	my life insurance policy, but I have not entered into any agreement by which I am to 
21.33 	receive consideration in exchange for procuring this policy"; and 
21.34 	(iii) "The borrower has an insurable interest in the insured."
21.35 		Subd. 2.Notice of alternative transaction. With respect to each policy issued by 
21.36 	an insurance company, the insurance company shall send written notice to the owner of an 
22.1 	individual life insurance policy, or a certificate holder under a group life insurance policy, 
22.2 	where the insured person under such policy is age 60 or older or is known to be terminally 
22.3 	ill or chronically ill, that a life settlement is an available alternative transaction to such 
22.4 	owner at the time of each of the following:
22.5 	(1) when a life insurance company receives from such owner a request to surrender, 
22.6 	in whole or in part, an individual life insurance policy, or a certificate under a group 
22.7 	life insurance policy;
22.8 	(2) when a life insurance company receives from such owner a request to receive 
22.9 	an accelerated death benefit under an individual life insurance policy, or a certificate 
22.10 	under a group life insurance policy;
22.11 	(3) when a life insurance company receives from such owner a request to collaterally 
22.12 	assign an individual life insurance policy, or a certificate under a group life insurance 
22.13 	policy as security for a loan;
22.14 	(4) when a life insurance company sends to such owner a notice of lapse of an 
22.15 	individual life insurance policy, or a certificate under a group life insurance policy; or
22.16 	(5) or at any other time that the commissioner may require by rule or regulation.

22.17 	Sec. 11. [60A.9581] LIFE SETTLEMENT CONTRACTS; GENERAL RULES.
22.18 		Subdivision 1.Life settlement contracts. A provider entering into a life settlement 
22.19 	contract with any owner of a policy, wherein the insured is terminally or chronically 
22.20 	ill, shall first obtain:
22.21 	(1) if the owner is the insured, a written statement from a licensed attending 
22.22 	physician that the owner is of sound mind and under no constraint or undue influence to 
22.23 	enter into a settlement contract; and
22.24 	(2) a document in which the insured consents to the release of the insured's medical 
22.25 	records to a provider, settlement broker, or insurance producer and, if the policy was 
22.26 	issued less than two years from the date of application for a settlement contract, to the 
22.27 	insurance company that issued the policy.
22.28 		Subd. 2.Request for verification of coverage. The insurer shall respond to a 
22.29 	request for verification of coverage submitted by a provider, settlement broker, or life 
22.30 	insurance producer not later than 30 calendar days of the date the request is received. 
22.31 	The request for verification of coverage must be made on a form approved by the 
22.32 	commissioner. The insurer shall complete and issue the verification of coverage or 
22.33 	indicate in which respects it is unable to respond. In its response, the insurer shall indicate 
22.34 	whether, based on the medical evidence and documents provided, the insurer intends to 
22.35 	pursue an investigation at this time regarding the validity of the insurance contract.
23.1 		Subd. 3.Owner's consent. Before or at the time of execution of the settlement 
23.2 	contract, the provider shall obtain a witnessed document in which the owner consents to 
23.3 	the settlement contract, represents that the owner has a full and complete understanding 
23.4 	of the settlement contract, that the owner has a full and complete understanding of the 
23.5 	benefits of the policy, acknowledges that the owner is entering into the settlement contract 
23.6 	freely and voluntarily, and, for persons with a terminal or chronic illness or condition, 
23.7 	acknowledges that the insured has a terminal or chronic illness and that the terminal or 
23.8 	chronic illness or condition was diagnosed after the policy was issued.
23.9 		Subd. 4.Unreasonable delay in change of ownership or beneficiary. The insurer 
23.10 	shall not unreasonably delay effecting change of ownership or beneficiary with any life 
23.11 	settlement contract lawfully entered into in this state or with a resident of this state.
23.12 		Subd. 5.Alternative compliance. (a) If a settlement broker or life insurance 
23.13 	producer performs any of these activities required of the provider, the provider is deemed 
23.14 	to have fulfilled the requirements of this section.
23.15 	(b) If a broker performs those verification of coverage activities required of the 
23.16 	provider, the provider is deemed to have fulfilled the requirements of section 60A.9579, 
23.17 	subdivision 1.
23.18 		Subd. 6.Notice that policy subject to life settlement contracts. Within 20 days 
23.19 	after an owner executes the life settlement contract, the provider shall give written notice 
23.20 	to the insurer that issued the insurance policy that the policy has become subject to a 
23.21 	life settlement contract. The notice shall be accompanied by the documents required by 
23.22 	section 60A.958, subdivision 1, clause (1).
23.23 		Subd. 7.Confidentiality of medical information. All medical information 
23.24 	solicited or obtained by any licensee shall be subject to the applicable provision of state 
23.25 	law relating to confidentiality of medical information if not otherwise provided in sections 
23.26 	60A.957 to 60A.9587.
23.27 		Subd. 8.Rescission. All life settlement contracts entered into in this state shall 
23.28 	provide that the owner may rescind the contract on or before 15 days after the date it 
23.29 	is executed by all parties thereto. Rescission, if exercised by the owner, is effective 
23.30 	only if both notice of the rescission is given, and the owner repays all proceeds and any 
23.31 	premiums, loans, and loan interest paid on account of the provider within the rescission 
23.32 	period. If the insured dies during the rescission period, the contract shall be deemed 
23.33 	to have been rescinded subject to repayment by the owner or the owner's estate of all 
23.34 	proceeds and any premiums, loans, and loan interest to the provider.
23.35 		Subd. 9.Settlement proceeds. Within three business days after receipt from the 
23.36 	owner of documents to effect the transfer of the insurance policy, the provider shall pay the 
24.1 	proceeds of the settlement to an escrow or trust account managed by a trustee or escrow 
24.2 	agent in a state or federally chartered financial institution pending acknowledgment of 
24.3 	the transfer by the issuer of the policy. The trustee or escrow agent shall be required to 
24.4 	transfer the proceeds due to the owner within three business days of acknowledgment 
24.5 	of the transfer from the insurer.
24.6 		Subd. 10.Failure to tender proceeds. Failure to tender the life settlement contract 
24.7 	proceeds to the owner by the date disclosed to the owner renders the contract voidable 
24.8 	by the owner for lack of consideration until the time the proceeds are tendered to and 
24.9 	accepted by the owner. A failure to give written notice of the right of rescission hereunder 
24.10 	shall toll the right of rescission until 30 days after the written notice of the right of 
24.11 	rescission has been given.
24.12 		Subd. 11.Fee computation. Any fee paid by a provider, party, individual, or an 
24.13 	owner to a broker in exchange for services provided to the owner pertaining to a life 
24.14 	settlement contract shall be computed as a percentage of the offer obtained, not the face 
24.15 	value of the policy. Nothing in this section shall be construed as prohibiting a broker from 
24.16 	reducing such broker's fee below this percentage if the broker so chooses.
24.17 		Subd. 12.Broker's disclosure. The broker shall disclose to the owner anything of 
24.18 	value paid or given to a broker which relates to a life settlement contract.
24.19 		Subd. 13.Prohibition; entry into life settlement contract.  No person at any time 
24.20 	prior to, or at the time of, the application for, or issuance of, a policy, or during a two-year 
24.21 	period commencing with the date of issuance of the policy, shall enter into a life settlement 
24.22 	contract regardless of the date the compensation is to be provided and regardless of the 
24.23 	date the assignment, transfer, sale, devise, bequest, or surrender of the policy is to occur. 
24.24 	This prohibition shall not apply if the owner certifies to the provider that:
24.25 	(1) the policy was issued upon the owner's exercise of conversion rights arising out 
24.26 	of a group or individual policy, provided the total of the time covered under the conversion 
24.27 	policy plus the time covered under the prior policy is at least 24 months. The time covered 
24.28 	under a group policy must be calculated without regard to a change in insurance carriers, 
24.29 	provided the coverage has been continuous and under the same group sponsorship;
24.30 	(2) the owner submits independent evidence to the provider that one or more of the 
24.31 	following conditions have been met within the two-year period:
24.32 	(i) the owner or insured is terminally or chronically ill;
24.33 	(ii) the owner or insured disposes of his ownership interests in a closely held 
24.34 	corporation, pursuant to the terms of a buyout or other similar agreement in effect at the 
24.35 	time the insurance policy was initially issued;
24.36 	(iii) the owner's spouse dies;
25.1 	(iv) the owner divorces the owner's spouse;
25.2 	(v) the owner retires from full-time employment;
25.3 	(vi) the owner becomes physically or mentally disabled and a physician determines 
25.4 	that the disability prevents the owner from maintaining full-time employment; or
25.5 	(vii) a final order, judgment, or decree is entered by a court of competent jurisdiction, 
25.6 	on the application of a creditor of the owner, adjudicating the owner bankrupt or insolvent, 
25.7 	or approving a petition seeking reorganization of the owner or appointing a receiver, 
25.8 	trustee, or liquidator to all or a substantial part of the owner's assets;
25.9 	(3) copies of the independent evidence required by clause (2) shall be submitted to 
25.10 	the insurer when the provider submits a request to the insurer for verification of coverage. 
25.11 	The copies shall be accompanied by a letter of attestation from the provider that the 
25.12 	copies are true and correct copies of the documents received by the provider. Nothing 
25.13 	in this section shall prohibit an insurer from exercising its right to contest the validity 
25.14 	of any policy; and
25.15 	(4) if the provider submits to the insurer a copy of independent evidence provided 
25.16 	for in clause (2), item (i), when the provider submits a request to the insurer to effect the 
25.17 	transfer of the policy to the provider, the copy is deemed to establish that the settlement 
25.18 	contract satisfies the requirements of this section.

25.19 	Sec. 12. [60A.9582] AUTHORITY TO ADOPT RULES; CONFLICT OF LAWS.
25.20 		Subdivision 1.Rulemaking. The commissioner may adopt rules implementing 
25.21 	sections 60A.957 to 60A.9587 and regulating the activities and relationships of providers, 
25.22 	brokers, insurers, and agents, subject to statutory limitations on administrative rulemaking.
25.23 		Subd. 2.Conflict of laws. (a) If there is more than one owner on a single policy, and 
25.24 	the owners are residents of different states, the life settlement contract shall be governed 
25.25 	by the law of the state in which the owner having the largest percentage ownership resides 
25.26 	or, if the owners hold equal ownership, the state of residence of one owner agreed upon 
25.27 	in writing by all of the owners. The law of the state of the insured shall govern in the 
25.28 	event that equal owners fail to agree in writing upon a state of residence for jurisdictional 
25.29 	purposes.
25.30 	(b) A provider from this state who enters into a life settlement contract with an 
25.31 	owner who is a resident of another state that has enacted statutes or adopted regulations 
25.32 	governing life settlement contracts shall be governed in the effectuation of that life 
25.33 	settlement contract by the statutes and regulations of the owner's state of residence. If the 
25.34 	state in which the owner is a resident has not enacted statutes or regulations governing life 
25.35 	settlement contracts, the provider shall give the owner notice that neither state regulates 
26.1 	the transaction upon which the owner is entering. For transactions in those states, however, 
26.2 	the provider is to maintain all records required if the transactions were executed in the 
26.3 	state of residence. The forms used in those states need not be approved by the department.
26.4 	(c) If there is a conflict in the laws that apply to an owner and a purchaser in any 
26.5 	individual transaction, the laws of the state that apply to the owner shall take precedence 
26.6 	and the provider shall comply with those laws.

26.7 	Sec. 13. [60A.9583] PROHIBITED PRACTICES.
26.8 	It is unlawful for any person to:
26.9 	(1) enter into a life settlement contract if such person knows or reasonably should 
26.10 	have known that the life insurance policy was obtained by means of a false, deceptive, 
26.11 	or misleading application for such policy;
26.12 	(2) engage in any transaction, practice, or course of business if such person knows 
26.13 	or reasonably should have known that the intent was to avoid the notice requirements 
26.14 	of this section;
26.15 	(3) engage in any fraudulent act or practice in connection with any transaction 
26.16 	relating to any settlement involving an owner who is a resident of this state;
26.17 	(4) issue, solicit, market, or otherwise promote the purchase of an insurance policy 
26.18 	for the purpose of or with an emphasis on settling the policy;
26.19 	(5) enter into a life settlement contract on a policy that was the subject of a premium 
26.20 	finance agreement as described in section 60A.9572, subdivision 13, paragraph (b), 
26.21 	clause (2);
26.22 	(6) with respect to any settlement contract or insurance policy and a broker, 
26.23 	knowingly solicit an offer from, effectuate a life settlement contract with, or make a sale to 
26.24 	any provider, financing entity, or related provider trust that is controlling, controlled by, or 
26.25 	under common control with such broker unless the relationship is disclosed to the owner;
26.26 	(7) with respect to any life settlement contract or insurance policy and a provider, 
26.27 	knowingly enter into a life settlement contract with a owner, if, in connection with such 
26.28 	life settlement contract, anything of value will be paid to a broker that is controlling, 
26.29 	controlled by, or under common control with such provider or the financing entity or 
26.30 	related provider trust that is involved in such settlement contract unless the relationship is 
26.31 	disclosed to the owner;
26.32 	(8) with respect to a provider, enter into a life settlement contract unless the life 
26.33 	settlement promotional, advertising, and marketing materials, as may be prescribed by 
26.34 	regulation, have been filed with the commissioner. In no event shall any marketing 
26.35 	materials expressly reference that the insurance is "free" for any period of time. The 
27.1 	inclusion of any reference in the marketing materials that would cause an owner to 
27.2 	reasonably believe that the insurance is free for any period of time shall be considered a 
27.3 	violation of this act;
27.4 	(9) with respect to any life insurance producer, insurance company, broker, or 
27.5 	provider, make any statement or representation to the applicant or policyholder in 
27.6 	connection with the sale or financing of a life insurance policy to the effect that the 
27.7 	insurance is free or without cost to the policyholder for any period of time unless provided 
27.8 	in the policy; or
27.9 	(10) if an insurer, to:
27.10 	(i) prohibit, restrict, limit, or impair a life insurance producer from lawfully 
27.11 	negotiating a life settlement contract on behalf of an owner, aiding and assisting an owner 
27.12 	with a life settlement contract, or otherwise participating in a life settlement transaction 
27.13 	under sections 60A.157 to 60A.9587;
27.14 	 (ii) engage in or permit any discrimination between individuals of the same class, 
27.15 	same policy amount, and equal expectation of life in the rates charged for any life 
27.16 	insurance policy or annuity contract based upon an individual's having entered into a life 
27.17 	settlement contract or being insured under a settled policy;
27.18 	(iii) make any false or misleading statement as to the business of life settlements or 
27.19 	financing premiums due for a policy or to any owner or insured for the purpose of inducing 
27.20 	or tending to induce the owner or insured not to enter into a life settlement contract; or
27.21 	(iv) engage in any transaction, act, practice or course of business or dealing 
27.22 	which restricts, limits or impairs in any way the lawful transfer of ownership, change 
27.23 	of beneficiary, or assignment of a policy.

27.24 	Sec. 14. [60A.9584] FRAUD PREVENTION AND CONTROL.
27.25 		Subdivision 1.Fraudulent life settlement acts, interference and participation of 
27.26 	convicted felons prohibited. (a) A person shall not commit a fraudulent life settlement 
27.27 	act.
27.28 	(b) A person shall not knowingly and intentionally interfere with the enforcement of 
27.29 	the provisions of sections 60A.957 to 60A.9587 or investigations of suspected or actual 
27.30 	violations of sections 60A.957 to 60A.9587.
27.31 	(c) A person in the business of life settlements shall not knowingly or intentionally 
27.32 	permit any person convicted of a felony involving dishonesty or breach of trust to 
27.33 	participate in the business of life settlements.
28.1 		Subd. 2.Fraud warning required. (a) Life settlement contracts and applications 
28.2 	for life settlement contracts, regardless of the form of transmission, shall contain the 
28.3 	following statement or a substantially similar statement:
28.4 	"Any person who knowingly presents false information in an application for 
28.5 	insurance or life settlement contract is guilty of a crime and may be subject to fines 
28.6 	and confinement in prison."
28.7 	(b) The lack of a statement as required in paragraph (a) does not constitute a defense 
28.8 	in any prosecution for a fraudulent life settlement act.
28.9 		Subd. 3.Mandatory reporting of fraudulent life settlement acts. (a) Any person 
28.10 	engaged in the business of life settlements having knowledge or a reasonable belief that 
28.11 	a fraudulent life settlement act is being, will be, or has been committed shall provide 
28.12 	to the commissioner the information required by, and in a manner prescribed by, the 
28.13 	commissioner.
28.14 	(b) Any other person having knowledge or a reasonable belief that a fraudulent life 
28.15 	settlement act is being, will be, or has been committed may provide to the commissioner 
28.16 	the information required by, and in a manner prescribed by, the commissioner.
28.17 		Subd. 4.Immunity from liability. (a) No civil liability shall be imposed on and no 
28.18 	cause of action shall arise from a person's furnishing information concerning suspected, 
28.19 	anticipated, or completed fraudulent life settlement acts or suspected or completed 
28.20 	fraudulent insurance acts, if the information is provided to or received from:
28.21 	(1) the commissioner or the commissioner's employees, agents, or representatives;
28.22 	(2) federal, state, or local law enforcement or regulatory officials or their employees, 
28.23 	agents, or representatives;
28.24 	(3) a person involved in the prevention and detection of fraudulent life settlement 
28.25 	acts or that person's agents, employees, or representatives;
28.26 	(4) any regulatory body or their employees, agents, or representatives, overseeing 
28.27 	life insurance, life settlements, securities, or investment fraud;
28.28 	(5) the life insurer that issued the life insurance policy covering the life of the 
28.29 	insured; or
28.30 	(6) the licensee and any agents, employees, or representatives.
28.31 	(b) Paragraph (a) shall not apply to statements made with actual malice. In an action 
28.32 	brought against a person for filing a report or furnishing other information concerning a 
28.33 	fraudulent life settlement act or a fraudulent insurance act, the party bringing the action 
28.34 	shall plead specifically any allegation that paragraph (a) does not apply because the person 
28.35 	filing the report or furnishing the information did so with actual malice.
29.1 	(c) A person identified in paragraph (a) shall be entitled to an award of attorney's 
29.2 	fees and costs if the person is the prevailing party in a civil cause of action for libel, 
29.3 	slander, or any other relevant tort arising out of activities in carrying out the provisions 
29.4 	of sections 60A.957 to 60A.9587 and the party bringing the action was not substantially 
29.5 	justified in doing so. For purposes of this section, a proceeding is "substantially justified" 
29.6 	if it had a reasonable basis in law or fact at the time that it was initiated.
29.7 	(d) This section does not abrogate or modify common law or statutory privileges or 
29.8 	immunities enjoyed by a person described in paragraph (a).
29.9 		Subd. 5.Confidentiality. (a) The documents and evidence provided pursuant to 
29.10 	subdivision 4 or obtained by the commissioner in an investigation of suspected or actual 
29.11 	fraudulent life settlement acts shall be privileged and confidential and shall not be a public 
29.12 	record and shall not be subject to discovery or subpoena in a civil or criminal action.
29.13 	(b) Paragraph (a) does not prohibit release by the commissioner of documents and 
29.14 	evidence obtained in an investigation of suspected or actual fraudulent life settlement acts:
29.15 	(1) in administrative or judicial proceedings to enforce laws administered by the 
29.16 	commissioner;
29.17 	(2) to federal, state, or local law enforcement or regulatory agencies, to an 
29.18 	organization established for the purpose of detecting and preventing fraudulent life 
29.19 	settlement acts or to the National Association of Insurance Commissioners; or
29.20 	(3) at the discretion of the commissioner, to a person in the business of life 
29.21 	settlements that is aggrieved by a fraudulent life settlement act.
29.22 	(c) Release of documents and evidence under paragraph (b) does not abrogate or 
29.23 	modify the privilege granted in paragraph (a).
29.24 		Subd. 6.Other law enforcement or regulatory authority. Sections 60A.957 to 
29.25 	60A.9587 shall not:
29.26 	(1) preempt the authority or relieve the duty of other law enforcement or regulatory 
29.27 	agencies to investigate, examine, and prosecute suspected violations of law;
29.28 	(2) preempt, supersede, or limit any provision of any state securities law or any rule, 
29.29 	order, or notice issued thereunder;
29.30 	(3) prevent or prohibit a person from disclosing voluntarily information concerning 
29.31 	life settlement fraud to a law enforcement or regulatory agency other than the insurance 
29.32 	department; or
29.33 	(4) limit the powers granted elsewhere by the laws of this state to the commissioner 
29.34 	or an insurance fraud unit to investigate and examine possible violations of law and to 
29.35 	take appropriate action against wrongdoers.
30.1 		Subd. 7.Life settlement antifraud initiatives. (a) Providers and brokers shall 
30.2 	have in place antifraud initiatives reasonably calculated to detect, prosecute, and prevent 
30.3 	fraudulent life settlement acts. At the discretion of the commissioner, the commissioner 
30.4 	may order, or a licensee may request and the commissioner may grant, such modifications 
30.5 	of the following required initiatives as necessary to ensure an effective antifraud program. 
30.6 	The modifications may be more or less restrictive than the required initiatives so long as 
30.7 	the modifications may reasonably be expected to accomplish the purpose of this section. 
30.8 	Antifraud initiatives shall include:
30.9 	(1) fraud investigators, who may be provider or broker employees or independent 
30.10 	contractors; and
30.11 	(2) an antifraud plan, which shall be submitted to the commissioner.
30.12 	(b) The antifraud plan shall include, but not be limited to:
30.13 	(1) a description of the procedures for detecting and investigating possible fraudulent 
30.14 	life settlement acts and procedures for resolving material inconsistencies between medical 
30.15 	records and insurance applications;
30.16 	(2) a description of the procedures for reporting possible fraudulent life settlement 
30.17 	acts to the commissioner;
30.18 	(3) a description of the plan for antifraud education and training of underwriters 
30.19 	and other personnel; and
30.20 	(4) a description or chart outlining the organizational arrangement of the antifraud 
30.21 	personnel who are responsible for the investigation and reporting of possible fraudulent 
30.22 	life settlement acts and investigating unresolved material inconsistencies between medical 
30.23 	records and insurance applications.
30.24 	(c) Antifraud plans submitted to the commissioner are privileged and confidential, 
30.25 	are not a public record, and are not subject to discovery or subpoena in a civil or criminal 
30.26 	action.

30.27 	Sec. 15. [60A.9586] PENALTIES.
30.28 	(a) It is a violation of sections 60A.957 to 60A.9587 for any person, provider, 
30.29 	broker, or any other party related to the business of life settlements to commit a fraudulent 
30.30 	life settlement act.
30.31 	(b) For criminal liability purposes, a person that commits a fraudulent life settlement 
30.32 	act is guilty of committing insurance fraud and shall be subject to additional penalties 
30.33 	under sections 60A.951 to 60A.956.
30.34 	(c) The commissioner shall be empowered to levy a civil penalty not exceeding 
30.35 	$1,000 and the amount of the claim for each violation upon any person, including those 
31.1 	persons and their employees licensed pursuant to sections 60A.957 to 60A.9587, who is 
31.2 	found to have committed a fraudulent life settlement act or violated any other provision of 
31.3 	sections 60A.957 to 60A.9587.
31.4 	(d) The license of a person licensed under sections 60A.957 to 60A.9587 that 
31.5 	commits a fraudulent life settlement act shall be revoked for a period of at least one year.

31.6 	Sec. 16. [60A.9587] UNFAIR TRADE PRACTICES.
31.7 	A violation of sections 60A.957 to 60A.9586 shall be considered an unfair trade 
31.8 	practice pursuant to state law and subject to the penalties provided by state law.

31.9 	Sec. 17. EFFECTIVE DATE.
 31.10 	(a) A provider lawfully transacting business in this state prior to the effective date of 
31.11 	this act may continue to do so pending approval or disapproval of that person's application 
31.12 	for a license as long as the application is filed with the commissioner not later than 30 days 
31.13 	after publication by the commissioner of an application form and instructions for licensure 
31.14 	of providers. If the publication of the application form and instructions is prior to the 
31.15 	effective date of this act, then the filing of the application shall not be later than 30 days 
31.16 	after the effective date of this act. During the time that such an application is pending with 
31.17 	the commissioner, the applicant may use any form of life settlement contract that has been 
31.18 	filed with the commissioner pending approval thereof, provided that such form is otherwise 
31.19 	in compliance with the provisions of this act. Any person transacting business in this state 
31.20 	under this provision shall be obligated to comply with all other requirements of this act.
31.21 	(b) A person who has lawfully negotiated life settlement contracts between any 
31.22 	owner residing in this state and one or more providers for at least one year immediately 
31.23 	prior to the effective date of this act may continue to do so pending approval or 
31.24 	disapproval of that person's application for a license as long as the application is filed 
31.25 	with the commissioner not later than 30 days after publication by the commissioner of 
31.26 	an application form and instructions for licensure of brokers. If the publication of the 
31.27 	application form and instructions is prior to the effective date of this chapter, then the 
31.28 	filing of the application shall not be later than 30 days after the effective date of this act. 
31.29 	Any person transacting business in this state under this provision shall be obligated to 
31.30 	comply with all other requirements of this act.

31.31 	Sec. 18.  REPEALER.
 32.1 	Minnesota Statutes 2006, sections 60A.961; 60A.962; 60A.963; 60A.964; 60A.965; 
32.2 	60A.966; 60A.967; 60A.968; 60A.969; 60A.970; 60A.971; 60A.972; 60A.973; and 
32.3 	60A.974, are repealed.

32.4 	Sec. 19. EFFECTIVE DATE.
 32.5 	This act is effective January 1, 2009, and applies to policies issued on or after that 
32.6 	date.