1.1 	A bill for an act
1.2 	relating to insurance; regulating viatical settlements; enacting and modifying 
1.3 	the Viatical Settlements Model Act of the National Association of Insurance 
1.4 	Commissions; providing criminal penalties;amending Minnesota Statutes 2006, 
1.5 	section 60A.964, subdivision 1; proposing coding for new law in Minnesota 
1.6 	Statutes, chapter 60A; repealing Minnesota Statutes 2006, sections 13.716, 
1.7 	subdivision 7; 60A.961; 60A.962; 60A.963; 60A.965; 60A.966; 60A.967; 
1.8 	60A.968; 60A.969; 60A.970; 60A.971; 60A.972; 60A.973; 60A.974.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	Section 1. [60A.957] DEFINITIONS.
1.11 		Subdivision 1.Terms. For purposes of sections 60A.957 to 60A.9585, the terms 
1.12 	defined in this section have the meanings given them.
1.13 		Subd. 2.Advertising. "Advertising" 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 	directly before the public in this state, for the purpose of creating an interest in or inducing 
1.18 	a person to purchase or sell, assign, devise, bequeath, or transfer the death benefit or 
1.19 	ownership of a life insurance policy pursuant to a viatical settlement contract.
1.20 		Subd. 3.Business of viatical settlements. "Business of viatical settlements" means 
1.21 	an activity involved in, but not limited to, the offering, soliciting, negotiating, procuring, 
1.22 	effectuating, purchasing, investing, financing, monitoring, tracking, underwriting, selling, 
1.23 	transferring, assigning, pledging, hypothecating, or in any other manner acquiring an 
1.24 	interest in a life insurance policy by means of a viatical settlement contract.
1.25 		Subd. 4.Chronically ill. "Chronically ill" means:
2.1 	(1) being unable to perform at least two activities of daily living (for example, 
2.2 	eating, toileting, transferring, bathing, dressing, or continence);
2.3 	(2) requiring substantial supervision to protect the individual from threats to health 
2.4 	and safety due to severe cognitive impairment; or
2.5 	(3) having a level of disability similar to that described in paragraph (1) as 
2.6 	determined by the secretary of health and human services;
2.7 		Subd. 5.Commissioner. "Commissioner" means the commissioner of commerce.
2.8 		Subd. 6.Financing entity. "Financing entity" means an underwriter, placement 
2.9 	agent, lender, purchaser of securities, purchaser of a policy or certificate from a viatical 
2.10 	settlement provider, credit enhancer, or any entity that has a direct ownership in a policy 
2.11 	or certificate that is the subject of a viatical settlement contract, but:
2.12 	(1) whose principal activity related to the transaction is providing funds to effect the 
2.13 	viatical settlement or purchase of one or more viaticated policies; and
2.14 	(2) who has an agreement in writing with one or more licensed viatical settlement 
2.15 	providers to finance the acquisition of viatical settlement contracts.
2.16 	The term does not include a nonaccredited investor or a viatical settlement purchaser.
2.17 		Subd. 7.Fraudulent viatical settlement act. "Fraudulent viatical settlement act" 
2.18 	includes:
2.19 	(a) acts or omissions committed by any person who, knowingly or with intent to 
2.20 	defraud, for the purpose of depriving another of property or for pecuniary gain, commits, 
2.21 	or permits its employees or its agents to engage in acts including:
2.22 	(1) presenting, causing to be presented or preparing with knowledge or belief that 
2.23 	it will be presented to or by a viatical settlement provider, viatical settlement broker, 
2.24 	viatical settlement purchaser, viatical settlement investment agent, financing entity, 
2.25 	insurer, insurance producer, or any other person, false material information, or concealing 
2.26 	material information, as part of, in support of, or concerning a fact material to one or 
2.27 	more of the following:
2.28 	(i) an application for the issuance of a viatical settlement contract or insurance policy;
2.29 	(ii) the underwriting of a viatical settlement contract or insurance policy;
2.30 	(iii) a claim for payment or benefit pursuant to a viatical settlement contract or 
2.31 	insurance policy;
2.32 	(iv) premiums paid on an insurance policy or as a result of a viatical settlement 
2.33 	purchase agreement;
2.34 	(v) payments and changes in ownership or beneficiary made in accordance with 
2.35 	the terms of a viatical settlement contract, viatical settlement purchase agreement, or 
2.36 	insurance policy;
3.1 	(vi) the reinstatement or conversion of an insurance policy;
3.2 	(vii) in the solicitation, offer, effectuation, or sale of a viatical settlement contract, 
3.3 	insurance policy, or viatical settlement purchase agreement;
3.4 	(viii) the issuance of written evidence of viatical settlement contract, viatical 
3.5 	settlement purchase agreement, or insurance; or
3.6 	(ix) a financing transaction;
3.7 	(2) employing any plan, financial structure, device, scheme, or artifice to defraud 
3.8 	related to viaticated policies;
3.9 	(3) entering into any practice or plan which involves stranger-originated life 
3.10 	insurance; and
3.11 	(4) failing to disclose to the insurer when requested by the insurer that the prospective 
3.12 	insured has undergone a life expectancy evaluation by any person or entity other than the 
3.13 	insurer or its authorized representatives in connection with the issuance of the policy;
3.14 	(b) in the furtherance of a fraud or to prevent the detection of a fraud any person 
3.15 	commits or permits its employees or its agents to:
3.16 	(1) remove, conceal, alter, destroy, or sequester from the commissioner the assets or 
3.17 	records of a licensee or other person engaged in the business of viatical settlements;
3.18 	(2) misrepresent or conceal the financial condition of a licensee, financing entity, 
3.19 	insurer, or other person;
3.20 	(3) transact the business of viatical settlements in violation of laws requiring a 
3.21 	license, certificate of authority, or other legal authority for the transaction of the business 
3.22 	of viatical settlements; or
3.23 	(4) file with the commissioner or the equivalent chief insurance regulatory official 
3.24 	of another jurisdiction a document containing false information or otherwise conceal 
3.25 	information about a material fact from the commissioner;
3.26 	(c) embezzlement, theft, misappropriation, or conversion of money, funds, 
3.27 	premiums, credits, or other property of a viatical settlement provider, insurer, viator, 
3.28 	insurance policyowner, or any other person engaged in the business of viatical settlements 
3.29 	or insurance;
3.30 	(d) recklessly entering into, negotiating, brokering, otherwise dealing in a viatical 
3.31 	settlement contract, the subject of which is a life insurance policy that was obtained by 
3.32 	presenting false information concerning any fact material to the policy or by concealing, 
3.33 	for the purpose of misleading another, information concerning any fact material to the 
3.34 	policy, where the person or the persons intended to defraud the policy's issuer, the 
3.35 	viatical settlement provider, or the viator. "Recklessly" means engaging in the conduct in 
3.36 	conscious and clearly unjustifiable disregard of a substantial likelihood of the existence 
4.1 	of the relevant facts or risks; such disregard involving a gross deviation from acceptable 
4.2 	standards of conduct;
4.3 	(e) facilitating the change of state of ownership of a policy or certificate or the state 
4.4 	of residency of a viator to a state or jurisdiction that does not have a law similar to sections 
4.5 	60A.957 to 60A.9585 for the express purposes of evading or avoiding the provisions of 
4.6 	sections 60A.957 to 60A.9585; or
4.7 	(f) attempting to commit, assisting, aiding, or abetting in the commission of, or 
4.8 	conspiracy to commit, the acts or omissions specified in this subdivision.
4.9 		Subd. 8.Life insurance producer. "Life insurance producer" means any person 
4.10 	licensed in this state as a resident or nonresident insurance producer who has received 
4.11 	qualification or authority for life insurance coverage or a life line of coverage pursuant to 
4.12 	chapter 60K.
4.13 		Subd. 9.Person. "Person" means a natural person or a legal entity, including, 
4.14 	without limitation, an individual, partnership, limited liability company, association, 
4.15 	trust, or corporation.
4.16 		Subd. 10.Policy. "Policy" means an individual or group policy, group certificate, 
4.17 	contract, or arrangement of life insurance owned by a resident of this state, regardless of 
4.18 	whether delivered or issued for delivery in this state.
4.19 		Subd. 11.Related provider trust. "Related provider trust" means a titling trust or 
4.20 	other trust established by a licensed viatical settlement provider or a financing entity for 
4.21 	the sole purpose of holding the ownership or beneficial interest in purchased policies in 
4.22 	connection with a financing transaction. The trust shall have a written agreement with the 
4.23 	licensed viatical settlement provider under which the licensed viatical settlement provider 
4.24 	is responsible for ensuring compliance with all statutory and regulatory requirements and 
4.25 	under which the trust agrees to make all records and files related to viatical settlement 
4.26 	transactions available to the commissioner as if those records and files were maintained 
4.27 	directly by the licensed viatical settlement provider.
4.28 		Subd. 12.Special purpose entity. "Special purpose entity" means a corporation, 
4.29 	partnership, trust, limited liability company, or other similar entity formed solely to 
4.30 	provide either directly or indirectly access to institutional capital markets:
4.31 	(1) for a financing entity or licensed viatical settlement provider; or
4.32 	(2)(i) in connection with a transaction in which the securities in the special purposes 
4.33 	entity are acquired by the viator or by "qualified institutional buyers" as defined in Rule 
4.34 	144 promulgated under the Securities Act of 1933, as amended; or
4.35 	(ii) the securities pay a fixed rate of return commensurate with established 
4.36 	asset-backed institutional capital markets.
5.1 		Subd. 13.Stranger-originated life insurance; STOLI. "Stranger-originated life 
5.2 	insurance" or "STOLI," means a practice or a plan to initiate a life insurance policy for the 
5.3 	benefit of a third-party investor who, at the time of policy origination, has no insurable 
5.4 	interest in the insured. STOLI practices include but are not limited to cases in which 
5.5 	life insurance is purchased with resources or guarantees from or through a person or 
5.6 	entity who at the time of policy inception could not lawfully initiate the policy himself or 
5.7 	itself, and where, at the time of policy inception, there is an arrangement or agreement, 
5.8 	whether verbal or written, to directly or indirectly transfer either or both the ownership 
5.9 	of the policy and the policy benefits to a third party. Trusts that are created to give the 
5.10 	appearance of insurable interest, and are used to initiate policies for investors, violate 
5.11 	insurable interest laws and the prohibition against wagering on life. STOLI arrangements 
5.12 	do not include those practices set forth in subdivision 16, paragraph (c).
5.13 		Subd. 14.Terminally ill. "Terminally ill" means having an illness or sickness that 
5.14 	can reasonably be expected to result in death in 24 months or less.
5.15 		Subd. 15.Viatical settlement broker. "Viatical settlement broker" means a 
5.16 	person, including a life insurance producer as provided for in section 60A.9572, who, 
5.17 	working exclusively on behalf of a viator and for a fee, commission, or other valuable 
5.18 	consideration, offers or attempts to negotiate viatical settlement contracts between a viator 
5.19 	and one or more viatical settlement providers or one or more viatical settlement brokers. 
5.20 	Notwithstanding the manner in which the viatical settlement broker is compensated, a 
5.21 	viatical settlement broker is deemed to represent only the viator, and not the insurer or 
5.22 	the viatical settlement provider, and owes a fiduciary duty to the viator to act according 
5.23 	to the viator's instructions and in the best interest of the viator. The term does not 
5.24 	include an attorney, certified public accountant, or a financial planner accredited by a 
5.25 	nationally recognized accreditation agency, who is retained to represent the viator and 
5.26 	whose compensation is not paid directly or indirectly by the viatical settlement provider 
5.27 	or purchaser.
5.28 		Subd. 16.Viatical settlement contract. (a) "Viatical settlement contract" means 
5.29 	a written agreement between a viator and a viatical settlement provider or any affiliate 
5.30 	of the viatical settlement provider establishing the terms under which compensation or 
5.31 	anything of value is or will be paid, which compensation or value is less than the expected 
5.32 	death benefits of the policy, in return for the viator's present or future assignment, transfer, 
5.33 	sale, devise, or bequest of the death benefit or ownership of any portion of the insurance 
5.34 	policy or certificate of insurance. "Viatical settlement contract" also includes the transfer 
5.35 	for compensation or value of ownership or beneficial interest in a trust or other entity that 
5.36 	owns such a policy if the trust or other entity was formed or availed of for the principal 
6.1 	purpose of acquiring one or more life insurance contracts, which life insurance contract 
6.2 	insures the life of a person residing in this state.
6.3 	(b) Viatical settlement contract includes a premium finance loan made for a life 
6.4 	insurance policy by a lender to a viator on, before, or after the date of issuance of the 
6.5 	policy where:
6.6 	(1) the viator or the insured receives on the date of the premium finance loan a 
6.7 	guarantee of a future viatical settlement value of the policy; or
6.8 	(2) the viator or the insured agrees on the date of the premium finance loan to sell the 
6.9 	policy or any portion of its death benefit on any date following the issuance of the policy.
6.10 	(c) Viatical settlement contract does not include:
6.11 	(1) a policy loan or accelerated death benefit made by the insurer pursuant to the 
6.12 	policy's terms;
6.13 	(2) loan proceeds that are used solely to pay:
6.14 	(i) premiums for the policy; and
6.15 	(ii) the costs of the loan, including, without limitation, interest, arrangement fees, 
6.16 	utilization fees and similar fees, closing costs, legal fees and expenses, trustee fees and 
6.17 	expenses, and third party collateral provider fees and expenses, including fees payable 
6.18 	to letter of credit issuers;
6.19 	(3) a loan made by a bank or other licensed financial institution in which the lender 
6.20 	takes an interest in a life insurance policy solely to secure repayment of a loan or, if there 
6.21 	is a default on the loan and the policy is transferred, the transfer of such a policy by the 
6.22 	lender, provided that neither the default itself nor the transfer of the policy in connection 
6.23 	with the default is pursuant to an agreement;
6.24 	(4) a loan made by a lender that does not violate chapter 59A, provided that the 
6.25 	premium finance loan is not described in clause (3);
6.26 	(5) an agreement where all the parties (i) are closely related to the insured by blood 
6.27 	or law or (ii) have a lawful substantial economic interest in the continued life, health, and 
6.28 	bodily safety of the person insured, or are trusts established primarily for the benefit 
6.29 	of such parties;
6.30 	(6) any designation, consent, or agreement by an insured who is an employee of an 
6.31 	employer in connection with the purchase by the employer, or trust established by the 
6.32 	employer, of life insurance on the life of the employee;
6.33 	(7) a bona fide business succession planning arrangement:
6.34 	(i) between one or more shareholders in a corporation or between a corporation and 
6.35 	one or more of its shareholders or one or more trusts established by its shareholders;
7.1 	(ii) between one or more partners in a partnership or between a partnership and one 
7.2 	or more of its partners or one or more trusts established by its partners; or
7.3 	(iii) between one or more members in a limited liability company or between a 
7.4 	limited liability company and one or more of its members or one or more trusts established 
7.5 	by its members;
7.6 	(8) an agreement entered into by a service recipient, or a trust established by the 
7.7 	service recipient, and a service provider, or a trust established by the service provider, who 
7.8 	performs significant services for the service recipient's trade or business; or
7.9 	(9) any other contract, transaction, or arrangement exempted from the definition 
7.10 	of viatical settlement contract by the commissioner based on a determination that the 
7.11 	contract, transaction, or arrangement is not of the type intended to be regulated by sections 
7.12 	60A.957 to 60A.9585.
7.13 		Subd. 17.Viatical settlement investment agent. (a) "Viatical settlement 
7.14 	investment agent" means a person who is an appointed or contracted agent of a licensed 
7.15 	viatical settlement provider who solicits or arranges the funding for the purchase of a 
7.16 	viatical settlement by a viatical settlement purchaser and who is acting on behalf of a 
7.17 	viatical settlement provider.
7.18 	(b) A viatical settlement investment agent shall not have any contact directly or 
7.19 	indirectly with the viator or insured or have knowledge of the identity of the viator 
7.20 	or insured.
7.21 	(c) A viatical settlement investment agent is deemed to represent the viatical 
7.22 	settlement provider of whom the viatical settlement investment agent is an appointed 
7.23 	or contracted agent.
7.24 		Subd. 18.Viatical settlement provider. (a) "Viatical settlement provider" means 
7.25 	a person, other than a viator, that enters into or effectuates a viatical settlement contract 
7.26 	with a viator resident in this state.
7.27 	(b) Viatical settlement provider does not include:
7.28 	(1) a bank, savings bank, savings and loan association, credit union, other licensed 
7.29 	lending institution, or premium financing company making premium finance loans and 
7.30 	exempted by the commissioner from the licensing requirement under the premium finance 
7.31 	laws, that takes an assignment of a life insurance policy solely as a collateral for a loan;
7.32 	(2) a premium finance company making premium finance loans and exempted by the 
7.33 	commissioner from the licensing requirement under the premium finance laws that takes 
7.34 	an assignment of a life insurance policy solely as collateral for a loan;
7.35 	(3) the issuer of the life insurance policy;
8.1 	(4) an authorized or eligible insurer that provides stop-loss coverage or financial 
8.2 	guaranty insurance to a viatical settlement provider, purchaser, financing entity, special 
8.3 	purpose entity, or related provider trust;
8.4 	(5) a natural person who enters into or effectuates no more than one agreement in a 
8.5 	calendar year for the transfer of life insurance policies for any value less than the expected 
8.6 	death benefit;
8.7 	(6) a financing entity;
8.8 	(7) a special purpose entity;
8.9 	(8) a related provider trust;
8.10 	(9) a viatical settlement purchaser; or
8.11 	(10) any other person that the commissioner determines is not the type of person 
8.12 	intended to be covered by the definition of viatical settlement provider.
8.13 		Subd. 19.Viatical settlement purchase agreement. "Viatical settlement purchase 
8.14 	agreement" means a contract or agreement, entered into by a viatical settlement purchaser, 
8.15 	to which the viator is not a party, to purchase a life insurance policy or an interest in a life 
8.16 	insurance policy, that is entered into for the purpose of deriving an economic benefit.
8.17 		Subd. 20.Viatical settlement purchaser. (a) "Viatical settlement purchaser" means 
8.18 	a person who provides a sum of money as consideration for a life insurance policy or an 
8.19 	interest in the death benefits of a life insurance policy, or a person who owns or acquires or 
8.20 	is entitled to a beneficial interest in a trust that owns a viatical settlement contract or is 
8.21 	the beneficiary of a life insurance policy that has been or will be the subject of a viatical 
8.22 	settlement contract, for the purpose of deriving an economic benefit.
8.23 	(b) Viatical settlement purchaser does not include:
8.24 	(1) a licensee under sections 60A.957 to 60A.9585;
8.25 	(2) an accredited investor or qualified institutional buyer as defined, respectively, 
8.26 	in Rule 501(a) or Rule 144A promulgated under the Federal Securities Act of 1933, as 
8.27 	amended;
8.28 	(3) a financing entity;
8.29 	(4) a special purpose entity; or
8.30 	(5) a related provider trust.
8.31 		Subd. 21.Viaticated policy. "Viaticated policy" means a life insurance policy or 
8.32 	certificate that has been acquired by a viatical settlement provider pursuant to a viatical 
8.33 	settlement contract.
8.34 		Subd. 22.Viator. (a) "Viator" means the owner of a life insurance policy or a 
8.35 	certificate holder under a group policy who resides in this state and enters or seeks to 
8.36 	enter into a viatical settlement contract. For purposes of sections 60A.957 to 60A.9585, 
9.1 	a viator shall not be limited to an owner of a life insurance policy or a certificate holder 
9.2 	under a group policy insuring the life of an individual with a terminal or chronic illness or 
9.3 	condition except where specifically addressed. If there is more than one viator on a single 
9.4 	policy and the viators are residents of different states, the transaction shall be governed by 
9.5 	the law of the state in which the viator having the largest percentage ownership resides or, 
9.6 	if the viators hold equal ownership, the state of residence of one viator agreed upon in 
9.7 	writing by all the viators.
9.8 	(b) Viator does not include:
9.9 	(1) a license under this Act, including a life insurance producer acting as a viatical 
9.10 	settlement broker pursuant to sections 60A.957 to 60A.9585;
9.11 	(2) a qualified institutional buyer as defined, respectively, in Rule 144A promulgated 
9.12 	under the Federal Securities Act of 1933, as amended;
9.13 	(3) a financing entity;
9.14 	(4) a special purpose entity; or
9.15 	(5) a related provider trust.

9.16 	Sec. 2. [60A.9572] LICENSE AND BOND REQUIREMENTS.
9.17 		Subdivision 1.Provider or broker license required. A person shall not operate as 
9.18 	a viatical settlement provider or viatical settlement broker without first obtaining a license 
9.19 	from the commissioner of the state of residence of the viator.
9.20 		Subd. 2.Agent license required. A person shall not operate as a viatical settlement 
9.21 	investment agent without first obtaining a license from the commissioner of the state of 
9.22 	residence of the viatical settlement purchaser. If there is more than one purchaser of a 
9.23 	single policy and the purchasers are residents of different states, the viatical settlement 
9.24 	purchase agreement shall be governed by the law of the state in which the purchaser 
9.25 	having the largest percentage ownership resides or, if the purchasers hold equal ownership, 
9.26 	the state of residence of one purchaser agreed upon in writing by all purchasers.
9.27 		Subd. 3.Life insurance provider. (a) A life insurance provider who has been duly 
9.28 	licensed as a resident insurance producer with a life line of authority in this state or his or 
9.29 	her home state for at least one year and is licensed as a nonresident producer in this state 
9.30 	shall be deemed to meet the licensing requirements of this section and shall be permitted 
9.31 	to operate as a viatical settlement broker.
9.32 	(b) Not later than 30 days from the first day of operating as a viatical settlement 
9.33 	broker, the life insurance producer shall notify the commissioner that he or she is acting 
9.34 	as a viatical settlement broker on a form prescribed by the commissioner, and shall pay 
9.35 	any applicable fee to be determined by the commissioner. Notification shall include an 
10.1 	acknowledgment by the life insurance producer that he or she will operate as a viatical 
10.2 	settlement broker in accordance with sections 60A.957 to 60A.9585.
10.3 	(c) The insurer that issued the policy being viaticated shall not be responsible 
10.4 	for any act or omission of a viatical settlement broker or viatical settlement provider 
10.5 	arising out of or in connection with the viatical settlement transaction, unless the insurer 
10.6 	receives compensation for the placement of a viatical settlement contract from the viatical 
10.7 	settlement provider or viatical settlement broker in connection with the viatical settlement 
10.8 	contract.
10.9 	(d) A person licensed as an attorney, certified public accountant, or financial planner 
10.10 	accredited by a nationally recognized accreditation agency, who is retained to represent 
10.11 	the viator, whose compensation is not paid directly or indirectly by the viatical settlement 
10.12 	provider, may negotiate viatical settlement contracts on behalf of the viator without having 
10.13 	to obtain a license as a viatical settlement broker.
10.14 		Subd. 4.Application. Application for a viatical settlement provider, viatical 
10.15 	settlement broker, or viatical settlement investment agent license shall be made to the 
10.16 	commissioner by the applicant on a form prescribed by the commissioner, and these 
10.17 	applications shall be accompanied by the fees specified in section 60A.964.
10.18 		Subd. 5.Renewals. Licenses may be renewed from year to year on the anniversary 
10.19 	date upon payment of the annual renewal fees specified in section 60A.964. Failure to pay 
10.20 	the fees by the renewal date results in expiration of the license.
10.21 		Subd. 6.Disclosures. The applicant shall provide information on forms required 
10.22 	by the commissioner. The commissioner shall have authority, at any time, to require the 
10.23 	applicant to fully disclose the identity of all stockholders, partners, officers, members, and 
10.24 	employees, and the commissioner may, in the exercise of the commissioner's discretion, 
10.25 	refuse to issue a license in the name of a legal entity if not satisfied that any officer, 
10.26 	employee, stockholder, partner, or member thereof who may materially influence the 
10.27 	applicant's conduct meets the standards of sections 60A.957 to 60A.9585.
10.28 		Subd. 7.Legal entity license. A license issued to a legal entity authorizes all 
10.29 	partners, officers, members, and designated employees to act as viatical settlement 
10.30 	providers, viatical settlement brokers, or viatical settlement investment agents, as 
10.31 	applicable, under the license, and all those persons shall be named in the application 
10.32 	and any supplements to the application.
10.33 		Subd. 8.Investigation. (a) Upon the filing of an application and the payment of the 
10.34 	license fee, the commissioner shall make an investigation of each applicant and issue a 
10.35 	license if the commissioner finds that the applicant:
10.36 	(1) if a viatical settlement provider, has provided a detailed plan of operation;
11.1 	(2) is competent and trustworthy and intends to act in good faith in the capacity 
11.2 	involved by the license applied for;
11.3 	(3) has a good business reputation and has had experience, training, or education so 
11.4 	as to be qualified in the business for which the license is applied for;
11.5 	(4)(i) if a viatical settlement provider, has demonstrated evidence of financial 
11.6 	responsibility in a format prescribed by the commissioner through either a surety bond 
11.7 	executed and issued by an insurer authorized to issue surety bonds in this state or a deposit 
11.8 	of cash, certificates of deposit, or securities or any combination thereof in the amount of 
11.9 	$250,000; and
11.10 	(ii) if a viatical settlement broker, has demonstrated evidence of financial 
11.11 	responsibility in a format prescribed by the commissioner through either a surety bond 
11.12 	executed and issued by an insurer authorized to issue surety bonds in this state or a deposit 
11.13 	of cash, certificates of deposit, or securities or any combination thereof in the amount of 
11.14 	$250,000.  The commissioner shall accept, as evidence of financial responsibility, proof 
11.15 	that financial instruments in accordance with the requirements in this paragraph have 
11.16 	been filed with one or more states where the applicant is licensed as a viatical settlement 
11.17 	provider or viatical settlement broker.  The commissioner may ask for evidence of financial 
11.18 	responsibility at any time the commissioner deems necessary. Any surety bond issued 
11.19 	pursuant to this paragraph shall be in the favor of this state and shall specifically authorize 
11.20 	recovery by the commission on behalf of any person in this state who sustained damages 
11.21 	as the result of erroneous acts, failure to act, conviction of fraud, or conviction of unfair 
11.22 	practices by the viatical settlement provider or viatical settlement broker;
11.23 	(5) if a legal entity, provides a certificate of good standing from the state of its 
11.24 	domicile; and
11.25 	(6) if a viatical settlement provider or viatical settlement broker, has provided an 
11.26 	antifraud plan that meets the requirements of section 60A.9583.
11.27 	(b) Notwithstanding any provision of this section to the contrary, the commissioner 
11.28 	shall accept, as evidence of financial responsibility, proof that financial instruments in 
11.29 	accordance with the requirements in paragraph (a), clause (4), have been filed with one 
11.30 	state where the applicant is licensed as a viatical settlement provider or viatical settlement 
11.31 	broker.
11.32 		Subd. 9.Consent to service of process. The commissioner shall not issue a 
11.33 	license to a nonresident applicant, unless a written designation of an agent for service of 
11.34 	process is filed and maintained with the commissioner or the applicant has filed with 
11.35 	the commissioner, the applicant's written irrevocable consent that any action against 
12.1 	the applicant may be commenced against the applicant by service of process on the 
12.2 	commissioner.
12.3 		Subd. 10.Duty to supplement information. A viatical settlement provider, 
12.4 	viatical settlement broker, or viatical settlement investment agent shall provide to the 
12.5 	commissioner new or revised information about officers, ten percent or more stockholders, 
12.6 	partners, directors, members, or designated employees within 30 days of the change.
12.7 		Subd. 11.Training required. An individual licensed as a viatical settlement broker 
12.8 	shall complete on a biennial basis 15 hours of training related to viatical settlements and 
12.9 	viatical settlement transactions, as required by the commissioner; provided, however, 
12.10 	that a life insurance producer who is operating as a viatical settlement broker pursuant 
12.11 	to subdivision 3 shall not be subject to the requirements of this subdivision. Any person 
12.12 	failing to meet the requirements of this subdivision is subject to the penalties imposed by 
12.13 	the commissioner.

12.14 	Sec. 3. [60A.9573] LICENSE REVOCATION AND DENIAL.
12.15 		Subdivision 1.Grounds. The commissioner may refuse to issue, suspend, revoke, 
12.16 	or refuse to renew the license of a viatical settlement provider, viatical settlement broker, 
12.17 	or viatical settlement investment agent if the commissioner finds that:
12.18 	(1) there was any material misrepresentation in the application for the license;
12.19 	(2) the licensee or any officer, partner, member, or key management personnel has 
12.20 	been convicted of fraudulent or dishonest practices, is subject to a final administrative 
12.21 	action or is otherwise shown to be untrustworthy or incompetent;
12.22 	(3) the viatical settlement provider demonstrates a pattern of unreasonable payments 
12.23 	to viators;
12.24 	(4) the licensee or any officer, partner, member, or key management personnel 
12.25 	has been found guilty of, or has pleaded guilty or nolo contendere to, any felony, or to 
12.26 	a misdemeanor involving fraud or moral turpitude, regardless of whether a judgment of 
12.27 	conviction has been entered by the court;
12.28 	(5) the viatical settlement provider has entered into any viatical settlement contract 
12.29 	that has not been approved pursuant to sections 60A.957 to 60A.9585;
12.30 	(6) the viatical settlement provider has failed to honor contractual obligations set out 
12.31 	in a viatical settlement contract or a viatical settlement purchase agreement;
12.32 	(7) the licensee no longer meets the requirements for initial licensure;
12.33 	(8) the viatical settlement provider has assigned, transferred, or pledged a viaticated 
12.34 	policy to a person other than a viatical settlement provider licensed in this state, viatical 
12.35 	settlement purchaser, an accredited investor, or qualified institutional buyer as defined 
13.1 	respectively in Rule 501(a) or Rule 144A promulgated under the Federal Securities Act of 
13.2 	1933, as amended, financing entity, special purpose entity, or related provider trust; or
13.3 	(9) the licensee or any officer, partner, member, or key management personnel has 
13.4 	violated any provision of sections 60A.957 to 60A.9585.
13.5 		Subd. 2.Bad faith by broker or producer. The commissioner may suspend, 
13.6 	revoke, or refuse to renew the license of a viatical settlement broker or a life insurance 
13.7 	producer operating as a viatical settlement broker pursuant to sections 60A.957 to 
13.8 	60A.9585 if the commissioner finds that the viatical settlement broker or life insurance 
13.9 	producer has violated the provisions of sections 60A.957 to 60A.9585 or has otherwise 
13.10 	engaged in bad faith conduct with one or more viators.
13.11 		Subd. 3.License enforcement actions. Section 45.027 applies to any action 
13.12 	taken by the commissioner to deny a license application or suspend, revoke, or refuse to 
13.13 	renew the license of a viatical settlement provider, viatical settlement broker, or viatical 
13.14 	settlement investment agent, or suspend, revoke, or refuse to renew a license of a life 
13.15 	insurance producer operating as a viatical settlement broker pursuant to sections 60A.957 
13.16 	to 60A.9585.

13.17 	Sec. 4. [60A.9574] APPROVAL OF VIATICAL SETTLEMENT CONTRACTS 
13.18 	AND DISCLOSURE STATEMENTS.
13.19 	A person shall not use a viatical settlement contract form or provide to a viator 
13.20 	a disclosure statement form in this state unless first filed with and approved by the 
13.21 	commissioner. The commissioner shall disapprove a viatical settlement contract form or 
13.22 	disclosure statement form if, in the commissioner's opinion, the contract or provisions 
13.23 	contained therein fail to meet the requirements of sections 60A.6577, 60A.9579, 
13.24 	60A.9582, and 60A.9583, subdivision 2, or are unreasonable, contrary to the interests 
13.25 	of the public, or otherwise misleading or unfair to the viator. At the commissioner's 
13.26 	discretion, the commissioner may require the submission of advertising material.

13.27 	Sec. 5. [60A.9575] REPORTING REQUIREMENTS AND PRIVACY.
13.28 		Subdivision 1.Annual statement. Each viatical settlement provider shall file with 
13.29 	the commissioner on or before March 1 of each year an annual statement containing 
13.30 	the following information:
13.31 	(1) for each policy viaticated, the date that the viatical settlement was entered into; 
13.32 	the life expectancy of the viator at the time of the contract; the face amount of the policy; 
13.33 	the amount paid by the viatical settlement provider to viaticate the policy; and if the viator 
14.1 	has died, the date of death and the total insurance premiums paid by the viatical settlement 
14.2 	provider to maintain the policy in force;
14.3 	(2) a breakdown by disease category of applications received, accepted, and rejected;
14.4 	(3) a breakdown of policies viaticated by issuer and policy type;
14.5 	(4) the number of secondary market versus primary market transactions;
14.6 	(5) the portfolio size; and
14.7 	(6) the amount of outside borrowings.
14.8 	The information shall be limited to only those transactions where the viator is 
14.9 	a resident of this state. Individual transaction data regarding the business of viatical 
14.10 	settlements or data that could compromise the privacy of personal, financial, and health 
14.11 	information of the viator or insured shall be filed with the commissioner on a confidential 
14.12 	basis.
14.13 		Subd. 2.Identity disclosure restrictions. Except as otherwise allowed or required 
14.14 	by law, a viatical settlement provider, viatical settlement broker, or viatical settlement 
14.15 	investment agent, insurance company, insurance producer, information bureau, rating 
14.16 	agency or company, or any other person with actual knowledge of an insured's identity, 
14.17 	shall not disclose that identity as an insured, or the insured's financial or medical 
14.18 	information to any other person unless the disclosure:
14.19 	(1) is necessary to effect a viatical settlement between the viator and a viatical 
14.20 	settlement provider and the viator and insured have provided prior written consent to 
14.21 	the disclosure;
14.22 	(2) is necessary to effect a viatical settlement purchase agreement between the 
14.23 	viatical settlement purchaser and a viatical settlement provider and the viator and insured 
14.24 	have provided prior written consent to the disclosure;
14.25 	(3) is provided in response to an investigation or examination by the commissioner 
14.26 	or any other governmental officer or agency or pursuant to the requirements of section .......
14.27 	(4) is a term of or condition to the transfer of a policy by one viatical settlement 
14.28 	provider to another viatical settlement provider;
14.29 	(5) is necessary to permit a financing entity, related provider trust, or special purpose 
14.30 	entity to finance the purchase of policies by a viatical settlement provider and the viator 
14.31 	and insured have provided prior written consent to the disclosure;
14.32 	(6) is necessary to allow the viatical settlement provider or viatical settlement broker 
14.33 	or their authorized representatives to make contacts for the purpose of determining health 
14.34 	status; or
14.35 	(7) is required to purchase stop-loss coverage or financial guaranty insurance.

15.1 	Sec. 6. [60A.9576] EXAMINATION OR INVESTIGATIONS.
15.2 		Subdivision 1.Authority, scope, and scheduling of examinations. (a) The 
15.3 	commissioner may conduct an examination under this act of a licensee as often as the 
15.4 	commissioner in his or her discretion deems appropriate after considering the factors set 
15.5 	forth in this paragraph. Any examination must be conducted pursuant to section 60A.031.
15.6 	(b) In scheduling and determining the nature, scope, and frequency of the 
15.7 	examinations, the commissioner shall consider such matters as the consumer complaints, 
15.8 	results of financial statement analyses and ratios, changes in management or ownership, 
15.9 	actuarial opinions, report of independent certified public accountants, and other relevant 
15.10 	criteria as determined by the commissioner.
15.11 	(c) For purposes of completing an examination of a licensee under this act, the 
15.12 	commissioner may examine or investigate any person, or the business of any person, in 
15.13 	so far as the examination or investigation is, in the sole discretion of the commissioner, 
15.14 	necessary or material to the examination of the licensee.
15.15 	(d) In lieu of an examination under this act of any foreign or alien licensee 
15.16 	licensed in this state, the commissioner may, at the commissioner's discretion, accept an 
15.17 	examination report on the licensee as prepared by the commissioner for the licensee's state 
15.18 	of domicile or port-of-entry state.
15.19 	(e) As far as practical, the examination of a foreign or alien licensee shall be made in 
15.20 	cooperation with the insurance supervisory officials of other states in which the licensee 
15.21 	transacts business.
15.22 		Subd. 2.Record retention requirements. (a) A person required to be licensed by 
15.23 	sections 60A.957 to 60A.9585 shall for five years retain copies of all:
15.24 	(1) proposed, offered or executed contracts, purchase agreements, underwriting 
15.25 	documents, policy forms, and applications from the date of the proposal, offer, or 
15.26 	execution of the contract or purchase agreement, whichever is later;
15.27 	(2) all checks, drafts, or other evidence and documentation related to the payment, 
15.28 	transfer, deposit, or release of funds from the date the transaction; and
15.29 	(3) all other records and documents related to the requirements of sections ... to ....
15.30 	(b) This section does not relieve a person of the obligation to produce these 
15.31 	documents to the commissioner after the retention period has expired if the person has 
15.32 	retained the documents.
15.33 	(c) Records required to be retained by this section must be legible and complete and 
15.34 	may be retained in paper, photograph, microprocess, magnetic, mechanical, or electronic 
15.35 	media, or by any process that accurately reproduces or forms a durable medium for the 
15.36 	reproduction of a record.
16.1 		Subd. 3Investigative authority of commissioner. The commissioner may 
16.2 	investigate suspected fraudulent viatical settlement acts and persons engaged in the 
16.3 	business of viatical settlements.

16.4 	Sec. 7. [60A.9577] DISCLOSURE TO VIATOR.
16.5 		Subdivision 1.Application disclosures by provider and broker. With each 
16.6 	application for a viatical settlement, a viatical settlement provider or viatical settlement 
16.7 	broker shall provide the viator with at least the following disclosures no later than the 
16.8 	time the application for the viatical settlement contract is signed by all parties. The 
16.9 	disclosures shall be provided in a separate document that is signed by the viator and the 
16.10 	viatical settlement provider or viatical settlement broker, and shall provide the following 
16.11 	information:
16.12 	(1) there are possible alternatives to viatical settlement contracts including any 
16.13 	accelerated death benefits or policy loans offered under the viator's life insurance policy;
16.14 	(2) that a viatical settlement broker represents exclusively the viator, and not the 
16.15 	insurer or the viatical settlement provider, and owes a fiduciary duty to the viator, including 
16.16 	a duty to act according to the viator's instructions and in the best interest of the viator;
16.17 	(3) some or all of the proceeds of the viatical settlement may be taxable under 
16.18 	federal income tax and state franchise and income taxes, and assistance should be sought 
16.19 	from a professional tax advisor;
16.20 	(4) proceeds of the viatical settlement could be subject to the claims of creditors;
16.21 	(5) receipt of the proceeds of a viatical settlement may adversely affect the viator's 
16.22 	eligibility for Medicaid or other government benefits or entitlements, and advice should 
16.23 	be obtained from the appropriate government agencies;
16.24 	(6) the viator has the right to rescind a viatical settlement contract before the earlier 
16.25 	of 60 calendar days after the date upon which the viatical settlement contract is executed 
16.26 	by all parties or 30 calendar days after the viatical settlement proceeds have been paid to 
16.27 	the viator, as provided in section 60A.9578, subdivision 6. Rescission, if exercised by 
16.28 	the viator, is effective only if both notice of the rescission is given, and the viator repays 
16.29 	all proceeds and any premiums, loans, and loan interest paid on account of the viatical 
16.30 	settlement within the rescission period. If the insured dies during the rescission period, the 
16.31 	viatical settlement contract shall be deemed to have been rescinded, subject to repayment 
16.32 	by the viator or the viator's estate of all viatical settlement proceeds and any premiums, 
16.33 	loans, and loan interest to the viatical settlement within 60 days of the insured's death;
16.34 	(7) funds will be sent to the viator within three business days after the 
16.35 	viatical settlement provider has received the insurer or group administrator's written 
17.1 	acknowledgment that ownership of the policy or interest in the certificate has been 
17.2 	transferred and the beneficiary has been designated;
17.3 	(8) entering into a viatical settlement contract may cause other rights or benefits, 
17.4 	including conversion rights and waiver of premium benefits that may exist under the 
17.5 	policy or certificate, to be forfeited by the viator. Assistance should be sought from 
17.6 	a financial adviser;
17.7 	(9) disclosure to a viator shall include distribution of a brochure describing the 
17.8 	process of viatical settlements. The NAIC's form for the brochure shall be used unless 
17.9 	another form is developed or approved by the commissioner;
17.10 	(10) the disclosure document shall contain the following language: "All medical, 
17.11 	financial, or personal information solicited or obtained by a viatical settlement provider or 
17.12 	viatical settlement broker about an insured, including the insured's identity or the identity 
17.13 	of family members, a spouse, or a significant other may be disclosed as necessary to 
17.14 	effect the viatical settlement between the viator and the viatical settlement provider. If 
17.15 	you are asked to provide this information, you will be asked to consent to the disclosure. 
17.16 	The information may be provided to someone who buys the policy or provides funds for 
17.17 	the purchase. You may be asked to renew your permission to share information every 
17.18 	two years."; and
17.19 	(11) following execution of a viatical contract, the insured may be contacted for the 
17.20 	purpose of determining the insured's health status and to confirm the insured's residential 
17.21 	or business street address and telephone number, or as otherwise provided in this act. This 
17.22 	contact shall be limited to once every three months if the insured has a life expectancy of 
17.23 	more than one year, and no more than once per month if the insured has a life expectancy 
17.24 	of one year or less. All such contracts shall be made only by a viatical settlement provider 
17.25 	licensed in the state in which the viator resided at the time of the viatical settlement, or by 
17.26 	the authorized representative of a duly licensed viatical settlement provider.
17.27 		Subd. 2.Contract disclosures by provider. A viatical settlement provider shall 
17.28 	provide the viator with at least the following disclosures no later than the date the viatical 
17.29 	settlement contract is signed by all parties. The disclosures shall be conspicuously 
17.30 	displayed in the viatical settlement contract or in a separate document signed by the viator 
17.31 	and provide the following information:
17.32 	(1) the affiliation, if any, between the viatical settlement provider and the issuer 
17.33 	of the insurance policy to be viaticated;
17.34 	(2) the document shall include the name, business address, and telephone number of 
17.35 	the viatical settlement provider;
18.1 	(3) any affiliations or contractual arrangements between the viatical settlement 
18.2 	provider and the viatical settlement purchaser;
18.3 	(4) if an insurance policy to be viaticated has been issued as a joint policy or 
18.4 	involves family riders or any coverage of a life other than the insured under the policy to 
18.5 	be viaticated, the viator shall be informed of the possible loss of coverage on the other 
18.6 	lives under the policy and shall be advised to consult with his or her insurance producer or 
18.7 	the insurer issuing the policy for advice on the proposed viatical settlement;
18.8 	(5) state the dollar amount of the current death benefit payable to the viatical 
18.9 	settlement provider under the policy or certificate. If known, the viatical settlement 
18.10 	provider shall also disclose the availability of any additional guaranteed insurance 
18.11 	benefits, the dollar amount of any accidental death and dismemberment benefits under the 
18.12 	policy or certificate, and the extent to which the viator's interest in those benefits will be 
18.13 	transferred as a result of the viatical settlement contract; and
18.14 	(6) state whether the funds will be escrowed with an independent third party during 
18.15 	the transfer process, and if so, provide the name, business address, and telephone number 
18.16 	of the independent third-party escrow agent, and the fact that the viator or owner may 
18.17 	inspect or receive copies of the relevant escrow or trust agreements or documents.
18.18 		Subd. 3.Contract disclosures by broker. A viatical settlement broker shall 
18.19 	provide the viator with at least the following disclosures no later than the date the viatical 
18.20 	settlement contract is signed by all parties. The disclosures shall be conspicuously 
18.21 	displayed in the viatical settlement contract or in a separate document signed by the viator 
18.22 	and provide the following information:
18.23 	(1) the name, business address, and telephone number of the viatical settlement 
18.24 	broker;
18.25 	(2) a full, complete, and accurate description of all offers, counteroffers, acceptances, 
18.26 	and rejections relating to the proposed viatical settlement contract;
18.27 	(3) a written disclosure of any affiliations or contractual arrangements between the 
18.28 	viatical settlement broker and any person making an offer in connection with the proposed 
18.29 	viatical settlement contracts;
18.30 	(4) the amount and method of calculating the broker's compensation, which term 
18.31 	"compensation" includes anything of value paid or given to a viatical settlement broker 
18.32 	for the placement of a policy; and
18.33 	(5) where any portion of the viatical settlement broker's compensation, as defined in 
18.34 	subdivision 2, clause (3), is taken from a proposed viatical settlement offer, the broker 
18.35 	shall disclose the total amount of the viatical settlement offer and the percentage of the 
18.36 	viatical settlement offer comprised by the viatical settlement broker's compensation.
19.1 		Subd. 4.Ownership and beneficiary changes. If the viatical settlement provider 
19.2 	transfers ownership or changes the beneficiary of the insurance policy, the provider shall 
19.3 	communicate in writing the change in ownership or beneficiary to the insured within 
19.4 	20 days after the change.
19.5 		Subd. 5.Contract disclosures by provider or agent. A viatical settlement provider 
19.6 	or its viatical settlement investment agent shall provide the viatical settlement purchaser 
19.7 	with at least the following disclosures prior to the date the viatical settlement purchase 
19.8 	agreement is signed by all parties. The disclosures shall be conspicuously displayed in 
19.9 	any viatical purchase contract or in a separate document signed by the viatical settlement 
19.10 	purchaser and viatical settlement provider or viatical settlement investment agent, and 
19.11 	shall make the following disclosure to the viatical settlement purchaser:
19.12 	(1) the purchaser will receive no returns, for example, dividends and interest, until 
19.13 	the insured dies and a death claim payment is made;
19.14 	(2) the actual annual rate of return on a viatical settlement contract is dependent 
19.15 	upon an accurate projection of the insured's life expectancy, and the actual date of the 
19.16 	insured's death. An annual guaranteed rate of return is not determinable;
19.17 	(3) the viaticated life insurance contract should not be considered a liquid purchase 
19.18 	since it is impossible to predict the exact timing of its maturity and the funds are probably 
19.19 	not available until the death of the insured. There is no established secondary market for 
19.20 	resale of these products by the purchaser;
19.21 	(4) the purchaser may lose all benefits or may receive substantially reduced benefits 
19.22 	if the insurer goes out of business during the term of the viatical investment;
19.23 	(5) the purchaser is responsible for payment of the insurance premium or other 
19.24 	costs related to the policy, if required by the terms of the viatical purchase agreement. 
19.25 	These payments may reduce the purchaser's return. If a party other than the purchaser is 
19.26 	responsible for the payment, the name and address of that party shall also be disclosed;
19.27 	(6) the purchaser is responsible for payment of the insurance premiums or other 
19.28 	costs related to the policy if the insured returns to health. Disclose the amount of such 
19.29 	premiums, if applicable;
19.30 	(7) state the name, business address, and telephone number of the independent third 
19.31 	party providing escrow services and the relationship to the broker;
19.32 	(8) the amount of any trust fees or other expenses to be charged to the viatical 
19.33 	settlement purchaser shall be disclosed;
19.34 	(9) state whether the purchaser is entitled to a refund of all or part of his or her 
19.35 	investment under the settlement contract if the policy is later determined to be null and 
19.36 	void;
20.1 	(10) disclose that group policies may contain limitations or caps in the conversion 
20.2 	rights, additional premiums may have to be paid if the policy is converted, name the 
20.3 	party responsible for the payment of the additional premiums and, if a group policy 
20.4 	is terminated and replaced by another group policy, state that there may be no right 
20.5 	to convert the original coverage;
20.6 	(11) disclose the risks associated with policy contestability including, but not limited 
20.7 	to, the risk that the purchaser will have no claim or only a partial claim to death benefits 
20.8 	should the insurer rescind the policy within the contestability period;
20.9 	(12) disclose whether the purchaser will be the owner of the policy in addition to 
20.10 	being the beneficiary, and if the purchaser is the beneficiary only and not also the owner, 
20.11 	the special risks associated with that status, including, but not limited to, the risk that the 
20.12 	beneficiary may be changed or the premium may not be paid;
20.13 	(13) describe the experience and qualifications of the person who determines the 
20.14 	life expectancy of the insured, for example, in-house staff, independent physicians, and 
20.15 	specialty firms that weigh medical and actuarial data; the information this projection is 
20.16 	based on; and the relationship of the projection maker to the viatical settlement provider, if 
20.17 	any; and
20.18 	(14) disclosure to an investor shall include distribution of a brochure describing the 
20.19 	process of investment in viatical settlements. The NAIC's form for the brochure shall be 
20.20 	used unless one is developed by the commissioner.
20.21 		Subd. 6.Transfer or sale disclosures by provider or agent. A viatical settlement 
20.22 	provider or its viatical settlement investment agent shall provide the viatical settlement 
20.23 	purchaser with at least the following disclosures no later than at the time of the 
20.24 	assignment, transfer, or sale of all or a portion of an insurance policy. The disclosures 
20.25 	shall be contained in a document signed by the viatical settlement purchaser and viatical 
20.26 	settlement provider or viatical settlement investment agent, and shall make the following 
20.27 	disclosures to the viatical settlement purchaser:
20.28 	(1) disclose all the life expectancy certifications obtained by the provider in the 
20.29 	process of determining the price paid to the viator;
20.30 	(2) state whether premium payments or other costs related to the policy have been 
20.31 	escrowed. If escrowed, state the date upon which the escrowed funds will be depleted 
20.32 	and whether the purchaser will be responsible for payment of premiums thereafter and, if 
20.33 	so, the amount of the premiums;
20.34 	(3) state whether premium payments or other costs related to the policy have been 
20.35 	waived. If waived, disclose whether the investor will be responsible for payment of the 
21.1 	premiums if the insurer that wrote the policy terminates the waiver after purchase and 
21.2 	the amount of those premiums;
21.3 	(4) disclose the type of policy offered or sold, for example, whole life, term life, 
21.4 	universal life, or a group policy certificate; any additional benefits contained in the policy; 
21.5 	and the current status of the policy;
21.6 	(5) if the policy is term insurance, disclose the special risks associated with term 
21.7 	insurance including, but not limited to, the purchaser's responsibility for additional 
21.8 	premiums if the viator continues the term policy at the end of the current term;
21.9 	(6) state whether the policy is contestable;
21.10 	(7) state whether the insurer that wrote the policy has any additional rights that could 
21.11 	negatively affect or extinguish the purchaser's rights under the viatical settlement contract, 
21.12 	what these rights are, and under what conditions these rights are activated; and
21.13 	(8) state the name and address of the person responsible for monitoring the insured's 
21.14 	condition. Describe how often the monitoring of the insured's condition is done, how the 
21.15 	date of death is determined, and how and when this information will be transmitted to 
21.16 	the purchaser.
21.17 		Subd. 7.Agreement voidable. The viatical settlement purchase agreement is 
21.18 	voidable by the purchaser at any time within three days after the disclosures mandated by 
21.19 	subdivisions 4 and 5 are received by the purchaser.

21.20 	Sec. 8. [60A.9578] DISCLOSURE TO INSURER.
21.21 	Prior to the initiation of a plan, transaction, or series of transactions, a viatical 
21.22 	settlement broker or viatical settlement provider shall fully disclose to an insurer a plan, 
21.23 	transaction, or series of transactions, to which the viatical settlement broker or viatical 
21.24 	settlement provider is a party, to originate, renew, continue, or finance a life insurance 
21.25 	policy with the insurer for the purpose of engaging in the business of viatical settlements 
21.26 	at anytime prior to, or during the first five years after, issuance of the policy.

21.27 	Sec. 9. [60A.9579] GENERAL RULES.
21.28 		Subdivision 1.Provider requirements. (a) A viatical settlement provider entering 
21.29 	into a viatical settlement contract shall first obtain:
21.30 	(1) if the viator is the insured, a written statement from a licensed attending 
21.31 	physician that the viator is of sound mind and under no constraint or undue influence to 
21.32 	enter into a viatical settlement contract; and
22.1 	(2) a document in which the insured consents to the release of his or her medical 
22.2 	records to a licensed viatical settlement provider, viatical settlement broker, and the 
22.3 	insurance company that issued the life insurance policy covering the life of the insured.
22.4 	(b) Within 20 days after a viator executes documents necessary to transfer any rights 
22.5 	under an insurance policy or within 20 days of entering any agreement, option, promise, or 
22.6 	any other form of understanding, expressed or implied, to viaticate the policy, the viatical 
22.7 	settlement provider shall give written notice to the insurer that issued that insurance policy 
22.8 	that the policy has or will become a viaticated policy. The notice shall be accompanied by 
22.9 	the documents required by paragraph (c).
22.10 	(c) The viatical provider shall deliver a copy of the medical release required under 
22.11 	paragraph (a), clause (2), a copy of the viator's application for the viatical settlement 
22.12 	contract, the notice required under paragraph (b), and a request for verification of coverage 
22.13 	to the insurer that issued the life insurance policy that is the subject of the viatical 
22.14 	transaction. The NAIC's form for verification of coverage shall be used unless another 
22.15 	form is developed or approved by the commissioner.
22.16 	(d) The insurer shall respond to a request for verification of coverage submitted on 
22.17 	an approved form by a viatical settlement provider or viatical settlement broker within 30 
22.18 	calendar days of the date the request is received and shall indicate whether, based on the 
22.19 	medical evidence and documents provided, the insurer intends to pursue an investigation 
22.20 	at this time regarding the validity of the insurance contract or possible fraud. The insurer 
22.21 	shall accept a request for verification of coverage made on an NAIC form or any other 
22.22 	form approved by the commissioner. The insurer shall accept an original or facsimile or 
22.23 	electronic copy of such request and any accompanying authorization signed by the viator. 
22.24 	Failure by the insurer to meet its obligations under this subdivision shall be a violation of 
22.25 	sections 60A.958, subdivision 3, and 60A.9585.
22.26 	(e) Prior to or at the time of execution of the viatical settlement contract, the viatical 
22.27 	settlement provider shall obtain a witnessed document in which the viator consents 
22.28 	to the viatical settlement contract, represents that the viator has a full and complete 
22.29 	understanding of the viatical settlement contract, that he or she has a full and complete 
22.30 	understanding of the benefits of the life insurance policy, acknowledges that he or she is 
22.31 	entering into the viatical settlement contract freely and voluntarily and, for persons with 
22.32 	a terminal or chronic illness or condition, acknowledges that the insured has a terminal 
22.33 	or chronic illness and that the terminal or chronic illness or condition was diagnosed 
22.34 	after the life insurance policy was issued.
23.1 	(f) If a viatical settlement broker performs any of these activities required of the 
23.2 	viatical settlement provider, the provider is deemed to have fulfilled the requirements 
23.3 	of this section.
23.4 		Subd. 2.Confidentiality of personal information. All personal information 
23.5 	solicited or obtained by any licensee shall be subject to sections 72A.49 to 72A.505.
23.6 		Subd. 3.General right of rescission. All viatical settlement contracts entered into 
23.7 	in this state shall provide the viator with an absolute right to rescind the contract before 
23.8 	the earlier of 60 calendar days after the date upon which the viatical settlement contract is 
23.9 	executed by all parties or 30 calendar days after the viatical settlement proceeds have been 
23.10 	sent to the viator as provided in subdivision 6. Rescission by the viator may be conditioned 
23.11 	upon the viator both giving notice and repaying to the viatical settlement provider within 
23.12 	the rescission period all proceeds of the settlement and any premiums, loans, and loan 
23.13 	interest paid by or on behalf of the viatical settlement provider in connection with or 
23.14 	as a consequence of the viatical settlement. If the insured dies during the rescission 
23.15 	period, the viatical settlement contract shall be deemed to have been rescinded, subject 
23.16 	to repayment to the viatical settlement provider or purchaser of all viatical settlement 
23.17 	proceeds, and any premiums, loans, and loan interest that have been paid by the viatical 
23.18 	settlement provider or purchaser, which shall be paid within 60 calendar days of the death 
23.19 	of the insured. In the event of any rescission, if the viatical settlement provider has paid 
23.20 	commissions or other compensation to a viatical settlement broker in connection with the 
23.21 	rescinded transaction, the viatical settlement broker shall refund all such commissions 
23.22 	and compensation to the viatical settlement provider within five business days following 
23.23 	receipt of written demand from the viatical settlement provider, which demand shall be 
23.24 	accompanied by either the viator's notice of rescission if rescinded at the election of the 
23.25 	viator, or notice of the death of the insured if rescinded by reason of the death of the 
23.26 	insured within the applicable rescission period.
23.27 		Subd. 4.Right to rescind after mandated disclosures. The purchaser shall have 
23.28 	the right to rescind a viatical settlement contract within three days after the disclosures 
23.29 	mandated by section 60A.9577, subdivisions 4 and 5, are received by the purchaser.
23.30 		Subd. 5.Payment of settlement proceeds. The viatical settlement provider shall 
23.31 	instruct the viator to send the executed documents required to effect the change in 
23.32 	ownership, assignment, or change in beneficiary directly to the independent escrow agent. 
23.33 	Within three business days after the date the escrow agent receives the document, or from 
23.34 	the date the viatical settlement provider receives the documents, if the viator erroneously 
23.35 	provides the documents directly to the provider, the provider shall pay or transfer the 
23.36 	proceeds of the viatical settlement into an escrow or trust account maintained in a state- or 
24.1 	federally chartered financial institution whose deposits are insured by the Federal Deposit 
24.2 	Insurance Corporation (FDIC). Upon payment of the settlement proceeds into the escrow 
24.3 	account, the escrow agent shall deliver the original change in ownership, assignment, or 
24.4 	change in beneficiary forms to the viatical settlement provider or related provider trust 
24.5 	or other designated representative of the viatical settlement provider. Upon the escrow 
24.6 	agent's receipt of the acknowledgment of the properly completed transfer of ownership, 
24.7 	assignment, or designation of beneficiary from the insurance company, the escrow agent 
24.8 	shall pay the settlement proceeds to the viator.
24.9 		Subd. 6.Tendering consideration. Failure to tender consideration to the viator 
24.10 	for the viatical settlement contract within the time set forth in the disclosure pursuant 
24.11 	to section 60A.9577, subdivision 1, clause (7), renders the viatical settlement contract 
24.12 	voidable by the viator for lack of consideration until the time consideration is tendered to 
24.13 	and accepted by the viator. Funds shall be deemed sent by a viatical settlement provider 
24.14 	to a viator as of the date that the escrow agent either releases funds for wire transfer 
24.15 	to the viator or places a check for delivery to the viator by United States mail or other 
24.16 	nationally recognized delivery service.
24.17 		Subd. 7.Health status contacts. Contacts with the insured for the purpose of 
24.18 	determining the health status of the insured by the viatical settlement provider or viatical 
24.19 	settlement broker after the viatical settlement has occurred shall only be made by the 
24.20 	viatical settlement provider or broker licensed in this state or its authorized representatives 
24.21 	and shall be limited to once every three months for insureds with a life expectancy of more 
24.22 	than one year, and to no more than once per month for insureds with a life expectancy of 
24.23 	one year or less. The provider or broker shall explain the procedure for these contacts 
24.24 	at the time the viatical settlement contract is entered into. The limitations set forth 
24.25 	in this subdivision shall not apply to any contacts with an insured for reasons other 
24.26 	than determining the insured's health status. Viatical settlement providers and viatical 
24.27 	settlement brokers shall be responsible for the actions of their authorized representatives.

24.28 	Sec. 10. [60A.958] PROHIBITED PRACTICES.
24.29 		Subdivision 1.Viator's failure to certify conditions. It is a violation of sections 
24.30 	60A.957 to 60A.9585 for any person to enter into a viatical settlement contract at any time 
24.31 	prior to the application or issuance of a policy which is the subject of a viatical settlement 
24.32 	contract or within a five-year period commencing with the date of issuance of the 
24.33 	insurance policy or certificate unless the viator certifies to the viatical settlement provider 
24.34 	that one or more of the following conditions have been met within the five-year period:
25.1 	(1) the policy was issued upon the viator's exercise of conversion rights arising out 
25.2 	of a group or individual policy, provided the total of the time covered under the conversion 
25.3 	policy plus the time covered under the prior policy is at least 60 months. The time covered 
25.4 	under a group policy shall be calculated without regard to any change in insurance carriers, 
25.5 	provided the coverage has been continuous and under the same group sponsorship;
25.6 	(2) the viator submits independent evidence to the viatical settlement provider that 
25.7 	one or more of the following conditions have been met within the five-year period:
25.8 	(i) the viator or insured is terminally or chronically ill;
25.9 	(ii) the viator's spouse dies;
25.10 	(iii) the viator divorces the viator's spouse;
25.11 	(iv) the viator retires from full-time employment;
25.12 	(v) the viator becomes physically or mentally disabled and a physician determines 
25.13 	that the disability prevents the viator from maintaining full-time employment; or
25.14 	(vi) a final order, judgment, or decree is entered by a court of competent jurisdiction, 
25.15 	on the application of a creditor of the viator, adjudicating the viator bankrupt or insolvent, 
25.16 	or approving a petition seeking reorganization of the viator or appointing a receiver, 
25.17 	trustee, or liquidator to all or a substantial part of the viator's assets; or
25.18 	(3) the viator enters into a viatical settlement contract more than two years after the 
25.19 	date of issuance of a policy and, with respect to the policy, at all times prior to the date that 
25.20 	is two years after policy issuance, the following conditions are met:
25.21 	(i) policy premiums have been funded exclusively with unencumbered assets, 
25.22 	including an interest in the life insurance policy being financed only to the extent of its net 
25.23 	cash surrender value, provided by, or fully recourse liability incurred by, the insured or a 
25.24 	person described in section 60A.957, subdivision 16, paragraph (c), clause (4);
25.25 	(ii) there is no agreement or understanding with any other person to guarantee any 
25.26 	such liability or to purchase, or stand ready to purchase, the policy, including through an 
25.27 	assumption or forgiveness of the loan; and
25.28 	(iii) neither the insured nor the policy has been evaluated for settlement in 
25.29 	connection with the issuance of the policy.
25.30 		Subd. 2.Document submissions. Copies of the independent evidence described 
25.31 	in subdivision 1, clause (2), and documents required by section 60A.9579 shall be 
25.32 	submitted to the insurer when the viatical settlement provider or other party entering into a 
25.33 	viatical settlement contract with a viator submits a request to the insurer for verification 
25.34 	of coverage. The copies shall be accompanied by a letter of attestation from the viatical 
25.35 	settlement provider that the copies are true and correct copies of the documents received 
25.36 	by the viatical settlement provider.
26.1 		Subd. 3.Certification submission. If the viatical settlement provider submits to 
26.2 	the insurer a copy of the owner or insured's certification described in and the independent 
26.3 	evidence required by subdivision 1, clause (2), when the provider submits a request to the 
26.4 	insurer to effect the transfer of the policy or certificate to the viatical settlement provider, 
26.5 	the copy shall be deemed to conclusively establish that the viatical settlement contract 
26.6 	satisfies the requirements of this section and the insurer shall timely respond to the request.
26.7 		Subd. 4.Commissioner's form approval required. No insurer may, as a condition 
26.8 	of responding to a request for verification of coverage or effecting the transfer of a 
26.9 	policy pursuant to a viatical settlement contract, require that the viator, insured, viatical 
26.10 	settlement provider, or viatical settlement broker sign any forms, disclosures, consent, 
26.11 	or waiver form that has not been expressly approved by the commissioner for use in 
26.12 	connection with viatical settlement contracts in this state.
26.13 		Subd. 5.Change of ownership or beneficiary. Upon receipt of a properly 
26.14 	completed request for change of ownership or beneficiary of a policy, the insurer shall 
26.15 	respond in writing within 30 calendar days with written acknowledgment confirming that 
26.16 	the change has been effected or specifying the reasons why the requested change cannot 
26.17 	be processed. The insurer shall not unreasonably delay effecting change of ownership or 
26.18 	beneficiary and shall not otherwise seek to interfere with any viatical settlement contract 
26.19 	lawfully entered into in this state.

26.20 	Sec. 11. [60A.9581] PROHIBITED PRACTICES AND CONFLICTS OF 
26.21 	INTEREST.
26.22 		Subdivision 1.Solicitations and sales to controlled person. With respect to any 
26.23 	viatical settlement contract or insurance policy, no viatical settlement broker knowingly 
26.24 	shall solicit an offer from, effectuate a viatical settlement with, or make a sale to any 
26.25 	viatical settlement provider, viatical settlement purchaser, viatical settlement investment 
26.26 	agent, financing entity, or related provider trust that is controlling, controlled by, or under 
26.27 	common control with such viatical settlement broker.
26.28 		Subd. 2.Payment to controlled broker. With respect to any viatical settlement 
26.29 	contract or insurance policy, no viatical settlement provider knowingly may enter into a 
26.30 	viatical settlement contract with a viator, if, in connection with such viatical settlement 
26.31 	contract, anything of value will be paid to a viatical settlement broker that is controlling, 
26.32 	controlled by, or under common control with such viatical settlement provider or the 
26.33 	viatical settlement purchaser, viatical settlement investment agent, financing entity, or 
26.34 	related provider trust that is involved in such viatical settlement contract.
27.1 		Subd. 3.Fraudulent viatical settlement act. A violation of subdivisions 1 and 2 
27.2 	shall be deemed a fraudulent viatical settlement act.
27.3 		Subd. 4.Policy settlement. No person shall issue, solicit, market, or otherwise 
27.4 	promote the purchase of an insurance policy for the purpose of or with an emphasis on 
27.5 	settling the policy.
27.6 		Subd. 5.Premium finance agreements. No person shall enter into a premium 
27.7 	finance agreement with any other person or agency, or any person affiliated with such 
27.8 	person or agency, pursuant to which such person shall receive any proceeds, fees, or other 
27.9 	consideration, directly or indirectly from the policy or owner of the policy or any other 
27.10 	person with respect to the premium finance agreement or any viatical settlement contract 
27.11 	or other transaction related to such policy that are in addition to the amounts required to 
27.12 	pay the principal, interest, and service charges related to policy premiums pursuant to the 
27.13 	premium finance agreement or subsequent sale of such agreement; provided further that 
27.14 	any payments, charges, fees, or other amounts in addition to the amounts required to pay 
27.15 	the principal, interest, and service charges related to policy premiums paid under the 
27.16 	premium finance agreement shall be remitted to the original owner of the policy or to the 
27.17 	owner's estate if the owner is not living at the time of the determination of overpayment.
27.18 		Subd. 6.Insurable interest. In the solicitation, application, or issuance of a life 
27.19 	insurance policy, no person shall employ any device, scheme, or artifice in violation 
27.20 	of insurable interest laws.
27.21 		Subd. 7.Advertising. (a) No viatical settlement provider shall enter into a viatical 
27.22 	settlement contract unless the viatical settlement promotional, advertising, and marketing 
27.23 	materials, as may be prescribed by rule, have been filed with the commissioner. In no 
27.24 	event shall any marketing materials expressly reference that the insurance is "free" for 
27.25 	any period of time. The inclusion of any reference in the marketing materials that would 
27.26 	cause a viator to reasonably believe that the insurance is free for any period of time shall 
27.27 	be considered a violation of sections 60A.957 to 60A.9585.
27.28 	(b) No life insurance producer, insurance company, viatical settlement broker, 
27.29 	viatical settlement provider, or viatical settlement investment agent shall make any 
27.30 	statement or representation to the applicant or policyholder in connection with the sale or 
27.31 	financing of a life insurance policy to the effect that the insurance is free or without cost to 
27.32 	the policyholder for any period of time unless provided in the policy.

27.33 	Sec. 12. [60A.9582] ADVERTISING FOR VIATICAL SETTLEMENTS AND 
27.34 	VIATICAL SETTLEMENTS PURCHASE AGREEMENTS.
28.1 		Subdivision 1.Application. This section applies to any advertising of viatical 
28.2 	settlement contracts, viatical purchase agreements, or related products or services intended 
28.3 	for dissemination in this state, including Internet advertising viewed by persons located in 
28.4 	this state. Where disclosure requirements are established pursuant to federal regulation, 
28.5 	this section shall be interpreted so as to minimize or eliminate conflict with federal 
28.6 	regulation wherever possible.
28.7 		Subd. 2.System of control. Every viatical settlement licensee shall establish and at 
28.8 	all times maintain a system of control over the content, form, and method of dissemination 
28.9 	of all advertisements of its contracts, products, and services. All advertisements, 
28.10 	regardless of by whom written, created, designed, or presented, shall be the responsibility 
28.11 	of the viatical settlement licensees, as well as the individual who created or presented the 
28.12 	advertisement. A system of control shall include regular routine notification, at least once 
28.13 	a year, to agents and others authorized by the viatical settlement licensee who disseminate 
28.14 	advertisements of the requirements and procedures for approval prior to the use of any 
28.15 	advertisements not furnished by the viatical settlement licensee.
28.16 		Subd. 3.Form and content. Advertisements shall be truthful and not misleading in 
28.17 	fact or by implication. The form and content of an advertisement of a viatical settlement 
28.18 	contract or viatical settlement purchase agreement, product, or service shall be sufficiently 
28.19 	complete and clear so as to avoid deception and it shall not have the capacity or tendency 
28.20 	to mislead or deceive. Whether an advertisement has the capacity or tendency to mislead 
28.21 	or deceive shall be determined by the commissioner from the overall impression that the 
28.22 	advertisement may be reasonably expected to create upon a person of average education 
28.23 	or intelligence within the segment of the public to which it is directed.
28.24 		Subd. 4.False and misleading advertisements. Certain viatical settlement 
28.25 	advertisements are deemed false and misleading on their face and are prohibited. False 
28.26 	and misleading viatical settlement advertisements include, but are not limited to, the 
28.27 	following representations:
28.28 	(1) "guaranteed," "fully secured," "100 percent secured," "fully insured," "secure," 
28.29 	"safe," "backed by rated insurance companies," "backed by federal law," "backed by state 
28.30 	law," or "state guaranty funds," or similar representations;
28.31 	(2) "no risk," "minimal risk," "low risk," "no speculation," "no fluctuation," or 
28.32 	similar representations;
28.33 	(3) "qualified or approved for individual retirement accounts (IRAs), Roth IRAs, 
28.34 	401(k) plans, simplified employee pensions (SEP), 403(b), Keogh plans, TSA, other 
28.35 	retirement account rollovers," "tax deferred," or similar representations;
29.1 	(4) utilization of the word "guaranteed" to describe the fixed return, annual return, 
29.2 	principal, earnings, profits, investment, or similar representations;
29.3 	(5) "no sales charges or fees" or similar representations;
29.4 	(6) "high yield," "superior return," "excellent return," "high return," "quick profit," 
29.5 	or similar representations; and
29.6 	(7) purported favorable representations or testimonials about the benefits of viatical 
29.7 	settlement contracts or viatical settlement purchase agreements as an investment, taken 
29.8 	out of context from newspapers, trade papers, journals, radio and television programs, and 
29.9 	all other forms of print and electronic media.
29.10 		Subd. 5.Disclosures regulated. (a) The information required to be disclosed under 
29.11 	this section shall not be minimized, rendered obscure, or presented in ambiguous fashion 
29.12 	or intermingled with the text of the advertisement so as to be confusing or misleading.
29.13 	(b) An advertisement shall not omit material information or use words, phrases, 
29.14 	statements, references, or illustrations if the omission or use has the capacity, tendency, 
29.15 	or effect of misleading or deceiving viators, purchasers, or prospective purchasers as to 
29.16 	the nature or extent of any benefit, loss covered, premium payable, or state or federal tax 
29.17 	consequence. The fact that the viatical settlement contract or viatical settlement purchase 
29.18 	agreement offered is made available for inspection prior to consummation of the sale, or 
29.19 	an offer is made to refund the payment if the viator is not satisfied or that the viatical 
29.20 	settlement contract or viatical settlement purchase agreement includes a "free look" period 
29.21 	that satisfies or exceeds legal requirements, does not remedy misleading statements.
29.22 	(c) An advertisement shall not use the name or title of a life insurance company or a 
29.23 	life insurance policy unless the advertisement has been approved by the insurer.
29.24 	(d) An advertisement shall not represent that premium payments will not be required 
29.25 	to be paid on the life insurance policy that is the subject of a viatical settlement contract 
29.26 	or viatical settlement purchase agreement in order to maintain that policy, unless that 
29.27 	is the fact.
29.28 	(e) An advertisement shall not state or imply that interest charged on an accelerated 
29.29 	death benefit or a policy loan is unfair, inequitable, or in any manner an incorrect or 
29.30 	improper practice.
29.31 	(f) The words "free," "no cost," "without cost," "no additional cost," "at no extra 
29.32 	cost," or words of similar import shall not be used with respect to any benefit or service 
29.33 	unless true. An advertisement may specify the charge for a benefit or a service or may 
29.34 	state that a charge is included in the payment or use other appropriate language.
29.35 	(g) Testimonials, appraisals, or analysis used in advertisements must be genuine; 
29.36 	represent the current opinion of the author; be applicable to the viatical settlement contract 
30.1 	or viatical settlement purchase agreement product or service advertised, if any; and be 
30.2 	accurately reproduced with sufficient completeness to avoid misleading or deceiving 
30.3 	prospective viators or purchasers as to the nature or scope of the testimonials, appraisal, 
30.4 	analysis, or endorsement. In using testimonials, appraisals, or analysis, a licensee under 
30.5 	sections 60A.957 to 60A.9585 makes as its own all the statements contained therein, and 
30.6 	the statements are subject to all the provisions of this section.
30.7 	(h) If the individual making a testimonial, appraisal, analysis, or endorsement has 
30.8 	a financial interest in the party making use of the testimonial, appraisal, analysis, or 
30.9 	endorsement, either directly or through a related entity as a stockholder, director, officer, 
30.10 	employee, or otherwise, or receives any benefit directly or indirectly other than required 
30.11 	union-scale wages, that fact shall be prominently disclosed in the advertisement.
30.12 	(i) An advertisement shall not state or imply that a viatical settlement contract or 
30.13 	viatical settlement purchase agreement, benefit, or service has been approved or endorsed 
30.14 	by a group of individuals, society, association, or other organization unless that is the 
30.15 	fact and unless any relationship between an organization and the viatical settlement 
30.16 	licensee is disclosed. If the entity making the endorsement or testimonial is owned, 
30.17 	controlled, or managed by the viatical settlement licensee, or receives any payment or 
30.18 	other consideration from the viatical settlement licensee for making an endorsement or 
30.19 	testimonial, that fact shall be disclosed in the advertisement.
30.20 	(j) When an endorsement refers to benefits received under a viatical settlement 
30.21 	contract or viatical settlement purchase agreement, all pertinent information shall be 
30.22 	retained for a period of five years after its use.
30.23 		Subd. 6.Statistics. An advertisement shall not contain statistical information unless 
30.24 	it accurately reflects recent and relevant facts. The source of all statistics used in an 
30.25 	advertisement shall be identified.
30.26 		Subd. 7.Disparaging advertisements. An advertisement shall not disparage 
30.27 	insurers, viatical settlement providers, viatical settlement brokers, viatical settlement 
30.28 	investment agents, insurance producers, policies, services, or methods of marketing.
30.29 		Subd. 8.Licensee's name. The name of the viatical settlement licensee shall be 
30.30 	clearly identified in all advertisements about the licensee or its viatical settlement contract 
30.31 	or viatical settlement purchase agreements, products, or services, and if any specific 
30.32 	viatical settlement contract or viatical settlement purchase agreement is advertised, the 
30.33 	viatical settlement contract or viatical settlement purchase agreement shall be identified 
30.34 	either by form number or some other appropriate description. If an application is part 
30.35 	of the advertisement, the name of the viatical settlement provider shall be shown on 
30.36 	the application.
31.1 		Subd. 9.Licensee disclosure. An advertisement shall not use a trade name, group 
31.2 	designation, name of the parent company of a viatical settlement licensee, name of a 
31.3 	particular division of the viatical settlement licensee, service mark, slogan, symbol, or 
31.4 	other device or reference without disclosing the name of the viatical settlement licensee, if 
31.5 	the advertisement would have the capacity or tendency to mislead or deceive as to the 
31.6 	true identity of the viatical settlement licensee, or to create the impression that a company 
31.7 	other than the viatical settlement licensee would have any responsibility for the financial 
31.8 	obligation under a viatical settlement contract or viatical settlement purchase agreement.
31.9 		Subd. 10.Government sponsorship; misleading advertisements. An 
31.10 	advertisement shall not use any combination of words, symbols, or physical materials that 
31.11 	by their content, phraseology, shape, color, or other characteristics are so similar to a 
31.12 	combination of words, symbols, or physical materials used by a government program or 
31.13 	agency or otherwise appear to be of such a nature that they tend to mislead prospective 
31.14 	viators or purchasers into believing that the solicitation is in some manner connected with 
31.15 	a government program or agency.
31.16 		Subd. 11.State licensure. An advertisement may state that a viatical settlement 
31.17 	licensee is licensed in the state where the advertisement appears, provided it does not 
31.18 	exaggerate that fact or suggest or imply that a competing viatical settlement licensee may 
31.19 	not be so licensed. The advertisement may ask the audience to consult the licensee's 
31.20 	Web site or contact the department of commerce to find out if the state requires licensing 
31.21 	and, if so, whether the viatical settlement provider, viatical settlement broker, or viatical 
31.22 	settlement investment agent is licensed.
31.23 		Subd. 12.Government entity endorsement. An advertisement shall not create 
31.24 	the impression that the viatical settlement provider, its financial condition or status, the 
31.25 	payment of its claims, or the merits, desirability, or advisability of its viatical settlement 
31.26 	contracts or viatical settlement purchase agreement forms are recommended or endorsed 
31.27 	by any government entity.
31.28 		Subd. 13.Name. The name of the actual licensee shall be stated in all of its 
31.29 	advertisements. An advertisement shall not use a trade name, any group designation, name 
31.30 	of any affiliate or controlling entity of the licensee, service mark, slogan, symbol, or other 
31.31 	device in a manner that would have the capacity or tendency to mislead or deceive as to 
31.32 	the true identity of the actual licensee or create the false impression that an affiliate or 
31.33 	controlling entity would have any responsibility for the financial obligation of the licensee.
31.34 		Subd. 14.Government approval. An advertisement shall not directly or indirectly 
31.35 	create the impression that any division or agency of the state or of the United States 
31.36 	government endorses, approves, or favors:
32.1 	(1) any viatical settlement licensee or its business practices or methods of operation;
32.2 	(2) the merits, desirability, or advisability of any viatical settlement contract or 
32.3 	viatical settlement purchase agreement;
32.4 	(3) any viatical settlement contract or viatical settlement purchase agreement; or
32.5 	(4) any life insurance policy or life insurance company.
32.6 		Subd. 15.Time frame disclosure. If the advertiser emphasizes the speed with 
32.7 	which the viatication will occur, the advertising must disclose the average time frame from 
32.8 	completed application to the date of offer and from acceptance of the offer to receipt of 
32.9 	the funds by the viator.
32.10 		Subd. 16.Average purchase price. If the advertising emphasizes the dollar amounts 
32.11 	available to viators, the advertising shall disclose the average purchase price as a percent 
32.12 	of face value obtained by viators contracting with the licensee during the past six months.

32.13 	Sec. 13. [60A.9583] FRAUD PREVENTION AND CONTROL.
32.14 		Subdivision 1.Fraudulent viatical settlement acts, interference, and 
32.15 	participation of convicted felons prohibited. (a) A person shall not commit a fraudulent 
32.16 	viatical settlement act.
32.17 	(b) A person shall not knowingly or intentionally interfere with the enforcement of 
32.18 	the provisions of sections 60A.957 to 60A.9585 or investigations of suspected or actual 
32.19 	violations of sections 60A.957 to 60A.9585.
32.20 	(c) A person in the business of viatical settlements shall not knowingly or 
32.21 	intentionally permit any person convicted of a felony involving dishonesty or breach of 
32.22 	trust to participate in the business of viatical settlements.
32.23 		Subd. 2.Fraud warning required. (a) Viatical settlements contracts and purchase 
32.24 	agreement forms and applications for viatical settlements, regardless of the form of 
32.25 	transmission, shall contain the following statement or a substantially similar statement: 
32.26 	"Any person who knowingly presents false information in an application for insurance or 
32.27 	viatical settlement contract or a viatical settlement purchase agreement is guilty of a crime 
32.28 	and may be subject to fines and confinement in prison."
32.29 	(b) The lack of a statement as required in paragraph (a) does not constitute a defense 
32.30 	in any prosecution for a fraudulent viatical settlement act.
32.31 		Subd. 3.Mandatory reporting of fraudulent viatical settlement acts. (a) Any 
32.32 	person engaged in the business of viatical settlements having knowledge or a reasonable 
32.33 	suspicion that a fraudulent viatical settlement act is being, will be, or has been committed 
32.34 	shall provide to the commissioner such information as required by, and in a manner 
32.35 	prescribed by, the commissioner.
33.1 	(b) Any other person having knowledge or a reasonable belief that a fraudulent 
33.2 	viatical settlement act is being, will be, or has been committed may provide to 
33.3 	the commissioner the information required by, and in a manner prescribed by, the 
33.4 	commissioner.
33.5 		Subd. 4.Immunity from liability. (a) No civil liability shall be imposed on and no 
33.6 	cause of action shall arise from a person's furnishing information concerning suspected, 
33.7 	anticipated, or completed fraudulent viatical settlement acts or suspected or completed 
33.8 	fraudulent insurance acts, if the information is provided to or received from:
33.9 	(1) the commissioner or the commissioner's employees, agents, or representatives;
33.10 	(2) federal, state, or local law enforcement or regulatory officials or their employees, 
33.11 	agents, or representatives;
33.12 	(3) a person involved in the prevention and detection of fraudulent viatical settlement 
33.13 	acts or that person's agents, employees, or representatives;
33.14 	(4) the National Association of Insurance Commissioners (NAIC), National 
33.15 	Association of Securities Dealers (NASD), the North American Securities Administrators 
33.16 	Association (NASAA), or their employees, agents, or representatives, or other regulatory 
33.17 	body overseeing life insurance, viatical settlements, securities, or investment fraud; or
33.18 	(5) the life insurer that issued the life insurance policy covering the life of the insured.
33.19 	(b) Paragraph (a) shall not apply to statements made with actual malice. In an action 
33.20 	brought against a person for filing a report or furnishing other information concerning 
33.21 	a fraudulent viatical settlement act, the party bringing the action shall plead specifically 
33.22 	any allegation that paragraph (a) does not apply because the person filing the report or 
33.23 	furnishing the information did so with actual malice.
33.24 	(c) A person furnishing information as identified as paragraph (a) shall be entitled to 
33.25 	an award of attorney fees and costs if the person is the prevailing party in a civil cause 
33.26 	of action for libel, slander, or any other relevant tort arising out of activities in carrying 
33.27 	out the provisions of sections 60A.957 to 60A.9585 and the party bringing the action 
33.28 	was not substantially justified in doing so. For purposes of this section, a proceeding is 
33.29 	"substantially justified" if it had a reasonable basis in law or fact at the time that it was 
33.30 	initiated. However, such an award does not apply to any person furnishing information 
33.31 	concerning the person's own fraudulent viatical settlement acts.
33.32 	(d) This section does not abrogate or modify common law or statutory privileges or 
33.33 	immunities enjoyed by a person described in paragraph (a).
33.34 		Subd. 5.Confidentiality. (a) The documents and evidence provided pursuant to 
33.35 	subdivision 4 or obtained by the commissioner in an investigation of suspected or actual 
34.1 	fraudulent viatical settlement acts shall be privileged and confidential and shall not be a 
34.2 	public record and shall not be subject to discovery or subpoena in a civil or criminal action.
34.3 	(b) Paragraph (a) does not prohibit release by the commissioner of documents and 
34.4 	evidence obtained in an investigation of suspected or actual fraudulent viatical settlement 
34.5 	acts:
34.6 	(1) in administrative or judicial proceedings to enforce laws administered by the 
34.7 	commissioner;
34.8 	(2) to federal, state, or local law enforcement or regulatory agencies, to an 
34.9 	organization established for the purpose of detecting and preventing fraudulent viatical 
34.10 	settlement acts or to the NAIC; or
34.11 	(3) at the discretion of the commissioner, to a person in the business of viatical 
34.12 	settlements that is aggrieved by a fraudulent viatical settlement act.
34.13 	(c) Release of documents and evidence under paragraph (b) does not abrogate or 
34.14 	modify the privilege granted in paragraph (a).
34.15 		Subd. 6.Other law enforcement or regulatory authority. Sections 60A.957 to 
34.16 	60A.9585 shall not:
34.17 	(1) preempt the authority or relieve the duty of other law enforcement or regulatory 
34.18 	agencies to investigate, examine, and prosecute suspected violations of law;
34.19 	(2) prevent or prohibit a person from disclosing voluntarily information concerning 
34.20 	viatical settlement fraud to a law enforcement or regulatory agency other than the 
34.21 	insurance department; or
34.22 	(3) limit the powers granted elsewhere by the laws of this state to the commissioner 
34.23 	or an insurance fraud unit to investigate and examine possible violations of law and to 
34.24 	take appropriate action against wrongdoers.
34.25 		Subd. 7.Viatical settlement antifraud initiatives. (a) Viatical settlement providers 
34.26 	and viatical settlement brokers shall have in place antifraud initiatives reasonably 
34.27 	calculated to detect, prosecute, and prevent fraudulent viatical settlement acts. At the 
34.28 	discretion of the commissioner, the commissioner may order, or a licensee may request 
34.29 	and the commissioner may grant, such modifications of the following required initiatives 
34.30 	as necessary to ensure an effective antifraud program. The modifications may be more or 
34.31 	less restrictive than the required initiatives so long as the modifications may reasonably be 
34.32 	expected to accomplish the purpose of this section.
34.33 	(b) Antifraud initiatives shall include:
34.34 	(1) fraud investigators, who may be viatical settlement provider or viatical settlement 
34.35 	broker employees or independent contractors; and
35.1 	(2) an antifraud plan, which shall be submitted to the commissioner. The antifraud 
35.2 	plan shall include, but not be limited to:
35.3 	(i) a description of the procedures for detecting and investigating possible fraudulent 
35.4 	viatical settlement acts and procedures for resolving material inconsistencies between 
35.5 	medical records and insurance applications;
35.6 	(ii) a description of the procedures for reporting possible fraudulent viatical 
35.7 	settlement acts to the commissioner;
35.8 	(iii) a description of the plan for antifraud education and training of underwriters 
35.9 	and other personnel; and
35.10 	(iv) a description or chart outlining the organizational arrangement of the antifraud 
35.11 	personnel who are responsible for the investigation and reporting of possible fraudulent 
35.12 	viatical settlement acts and investigating unresolved material inconsistencies between 
35.13 	medical records and insurance applications.
35.14 	(c) Antifraud plans submitted to the commissioner shall be privileged and 
35.15 	confidential and shall not be a public record and shall not be subject to discovery or 
35.16 	subpoena in a civil or criminal action.

35.17 	Sec. 14. [60A.9584] CRIMINAL PENALTIES.
35.18 		Subdivision 1.Sentence. A person convicted of a violation of sections 60A.957 
35.19 	to 60A.9585 by a court of competent jurisdiction may be sentenced as follows based on 
35.20 	the greater of (i) the value of property, services, or other benefit wrongfully obtained 
35.21 	or attempted to obtain, or (ii) the aggregate economic loss suffered by any person as 
35.22 	a result of the violation:
35.23 	(1) to imprisonment for not more than 20 years or to payment of a fine of not more 
35.24 	than $100,000, or both, if the value of the viatical settlement contract is more than $35,000;
35.25 	(2) to imprisonment for not more than ten years or to payment of a fine of not more 
35.26 	than $20,000, or both, if the value of the viatical settlement contract is more than $2,500 
35.27 	but not more than $35,000;
35.28 	(3) to imprisonment for not more than five years or to payment of a fine of not 
35.29 	more than $10,000, or both, if the value of the viatical settlement contract is more than 
35.30 	$500 but not more than $2,500; or
35.31 	(4) to imprisonment for not more than one year or to payment of a fine of not more 
35.32 	than $3,000, or both, if the value of the viatical settlement contract is $500 or less.
35.33 	In any prosecution under this section under clauses (1), (2), (3), and (4), the value of 
35.34 	the viatical settlement contracts within any six-month period may be aggregated and the 
35.35 	defendant charged accordingly in applying the provisions of this section; provided that 
36.1 	when two or more offenses are committed by the same person in two or more counties, the 
36.2 	accused may be prosecuted in any county in which one of the offenses was committed 
36.3 	for all of the offenses aggregated under this section. The applicable statute of limitations 
36.4 	provision under chapter 541 shall not begin to run until the insurance company or 
36.5 	law enforcement agency is aware of the fraud, but in no event may the prosecution be 
36.6 	commenced later than seven years after the act has occurred. A person convicted of a 
36.7 	fraudulent viatical settlement act must be ordered to pay restitution to persons aggrieved 
36.8 	by the fraudulent viatical settlement act. Restitution must be ordered in addition to a 
36.9 	fine or imprisonment but not in lieu of a fine or imprisonment. A person convicted of a 
36.10 	violation of sections 60A.957 to 60A.9585 shall be ordered to pay restitution to persons 
36.11 	aggrieved by the violation of sections 60A.957 to 60A.9585. Restitution shall be ordered 
36.12 	in addition to a fine or imprisonment, but not in lieu of a fine or imprisonment.
36.13 		Subd. 2.Nonapplication. Except for a fraudulent viatical settlement act committed 
36.14 	by a viator, the penalties of this section shall not apply to a viator.

36.15 	Sec. 15. [60A.9585] UNFAIR TRADE PRACTICES.
36.16 	A violation of sections 60A.957 to 60A.9585, including the commission of a 
36.17 	fraudulent viatical settlement act, shall be considered an unfair trade practice under 
36.18 	section 72A.20.

36.19 	Sec. 16. Minnesota Statutes 2006, section 60A.964, subdivision 1, is amended to read:
36.20 		Subdivision 1.Amount. The licensing fee for a viatical settlement provider, broker, 
36.21 	or investment agent license is $750 for initial licensure and $250 for each annual renewal. 
36.22 	The fees must be limited to the cost of license administration and enforcement and must 
36.23 	be deposited in the state treasury, credited to a special account, and appropriated to the 
36.24 	commissioner.

36.25 	Sec. 17.  REPEALER.
 36.26 	Minnesota Statutes 2006, sections 13.716, subdivision 7; 60A.961; 60A.962; 
36.27 	60A.963; 60A.965; 60A.966; 60A.967; 60A.968; 60A.969; 60A.970; 60A.971; 60A.972; 
36.28 	60A.973; and 60A.974, are repealed.

36.29 	Sec. 18. EFFECTIVE DATE; APPLICATION.
 36.30 	This act is effective August 1, 2008. A viatical settlement provider, viatical 
36.31 	settlement broker, or viatical settlement investment agent transacting business in this 
36.32 	state may continue to do so pending approval or disapproval of the provider's, broker's, 
37.1 	or investment agent's application for a license as long as the application is filed with the 
37.2 	commissioner by ..........