PART V. 
MISCELLANEOUS PROVISIONS



 



[§431E-41]  Prohibited practices.  (a) 
It is unlawful for any person to:



(1)  Enter into a life settlement contract if the
person knows or reasonably should have known that the policy was obtained by
means of a false, deceptive, or misleading application for such policy;



(2)  Engage in any transaction, practice, or course of
business if the person knows or reasonably should have known that the intent
was to avoid the notice requirements of this chapter;



(3)  Engage in any fraudulent act or practice in
connection with any transaction relating to any life settlement contract
involving an owner who is a resident of this State;



(4)  Issue, solicit, market, or otherwise promote the
purchase of a policy for the purpose of or with an emphasis on settling the
policy;



(5)  Enter into a premium finance agreement with any
person or agency, or any person affiliated with the person or agency, pursuant
to which the person shall receive any proceeds, fees, or other consideration,
directly or indirectly, from the policy or owner of the policy or any other
person with respect to the premium finance agreement or any life settlement
contract or other transaction related to such policy that are in addition to
the amounts required to pay the principal, interest, and service charges
related to policy premiums pursuant to the premium finance agreement or
subsequent sale of such agreement; provided that any payments, charges, fees or
other amounts in addition to the amounts required to pay the principal,
interest, and service charges related to policy premiums paid under the premium
finance agreement shall be remitted to the original owner of the policy or to
the owner's estate if the owner [is] not living at the time of the
determination of the overpayment;



(6)  With respect to any policy or life settlement
contract and a broker, knowingly solicit an offer from, effectuate a life
settlement contract with or make a sale to any provider, financing entity, or
related provider trust that is controlling, controlled by, or under common
control with such broker;



(7)  With respect to any policy or life settlement
contract and a provider, knowingly enter into a life settlement contract with
an owner, if, in connection with such life settlement contract, anything of
value will be paid to a broker that is controlling, controlled by, or under
common control with such provider or the financing entity or related provider
trust that is involved in such life settlement contract;



(8)  With respect to a provider, enter into a life
settlement contract unless the life settlement contract promotional,
advertising, and marketing materials, as may be prescribed by rule, have been
filed with the commissioner.  In no event shall any marketing materials
expressly reference that the insurance is "free" for any period of
time.  The inclusion of any reference in the marketing materials that would
cause an owner to reasonably believe that the insurance is free for any period
of time shall be considered a violation of this chapter;



(9)  With respect to any life insurance producer,
insurance company, broker, or provider, make any statement or representation to
the applicant or policyholder in connection with the sale or financing of a
policy to the effect that the insurance is free or without cost to the
policyholder for any period of time unless provided in the policy;



(10)  Knowingly and intentionally interfere with the
enforcement of the provisions of this chapter or investigations of suspected or
actual violations of this chapter; and



(11)  With respect to a person in the business of life
settlements, knowingly or intentionally permit any person convicted of a felony
involving dishonesty or breach of trust to participate in the business of life
settlements.



(b)  A violation of this section shall be
deemed a fraudulent life settlement act. [L 2008, c 177, pt of §1]