[§431E-42]  Fraudulent life settlement actsprohibited.  It is a violation of this chapter for any person, provider,broker, or any other party related to the business of life settlements, tocommit a fraudulent life settlement act.

For the purposes of this section, "fraudulentlife settlement act" includes:

(1)  Acts or omissions committed by any person who,knowingly and with intent to defraud, for the purpose of depriving another ofproperty or for pecuniary gain, commits, or permits its employees or agents toengage in acts including but not limited to:

(A)  Presenting, causing to be presented, orpreparing with knowledge and belief that it will be presented to or by aprovider, premium finance lender, broker, insurer, insurance producer, or anyother person, false material information, or concealing material information,as part of, in support of, or concerning a fact material to one or more of thefollowing:

(i)  An application for the issuance of a policyor life settlement contract;

(ii)  The underwriting of a policy or lifesettlement contract;

(iii)  A claim for payment or benefit pursuant toa policy or life settlement contract;

(iv)  Premiums paid on a policy;

(v)  Payments and changes in ownership orbeneficiary made in accordance with the terms of a policy or life settlementcontract;

(vi)  The reinstatement or conversion of apolicy;

(vii)  In the solicitation, offer to enter into,or effectuation of a policy or life settlement contract;

(viii)  The issuance of written evidence of apolicy or life settlement contract;

(ix)  Any application for or the existence of orany payments related to a loan secured directly or indirectly by any interestin a policy; or

(x)  Entering into any practice or plan thatinvolves stranger-originated life insurance;

(B)  Failing to disclose to the insurer, wherethe insurer requests such disclosure, that the prospective insured hasundergone a life expectancy evaluation by any person or entity other than theinsurer or its authorized representatives in connection with the issuance ofthe policy;

(C)  Employing any device, scheme, or artificeto defraud in the business of life settlements; or

(D)  In the solicitation, application, orissuance of a policy, employing any device, scheme, or artifice in violation ofstate insurable interest laws;

(2)  In the furtherance of a fraud or to prevent thedetection of a fraud, any person commits or permits its employees or its agentsto:

(A)  Remove, conceal, alter, destroy, orsequester from the commissioner the assets or records of a licensee or otherperson engaged in the business of life settlements;

(B)  Misrepresent or conceal the financialcondition of a licensee, financing entity, insurer, or other person;

(C)  Transact the business of life settlementsin violation of laws requiring a license, certificate of authority, or otherlegal authority for the transaction of the business of life settlements;

(D)  File with the commissioner or the chiefinsurance regulatory official of another jurisdiction a document containingfalse information or otherwise concealing information about a material factfrom the commissioner;

(E)  Engage in embezzlement, theft,misappropriation, or conversion of moneys, funds, premiums, credits, or otherproperty of a provider, insurer, insured, owner, insurance, policy owner, orany other person engaged in the business of life settlements or insurance;

(F)  Knowingly and with intent to defraud,enter into, broker, or otherwise deal in a life settlement contract, the subjectof which is a policy that was obtained by presenting false informationconcerning any fact material to the policy or by concealing, for the purpose ofmisleading another, information concerning any fact material to the policy,where the owner or the owner's agent intended to defraud the policy's issuer;

(G)  Attempt to commit, assist, aid, or abet inthe commission of, or conspire to commit the acts or omissions specified inthis definition; or

(H)  Misrepresent the state of residence of anowner to be a state or jurisdiction that does not have a law substantiallysimilar to this chapter for the purpose of evading or avoiding the provisionsof this chapter. [L 2008, c 177, pt of §1]