§ 27-72-14 Fraud prevention and control.[Effective July 1, 2010.]. – (a) Fraudulent life settlement acts, interference and participation ofconvicted felons prohibited.
(1) A person shall not commit a fraudulent life settlementact.
(2) A person shall not knowingly and intentionally interferewith the enforcement of the provisions of this chapter or investigations ofsuspected or actual violations of this chapter.
(3) A person in the business of life settlements shall notknowingly or intentionally permit any person convicted of a felony involvingdishonesty or breach of trust to participate in the business of lifesettlements.
(b) Fraud warning required.
(1) Life settlement contracts and applications for lifesettlement contracts, regardless of the form of transmission, shall contain thefollowing statement or a substantially similar statement:
"Any person who knowingly presents false information in anapplication for insurance or life settlement contract is guilty of a crime andmay be subject to fines and confinement in prison."
(2) The lack of a statement as required in subdivision (1) ofthis subsection does not constitute a defense in any prosecution for afraudulent life settlement act.
(c) Mandatory reporting of fraudulent life settlement acts.
(1) Any person engaged in the business of life settlementshaving knowledge or a reasonable belief that a fraudulent life settlement actsis being, will be or has been committed shall provide to the commissioner theinformation required by, and in a manner prescribed by, the commissioner.
(2) Any other person having knowledge or a reasonable beliefthat a fraudulent life settlement act is being, will be or has been committedmay provide to the commissioner the information required by, and in a mannerprescribed by, the commissioner.
(d) Immunity from liability.
(1) No civil liability shall be imposed on and no cause ofaction shall arise from a person's furnishing information concerning suspected,anticipated or completed fraudulent life settlement acts or suspected orcompleted fraudulent insurance acts, if the information is provided to orreceived from:
(i) The commissioner or the commissioner's employees, agentsor representatives;
(ii) Federal, state or local law enforcement or regulatoryofficials or their employees, agents or representatives;
(iii) A person involved in the prevention and detection offraudulent life settlement acts or that person's agents, employees orrepresentatives;
(iv) Any regulatory body or their employees, agents orrepresentatives, overseeing life insurance, life settlements, securities orinvestment fraud;
(v) The life insurer that issued the life insurance policycovering the life of the insured; or
(vi) The licensee and any agents, employees orrepresentatives.
(2) Subdivision (1) of this subsection shall not apply tostatements made with actual malice. In an action brought against a person forfiling a report or furnishing other information concerning a fraudulent lifesettlement act or a fraudulent insurance act, the party bringing the actionshall plead specifically any allegation that subdivision (1) does not applybecause the person filing the report or furnishing the information did so withactual malice.
(3) A person identified in subdivision (1) shall be entitledto an award of attorney's fees and costs if he or she is the prevailing partyin a civil cause of action for libel, slander or any other relevant tortarising out of activities in carrying out the provisions of this chapter andthe party bringing the action was not substantially justified in doing so. Forpurposes of this section a proceeding is "substantially justified" if it had areasonable basis in law or fact at the time that it was initiated.
(4) This section does not abrogate or modify common law orstatutory privileges or immunities enjoyed by a person described in subdivision(1).
(e) Confidentiality.
(1) The documents and evidence provided pursuant tosubsection (d) of this section or obtained by the commissioner in aninvestigation of suspected or actual fraudulent life settlement acts shall beprivileged and confidential and shall not be a public record and shall not besubject to discovery or subpoena in a civil or criminal action.
(2) Subdivision (1) of this subsection does not prohibitrelease by the commissioner of documents and evidence obtained in aninvestigation of suspected or actual fraudulent life settlement acts:
(i) In administrative or judicial proceedings to enforce lawsadministered by the commissioner;
(ii) To federal, state or local law enforcement or regulatoryagencies, to an organization established for the purpose of detecting andpreventing fraudulent life settlement acts or to the NAIC; or
(iii) At the discretion of the commissioner, to a person inthe business of life settlements that is aggrieved by a fraudulent lifesettlement act.
(3) Release of documents and evidence under subdivision (2)of this subsection does not abrogate or modify the privilege granted insubdivision (1).
(f) Other law enforcement or regulatory authority. Thischapter shall not:
(1) Preempt the authority or relieve the duty of other lawenforcement or regulatory agencies to investigate, examine and prosecutesuspected violations of law;
(2) Preempt, supersede, or limit any provision of any statesecurities law or any rule, order, or notice issued thereunder;
(3) Prevent or prohibit a person from voluntarily disclosinginformation concerning life settlement fraud to a law enforcement or regulatoryagency other than the insurance department; or
(4) Limit the powers granted elsewhere by the laws of thisstate to the commissioner or an insurance fraud unit to investigate and examinepossible violations of law and to take appropriate action against wrongdoers.
(g) Life settlement antifraud initiatives.
(1) Providers and brokers shall have in place antifraudinitiatives reasonably calculated to detect, prosecute and prevent fraudulentlife settlement acts. At the discretion of the commissioner, the commissionermay order, or a licensee may request and the commissioner may grant, suchmodifications of the following required initiatives as necessary to ensure aneffective antifraud program. The modifications may be more or less restrictivethan the required initiatives so long as the modifications may reasonably beexpected to accomplish the purpose of this section. Antifraud initiatives shallinclude:
(i) Fraud investigators, who may be provider or brokeremployees or independent contractors; and
(ii) An antifraud plan, which shall be submitted to thecommissioner. The antifraud plan shall include, but not be limited to:
(A) A description of the procedures for detecting andinvestigating possible fraudulent life settlement acts and procedures forresolving material inconsistencies between medical records and insuranceapplications;
(B) A description of the procedures for reporting possiblefraudulent life settlement acts to the commissioner;
(C) A description of the plan for antifraud education andtraining of underwriters and other personnel; and
(D) A description or chart outlining the organizationalarrangement of the antifraud personnel who are responsible for theinvestigation and reporting of possible fraudulent life settlement acts andinvestigating unresolved material inconsistencies between medical records andinsurance applications.
(2) Antifraud plans submitted to the commissioner shall beprivileged and confidential and shall not be a public record and shall not besubject to discovery or subpoena in a civil or criminal action.
§ 27-72-14 Fraud prevention and control.[Effective July 1, 2010.]. – (a) Fraudulent life settlement acts, interference and participation ofconvicted felons prohibited.
(1) A person shall not commit a fraudulent life settlementact.
(2) A person shall not knowingly and intentionally interferewith the enforcement of the provisions of this chapter or investigations ofsuspected or actual violations of this chapter.
(3) A person in the business of life settlements shall notknowingly or intentionally permit any person convicted of a felony involvingdishonesty or breach of trust to participate in the business of lifesettlements.
(b) Fraud warning required.
(1) Life settlement contracts and applications for lifesettlement contracts, regardless of the form of transmission, shall contain thefollowing statement or a substantially similar statement:
"Any person who knowingly presents false information in anapplication for insurance or life settlement contract is guilty of a crime andmay be subject to fines and confinement in prison."
(2) The lack of a statement as required in subdivision (1) ofthis subsection does not constitute a defense in any prosecution for afraudulent life settlement act.
(c) Mandatory reporting of fraudulent life settlement acts.
(1) Any person engaged in the business of life settlementshaving knowledge or a reasonable belief that a fraudulent life settlement actsis being, will be or has been committed shall provide to the commissioner theinformation required by, and in a manner prescribed by, the commissioner.
(2) Any other person having knowledge or a reasonable beliefthat a fraudulent life settlement act is being, will be or has been committedmay provide to the commissioner the information required by, and in a mannerprescribed by, the commissioner.
(d) Immunity from liability.
(1) No civil liability shall be imposed on and no cause ofaction shall arise from a person's furnishing information concerning suspected,anticipated or completed fraudulent life settlement acts or suspected orcompleted fraudulent insurance acts, if the information is provided to orreceived from:
(i) The commissioner or the commissioner's employees, agentsor representatives;
(ii) Federal, state or local law enforcement or regulatoryofficials or their employees, agents or representatives;
(iii) A person involved in the prevention and detection offraudulent life settlement acts or that person's agents, employees orrepresentatives;
(iv) Any regulatory body or their employees, agents orrepresentatives, overseeing life insurance, life settlements, securities orinvestment fraud;
(v) The life insurer that issued the life insurance policycovering the life of the insured; or
(vi) The licensee and any agents, employees orrepresentatives.
(2) Subdivision (1) of this subsection shall not apply tostatements made with actual malice. In an action brought against a person forfiling a report or furnishing other information concerning a fraudulent lifesettlement act or a fraudulent insurance act, the party bringing the actionshall plead specifically any allegation that subdivision (1) does not applybecause the person filing the report or furnishing the information did so withactual malice.
(3) A person identified in subdivision (1) shall be entitledto an award of attorney's fees and costs if he or she is the prevailing partyin a civil cause of action for libel, slander or any other relevant tortarising out of activities in carrying out the provisions of this chapter andthe party bringing the action was not substantially justified in doing so. Forpurposes of this section a proceeding is "substantially justified" if it had areasonable basis in law or fact at the time that it was initiated.
(4) This section does not abrogate or modify common law orstatutory privileges or immunities enjoyed by a person described in subdivision(1).
(e) Confidentiality.
(1) The documents and evidence provided pursuant tosubsection (d) of this section or obtained by the commissioner in aninvestigation of suspected or actual fraudulent life settlement acts shall beprivileged and confidential and shall not be a public record and shall not besubject to discovery or subpoena in a civil or criminal action.
(2) Subdivision (1) of this subsection does not prohibitrelease by the commissioner of documents and evidence obtained in aninvestigation of suspected or actual fraudulent life settlement acts:
(i) In administrative or judicial proceedings to enforce lawsadministered by the commissioner;
(ii) To federal, state or local law enforcement or regulatoryagencies, to an organization established for the purpose of detecting andpreventing fraudulent life settlement acts or to the NAIC; or
(iii) At the discretion of the commissioner, to a person inthe business of life settlements that is aggrieved by a fraudulent lifesettlement act.
(3) Release of documents and evidence under subdivision (2)of this subsection does not abrogate or modify the privilege granted insubdivision (1).
(f) Other law enforcement or regulatory authority. Thischapter shall not:
(1) Preempt the authority or relieve the duty of other lawenforcement or regulatory agencies to investigate, examine and prosecutesuspected violations of law;
(2) Preempt, supersede, or limit any provision of any statesecurities law or any rule, order, or notice issued thereunder;
(3) Prevent or prohibit a person from voluntarily disclosinginformation concerning life settlement fraud to a law enforcement or regulatoryagency other than the insurance department; or
(4) Limit the powers granted elsewhere by the laws of thisstate to the commissioner or an insurance fraud unit to investigate and examinepossible violations of law and to take appropriate action against wrongdoers.
(g) Life settlement antifraud initiatives.
(1) Providers and brokers shall have in place antifraudinitiatives reasonably calculated to detect, prosecute and prevent fraudulentlife settlement acts. At the discretion of the commissioner, the commissionermay order, or a licensee may request and the commissioner may grant, suchmodifications of the following required initiatives as necessary to ensure aneffective antifraud program. The modifications may be more or less restrictivethan the required initiatives so long as the modifications may reasonably beexpected to accomplish the purpose of this section. Antifraud initiatives shallinclude:
(i) Fraud investigators, who may be provider or brokeremployees or independent contractors; and
(ii) An antifraud plan, which shall be submitted to thecommissioner. The antifraud plan shall include, but not be limited to:
(A) A description of the procedures for detecting andinvestigating possible fraudulent life settlement acts and procedures forresolving material inconsistencies between medical records and insuranceapplications;
(B) A description of the procedures for reporting possiblefraudulent life settlement acts to the commissioner;
(C) A description of the plan for antifraud education andtraining of underwriters and other personnel; and
(D) A description or chart outlining the organizationalarrangement of the antifraud personnel who are responsible for theinvestigation and reporting of possible fraudulent life settlement acts andinvestigating unresolved material inconsistencies between medical records andinsurance applications.
(2) Antifraud plans submitted to the commissioner shall beprivileged and confidential and shall not be a public record and shall not besubject to discovery or subpoena in a civil or criminal action.
§ 27-72-14 Fraud prevention and control.[Effective July 1, 2010.]. – (a) Fraudulent life settlement acts, interference and participation ofconvicted felons prohibited.
(1) A person shall not commit a fraudulent life settlementact.
(2) A person shall not knowingly and intentionally interferewith the enforcement of the provisions of this chapter or investigations ofsuspected or actual violations of this chapter.
(3) A person in the business of life settlements shall notknowingly or intentionally permit any person convicted of a felony involvingdishonesty or breach of trust to participate in the business of lifesettlements.
(b) Fraud warning required.
(1) Life settlement contracts and applications for lifesettlement contracts, regardless of the form of transmission, shall contain thefollowing statement or a substantially similar statement:
"Any person who knowingly presents false information in anapplication for insurance or life settlement contract is guilty of a crime andmay be subject to fines and confinement in prison."
(2) The lack of a statement as required in subdivision (1) ofthis subsection does not constitute a defense in any prosecution for afraudulent life settlement act.
(c) Mandatory reporting of fraudulent life settlement acts.
(1) Any person engaged in the business of life settlementshaving knowledge or a reasonable belief that a fraudulent life settlement actsis being, will be or has been committed shall provide to the commissioner theinformation required by, and in a manner prescribed by, the commissioner.
(2) Any other person having knowledge or a reasonable beliefthat a fraudulent life settlement act is being, will be or has been committedmay provide to the commissioner the information required by, and in a mannerprescribed by, the commissioner.
(d) Immunity from liability.
(1) No civil liability shall be imposed on and no cause ofaction shall arise from a person's furnishing information concerning suspected,anticipated or completed fraudulent life settlement acts or suspected orcompleted fraudulent insurance acts, if the information is provided to orreceived from:
(i) The commissioner or the commissioner's employees, agentsor representatives;
(ii) Federal, state or local law enforcement or regulatoryofficials or their employees, agents or representatives;
(iii) A person involved in the prevention and detection offraudulent life settlement acts or that person's agents, employees orrepresentatives;
(iv) Any regulatory body or their employees, agents orrepresentatives, overseeing life insurance, life settlements, securities orinvestment fraud;
(v) The life insurer that issued the life insurance policycovering the life of the insured; or
(vi) The licensee and any agents, employees orrepresentatives.
(2) Subdivision (1) of this subsection shall not apply tostatements made with actual malice. In an action brought against a person forfiling a report or furnishing other information concerning a fraudulent lifesettlement act or a fraudulent insurance act, the party bringing the actionshall plead specifically any allegation that subdivision (1) does not applybecause the person filing the report or furnishing the information did so withactual malice.
(3) A person identified in subdivision (1) shall be entitledto an award of attorney's fees and costs if he or she is the prevailing partyin a civil cause of action for libel, slander or any other relevant tortarising out of activities in carrying out the provisions of this chapter andthe party bringing the action was not substantially justified in doing so. Forpurposes of this section a proceeding is "substantially justified" if it had areasonable basis in law or fact at the time that it was initiated.
(4) This section does not abrogate or modify common law orstatutory privileges or immunities enjoyed by a person described in subdivision(1).
(e) Confidentiality.
(1) The documents and evidence provided pursuant tosubsection (d) of this section or obtained by the commissioner in aninvestigation of suspected or actual fraudulent life settlement acts shall beprivileged and confidential and shall not be a public record and shall not besubject to discovery or subpoena in a civil or criminal action.
(2) Subdivision (1) of this subsection does not prohibitrelease by the commissioner of documents and evidence obtained in aninvestigation of suspected or actual fraudulent life settlement acts:
(i) In administrative or judicial proceedings to enforce lawsadministered by the commissioner;
(ii) To federal, state or local law enforcement or regulatoryagencies, to an organization established for the purpose of detecting andpreventing fraudulent life settlement acts or to the NAIC; or
(iii) At the discretion of the commissioner, to a person inthe business of life settlements that is aggrieved by a fraudulent lifesettlement act.
(3) Release of documents and evidence under subdivision (2)of this subsection does not abrogate or modify the privilege granted insubdivision (1).
(f) Other law enforcement or regulatory authority. Thischapter shall not:
(1) Preempt the authority or relieve the duty of other lawenforcement or regulatory agencies to investigate, examine and prosecutesuspected violations of law;
(2) Preempt, supersede, or limit any provision of any statesecurities law or any rule, order, or notice issued thereunder;
(3) Prevent or prohibit a person from voluntarily disclosinginformation concerning life settlement fraud to a law enforcement or regulatoryagency other than the insurance department; or
(4) Limit the powers granted elsewhere by the laws of thisstate to the commissioner or an insurance fraud unit to investigate and examinepossible violations of law and to take appropriate action against wrongdoers.
(g) Life settlement antifraud initiatives.
(1) Providers and brokers shall have in place antifraudinitiatives reasonably calculated to detect, prosecute and prevent fraudulentlife settlement acts. At the discretion of the commissioner, the commissionermay order, or a licensee may request and the commissioner may grant, suchmodifications of the following required initiatives as necessary to ensure aneffective antifraud program. The modifications may be more or less restrictivethan the required initiatives so long as the modifications may reasonably beexpected to accomplish the purpose of this section. Antifraud initiatives shallinclude:
(i) Fraud investigators, who may be provider or brokeremployees or independent contractors; and
(ii) An antifraud plan, which shall be submitted to thecommissioner. The antifraud plan shall include, but not be limited to:
(A) A description of the procedures for detecting andinvestigating possible fraudulent life settlement acts and procedures forresolving material inconsistencies between medical records and insuranceapplications;
(B) A description of the procedures for reporting possiblefraudulent life settlement acts to the commissioner;
(C) A description of the plan for antifraud education andtraining of underwriters and other personnel; and
(D) A description or chart outlining the organizationalarrangement of the antifraud personnel who are responsible for theinvestigation and reporting of possible fraudulent life settlement acts andinvestigating unresolved material inconsistencies between medical records andinsurance applications.
(2) Antifraud plans submitted to the commissioner shall beprivileged and confidential and shall not be a public record and shall not besubject to discovery or subpoena in a civil or criminal action.
