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USA Statutes : maine
Title : Title 24-A. MAINE INSURANCE CODE
Chapter : Chapter 85. VIATICAL AND LIFE SETTLEMENTS ACT (HEADING. PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
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Title 24-A - §6801. Short title
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6801. Short title
This chapter may be known and cited as the "Viatical and Life Settlements Act."
[2003, c. 636, §3 (amd).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6802-A. Definitions
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6802-A. Definitions
As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.
[2003, c. 636, §5 (new).]
1. Advertising. "Advertising" means any written, electronic or printed communication or any communication by means of recorded telephone
messages or transmitted on radio, television, the Internet or a similar communications medium, including film strips, motion
pictures and videos, published, disseminated, circulated or placed before the public, directly or indirectly, for the purpose
of creating an interest in or inducing a person to sell a life insurance policy pursuant to a settlement contract.
[2003, c. 636, §5 (new).]
2. Business of settlements. "Business of settlements" means any activity involved in, but not limited to, the offering, solicitation, negotiation, procurement,
effectuation, purchasing, financing, monitoring, tracking, underwriting, selling, transferring, assigning, pledging, hypothecating
or in any other manner engaging in the business of settlement contracts.
[2003, c. 636, §5 (new).]
3. Chronically ill. "Chronically ill" means:
A. Being unable to perform at least 2 activities of daily living, including, but not limited to, eating, moving from one place
to another, bathing, dressing, voiding the bladder, eliminating the bowel or maintaining continence;
[2003, c. 636, §5 (new).]
B. Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment;
or
[2003, c. 636, §5 (new).]
C. Having a level of disability similar to that described in paragraph A, as determined by the United States Secretary of Health
and Human Services.
[2003, c. 636, §5 (new).]
[2003, c. 636, §5 (new).]
4. Financing entity. "Financing entity" means an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate
from a settlement provider, credit enhancer or any entity that has a direct ownership in a policy or certificate that is the
subject of a settlement contract:
A. Whose principal activity related to the transaction is providing funds to effect the settlement or purchase of one or more
purchased policies or to provide credit enhancement; and
[2003, c. 636, §5 (new).]
B. Who has an agreement in writing with one or more licensed settlement providers to finance the acquisition of settlement
contracts or to provide stop loss insurance.
[2003, c. 636, §5 (new).]
"Financing entity" does not include a nonaccredited investor.
[2003, c. 636, §5 (new).]
5. Financing transaction. "Financing transaction" means any transaction in which a licensed settlement provider obtains financing for the purchase,
acquisition, transfer or other assignment of one or more settlement contracts or policies acquired pursuant to a settlement
contract or interests therein, including, without limitation, any secured or unsecured financing, securitization transaction
or securities offering, either registered or exempt from registration under federal and state securities law, or otherwise
sells, assigns, transfers, pledges, hypothecates or otherwise disposes of a settlement contract or policy acquired pursuant
to a settlement contract or interest therein.
[2003, c. 636, §5 (new).]
6. Fraudulent viatical or life settlement act. "Fraudulent viatical or life settlement act" includes:
A. Acts or omissions committed by any person who, knowingly or with intent to defraud, for the purpose of depriving another
of property or for pecuniary gain, commits, or permits its employees or its agents to engage in, acts including:
(1) Presenting, causing to be presented or preparing with knowledge or belief that it will be presented to or by a settlement
provider, settlement producer, financing entity, insurer, insurance producer or any other person false material information,
or concealing material information, as part of, in support of or concerning a fact material to one or more of the following:
(a) An application for the issuance of a settlement contract or insurance policy;
(b) The underwriting of a settlement contract or insurance policy;
(c) A claim for payment or benefit pursuant to a settlement contract or insurance policy;
(d) Premiums paid on an insurance policy;
(e) Payments and changes in ownership or beneficiary made in accordance with the terms of a settlement contract or insurance
policy;
(f) The reinstatement or conversion of an insurance policy;
(g) The solicitation, offer, effectuation or sale of a settlement contract or insurance policy;
(h) The issuance of written evidence of a settlement contract or insurance policy; or
(i) A financing transaction; or
(2) Employing any device, scheme or artifice to defraud related to policies acquired pursuant to a settlement contract;
[2003, c. 636, §5 (new).]
B. In the furtherance of a fraud or to prevent the detection of a fraud committing or permitting one's employees or agents
to:
(1) Remove, conceal, alter, destroy or sequester from the superintendent the assets or records of a licensee or other person
engaged in the business of settlements;
(2) Misrepresent or conceal the financial condition of a licensee, financing entity, insurer or other person;
(3) Transact the business of settlements in violation of laws requiring a license, certificate of authority or other legal
authority for the transaction of the business of settlements; or
(4) File with the superintendent or the chief insurance regulatory official of another jurisdiction a document containing
false information or otherwise concealing information about a material fact from the superintendent;
[2003, c. 636, §5 (new).]
C. Embezzlement, theft, misappropriation or conversion of money, funds, premiums, credits or other property of a settlement
provider, insurer, insured, viator, insurance policyowner or any other person engaged in the business of settlements or insurance;
[2003, c. 636, §5 (new).]
D. Recklessly entering into, brokering or otherwise dealing in a settlement contract, the subject of which is a life insurance
policy that was obtained by presenting false information concerning any fact material to the policy or by concealing, for
the purpose of misleading another, information concerning any fact material to the policy, when the viator or the viator's
agent intended to defraud the policy's issuer. For the purposes of this paragraph, "recklessly" means engaging in conduct
in consciously and clearly unjustifiable disregard of a substantial likelihood of the existence of the relevant facts or risks,
such disregard involving a gross deviation from acceptable standards of conduct; or
[2003, c. 636, §5 (new).]
E. Attempting to commit; assisting, aiding or abetting in the commission of; or conspiring to commit the acts or omissions
specified in this subsection.
[2003, c. 636, §5 (new).]
[2003, c. 636, §5 (new).]
7. Policy. "Policy" means an individual or group policy, group certificate, contract or arrangement of life insurance affecting the
rights of a resident of this State or bearing a reasonable relation to this State, regardless of whether delivered or issued
for delivery in this State.
[2003, c. 636, §5 (new).]
8. Related provider trust. "Related provider trust" means a titling trust or other trust established by a licensed settlement provider or a financing
entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing
transaction. The trust must have a written agreement with the licensed settlement provider under which the licensed settlement
provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees
to make all records and files related to settlement transactions available to the superintendent as if those records and files
were maintained directly by the licensed settlement provider.
[2003, c. 636, §5 (new).]
9. Settlement contract. "Settlement contract" means:
A. A written agreement establishing the terms under which compensation or anything of value will be paid, which compensation
or value is less than the expected death benefit of the insurance policy or certificate, in return for the viator's assignment,
transfer, sale, devise or bequest of the death benefit or ownership of any portion of the insurance policy or certificate
of insurance;
[2003, c. 636, §5 (new).]
B. A contract for a loan or other financing transaction with a viator secured primarily by an individual or group life insurance
policy other than a loan by a life insurance company pursuant to the terms of the life insurance contract or a loan secured
by the cash value of a policy; or
[2003, c. 636, §5 (new).]
C. An agreement with a viator to transfer ownership or change the beneficiary designation at a later date regardless of the
date that compensation is paid to the viator.
[2003, c. 636, §5 (new).]
For purposes of this chapter, the individual insured who is the subject of the insurance policy or certificate of insurance
does not have to be diagnosed as terminally ill or chronically ill at the time a settlement contract is executed.
[2003, c. 636, §5 (new).]
10. Settlement producer. "Settlement producer" means any person who has life insurance producer authority, who acts or aids in any manner in the
soliciting of a settlement on behalf of a viator and for a fee, commission or other valuable consideration offers or attempts
to negotiate settlement contracts between a viator and one or more settlement providers. "Settlement producer" does not include
an attorney, accountant, financing entity or person exercising a power of attorney granted by the viator retained to represent
the viator and whose compensation is paid solely by the viator without regard to whether the settlement is effected. "Settlement
producer" does not include a credit union or an employer or association that makes its employees or members aware of settlement
contracts. Irrespective of the manner in which the settlement producer is compensated, a settlement producer is deemed to
represent only the interests of the viator and owes a fiduciary duty to the viator.
[2003, c. 636, §5 (new).]
11. Settlement provider. "Settlement provider" means a person other than the viator that enters into or effectuates a settlement contract. "Settlement
provider" does not include:
A. A supervised lender, as defined in Title 9-A, section 1-301, subsection 39, that takes an assignment of a life insurance
policy as collateral for a loan;
[2003, c. 636, §5 (new).]
B. The issuer of a life insurance policy providing accelerated benefits under section 2555 and pursuant to the contract;
[2003, c. 636, §5 (new).]
C. An authorized or eligible insurer that provides stop-loss coverage to a settlement provider, purchaser, financing entity,
special purpose entity or related provider trust;
[2003, c. 636, §5 (new).]
D. A viator's friend or family member or other natural person who enters into no more than one agreement in a calendar year
for the assignment, transfer, sale, devise or bequest of a life insurance policy for any value less than the expected death
benefit;
[2003, c. 636, §5 (new).]
E. A financing entity;
[2003, c. 636, §5 (new).]
F. A special purpose entity;
[2003, c. 636, §5 (new).]
G. A related provider trust; or
[2003, c. 636, §5 (new).]
H. An accredited investor or qualified institutional buyer as defined respectively in Regulation D, Rule 501 and Rule 144A
of the Federal Securities Act of 1933, as amended, and who acquires a policy from a settlement provider.
[2003, c. 636, §5 (new).]
[2003, c. 636, §5 (new).]
12. Special purpose entity. "Special purpose entity" means a corporation, partnership, trust, limited liability company or similar entity formed solely
to provide either directly or indirectly access to institutional capital markets for a financing entity or licensed settlement
provider.
[2003, c. 636, §5 (new).]
13. Terminally ill. "Terminally ill" means having an illness or sickness that can reasonably be expected to result in death within 24 months
or less.
[2003, c. 636, §5 (new).]
14. Viator. "Viator" means a person who assigns, transfers, sells, devises or bequeaths or seeks to assign, transfer, sell, devise or
bequeath a death benefit or ownership of a life insurance policy or certificate under a settlement contract. "Viator" does
not include:
A. A settlement provider licensed under this chapter;
[2003, c. 636, §5 (new).]
B. An accredited investor or qualified institutional buyer as defined respectively in Regulation D, Rule 501 and Rule 144A
of the Federal Securities Act of 1933, as amended;
[2003, c. 636, §5 (new).]
C. A financing entity;
[2003, c. 636, §5 (new).]
D. A special purpose entity; or
[2003, c. 636, §5 (new).]
E. A related provider trust.
[2003, c. 636, §5 (new).]
[2003, c. 636, §5 (new).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6802. Definitions (REPEALED)
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6802. Definitions (REPEALED)
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6803. Settlement provider and producer license; license requirements
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6803. Settlement provider and producer license; license requirements
1. License required. Licenses are required in accordance with this subsection.
A. A person may not act as a settlement provider without a license from the superintendent issued pursuant to this section
and subject to the provisions of this chapter.
[2003, c. 636, §6 (amd).]
B. A person may not perform the functions of, or otherwise act as, a settlement producer without a license from the superintendent
as a life insurance producer.
[2003, c. 636, §6 (amd).]
C.
[2003, c. 636, §6 (rp).]
C-1. If there is more than one viator on a single policy and the viators are residents of different states, the settlement contract
is governed by the law of the state in which the viator having the largest percentage ownership resides or, if the viators
hold equal ownership, the state of residence of one viator agreed upon in writing by all viators.
[2003, c. 636, §6 (new).]
D.
[2003, c. 636, §6 (rp).]
E.
[2003, c. 636, §6 (rp).]
[2003, c. 636, §6 (amd).]
2. Application; fee. Application for a settlement provider license must be made to the superintendent by the applicant on a form prescribed by
the superintendent. The application must be accompanied by a fee not to exceed $400 in accordance with section 601.
[2003, c. 636, §6 (amd).]
3. Renewal. A license for a settlement provider is continuous as long as the licensee remains qualified. The settlement provider must
pay an annual fee not to exceed $400 in accordance with section 601. Failure to pay the fee within the terms prescribed may
result in the revocation of the license unless cured within 5 days of written notice of failure to pay to the principal office
of the licensee.
[2003, c. 636, §6 (amd).]
4. Information required. The applicant for a settlement provider license shall provide such information as the superintendent requires and the information
must be submitted on forms required by the superintendent. The superintendent may at any time require the applicant to disclose
fully the identity of all stockholders except stockholders owning less than 5% of the shares of an applicant whose shares
are publicly traded, partners, officers, directors, members and employees and the superintendent may, in the exercise of the
superintendent's discretion, refuse to issue a license to an applicant if not satisfied that any stockholder, partner, director,
member or employee of the applicant who may materially influence the applicant's conduct meets the criteria set forth in subsection
6. A settlement provider shall provide to the superintendent new or revised information about officers, stockholders controlling
10% or more of stock, partners, directors, members or designated employees within 30 days of the change.
[2003, c. 636, §6 (amd).]
5. Authority under license. A settlement provider license issued to any person authorizes all officers, partners, directors, members and key management
personnel of that person to act on behalf of the settlement provider, unless such activity requires a license under another
provision of this Title. All officers, partners, directors, members and key management personnel of the person must be named
in the application and any supplements to the application.
[2003, c. 636, §6 (amd).]
6. Investigation. Upon the filing of an application and the payment of the settlement provider license fee, the superintendent shall make
an investigation of the applicant and shall issue a license if the superintendent finds that the applicant:
A. Has provided a detailed plan of operation;
[1997, c. 430, §1 (new); §2 (aff).]
B. Is competent and trustworthy and intends to act in good faith in the capacity of a settlement provider;
[2003, c. 636, §6 (amd).]
C. Has a good business reputation and has had experience, training or education so as to be qualified as a settlement provider;
[2003, c. 636, §6 (amd).]
D. If organized under the laws of this State, has provided a certificate of good standing from this State. If the applicant
is a foreign entity, it must provide a certificate of good standing from its state of organization and a certificate of good
standing from this State;
[2003, c. 636, §6 (amd).]
E. Has no officer, partner, director, member or key management personnel of the applicant that has been found guilty of, or
has pleaded guilty or nolo contendere to, any crime involving fraud or moral turpitude, regardless of whether a judgment of
conviction has been entered by the court; and
[2003, c. 636, §6 (amd).]
F. Has provided an antifraud plan that meets the requirements of section 6818.
[2003, c. 636, §6 (new).]
[2003, c. 636, §6 (amd).]
7. Financial responsibility. Evidence of financial responsibility must be provided to the superintendent in accordance with this subsection.
A. A settlement provider shall provide evidence of financial accountability. Such evidence may include, but is not limited
to, a binding and committed lending facility of at least $1,000,000 with a term of at least one year or a net worth in excess
of $100,000.
[2003, c. 636, §6 (amd).]
[2003, c. 636, §6 (amd).]
8. Nonresidents. The superintendent may not issue a settlement provider license to a nonresident applicant unless a written designation of
an agent for service of process is filed and maintained with the superintendent or the applicant has filed with the superintendent
the applicant's written irrevocable consent that any action against the applicant may be commenced against the applicant by
service of process on the superintendent.
[2003, c. 636, §6 (amd).]
9. List. The superintendent shall maintain a complete list of all settlement providers licensed or with license pending in this State.
The list must be available upon request to the general public.
[2003, c. 636, §6 (amd).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6804. License revocation and administrative assessments
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6804. License revocation and administrative assessments
1. Superintendent's authority.
[2003, c. 636, §7 (rp).]
1-A. Superintendent's authority. The superintendent may deny, suspend, revoke or refuse to renew the license of a settlement provider if the superintendent
finds just cause to do so, which may include, but is not limited to, a finding that:
A. There was any material misrepresentation in the application for the license or other information submitted to the superintendent;
[2003, c. 636, §7 (new).]
B. The licensee or any officer, partner, director, member or key management personnel of the licensee has been convicted of
fraudulent or dishonest practices, is subject to a final administrative action to suspend or revoke a settlement provider
license or is otherwise shown to be untrustworthy or incompetent to act as a settlement provider;
[2003, c. 636, §7 (new).]
C. The licensee as a settlement provider demonstrates an unreasonable pattern of payments to viators;
[2003, c. 636, §7 (new).]
D. The licensee or any officer, partner, director, member or key management personnel of the licensee has been found guilty
of, or has pleaded guilty or nolo contendere to, any crime involving fraud or moral turpitude, regardless of whether a judgment
of conviction has been entered by the court;
[2003, c. 636, §7 (new).]
E. The settlement provider has entered into any settlement contract that has not been approved pursuant to this chapter;
[2003, c. 636, §7 (new).]
F. The settlement provider has failed to honor contractual obligations set out in a settlement contract;
[2003, c. 636, §7 (new).]
G. The settlement provider no longer meets the requirements for initial licensure;
[2003, c. 636, §7 (new).]
H. The settlement provider has assigned, transferred or pledged a policy acquired pursuant to a settlement contract to a person
other than a settlement provider licensed in this State, an accredited investor or qualified institutional buyer as defined
respectively in Regulation D, Rule 501 and Rule 144A of the Federal Securities Act of 1933, as amended, a financing entity,
a special purpose entity or a related provider trust; or
[2003, c. 636, §7 (new).]
I. The licensee has violated any of the provisions of this chapter or any rules adopted pursuant to this chapter.
[2003, c. 636, §7 (new).]
[2003, c. 636, §7 (new).]
2. Hearing. Before the superintendent may deny a license application or suspend, revoke or refuse to renew the license of a settlement
provider, the licensee or applicant has an opportunity for a hearing in accordance with Title 5, chapter 375, subchapter 4.
[2003, c. 636, §7 (amd).]
3. Administrative penalty. The superintendent may, in addition to denying a license application or suspending or revoking a license, assess an administrative
civil forfeiture of $500 for each willful violation of this chapter. This section may not be construed to diminish the penalties
available for any violation of chapter 23, in addition to any penalties authorized under section 12-A.
[1997, c. 430, §1 (new); §2 (aff).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6805. Approval of settlements contracts; disclosure statements and applications
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6805. Approval of settlements contracts; disclosure statements and applications
A person may not use any contract, disclosure statement or application form with a viator who is a resident of this State
unless it has been filed with and approved by the superintendent, pursuant to sections 2412 and 2413. The superintendent
shall disapprove a settlement contract form or disclosure statement form if, in the superintendent's opinion, the contract
or provisions contained therein are unreasonable, contrary to the interests of the public or otherwise misleading or unfair
to the viator. All such forms must be approved or denied by the superintendent within 60 calendar days following receipt
of submission by the superintendent.
[2003, c. 636, §8 (amd).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6806. Reporting requirements; confidentiality of information
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6806. Reporting requirements; confidentiality of information
1. Annual report. A settlement provider licensee shall file with the superintendent by March 1st of each year an annual statement containing
such information as the superintendent prescribes by rule. The superintendent may not adopt any rule that requires the submission
of information that permits the identification of a viator or relates to transactions when the viator is not a resident of
this State. The superintendent may not request, collect or compile personal information that identifies any viator or insured
except in connection with the investigation of a specific complaint and with the prior written permission of the viator or
insured or the viator's or insured's estate or representative to collect that information.
[2003, c. 636, §9 (amd).]
1-A. Fee for filing annual report. The fee for filing the annual report is the same as for an insurer as provided in section 601. On or before July 1st of
each year, the superintendent shall forward to each settlement provider an itemized bill for the amount due for the filing
of the annual statement and the amount due for the certificate of authority annual fee.
[2003, c. 636, §9 (amd).]
2. Privacy protection. Except as otherwise required or permitted by law, a settlement provider, settlement producer, insurance company, insurance
producer, independent insurance producer, information bureau, rating company or any other person with actual knowledge of
the identity of a viator, or of the insured if other than the viator, may not disclose that identity, or the insured's financial
or medical information, to any other person unless the disclosure:
A. Is necessary to effectuate a settlement contract between the viator and a settlement provider and the viator and the insured
have provided prior written consent to the disclosure;
[2003, c. 636, §9 (amd).]
B. Is provided in response to an investigation or examination by the superintendent or any other government officer or agency
pursuant to section 6807;
[2003, c. 636, §9 (amd).]
C. Is necessary to permit a financing entity, related provider trust or special purpose entity to finance the purchase of policies
by a settlement provider and the viator and insured have provided prior written consent to the disclosure;
[2003, c. 636, §9 (amd).]
D. Is a term or condition to the transfer of a policy by one settlement provider to another settlement provider;
[2003, c. 636, §9 (new).]
E. Is necessary to allow the settlement provider or insurance producer or an authorized representative to make contacts for
the purpose of determining health status; or
[2003, c. 636, §9 (new).]
F. Is required to purchase stop-loss coverage.
[2003, c. 636, §9 (new).]
[2003, c. 636, §9 (amd).]
3. Sale or transfer.
[2003, c. 636, §9 (rp).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6807. Examinations and investigations
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6807. Examinations and investigations
1. Complaint.
[2003, c. 636, §10 (rp).]
1-A. Examinations. The superintendent may conduct examinations in accordance with this subsection.
A. The superintendent may conduct an examination under this chapter of a licensee as often as the superintendent in the superintendent's
sole discretion considers appropriate.
[2003, c. 636, §10 (new).]
B. For purposes of completing an examination of a licensee under this chapter, subject to the provisions of section 6806, the
superintendent may examine or investigate any person, or the business of any person, insofar as the examination or investigation
is, in the sole discretion of the superintendent, considered necessary or material to the examination of the licensee.
[2003, c. 636, §10 (new).]
C. In lieu of an examination under this chapter of any foreign or alien licensee licensed in this State, the superintendent
may, at the superintendent's discretion, accept an examination report on the licensee as prepared by the superintendent of
insurance for the licensee's state of domicile or port-of-entry state.
[2003, c. 636, §10 (new).]
[2003, c. 636, §10 (new).]
2. Confidential information.
[2003, c. 636, §10 (rp).]
3. Records. Records of all settlement transactions must be maintained by the settlement provider licensee in accordance with this subsection.
A. A settlement provider required to be licensed by this chapter shall retain for 5 years copies of all:
(1) Proposed, offered or executed settlement contracts, settlement purchase agreements, underwriting documents, policy forms
and applications from the date of the proposal, offer or execution of the settlement contract or settlement purchase agreement,
whichever is later;
(2) Checks, drafts or other evidence and documentation related to the payment, transfer, deposit or release of funds from
the date of the transaction; and
(3) Other records and documents related to the requirements of this chapter.
[2003, c. 636, §10 (new).]
B. This subsection does not relieve a settlement provider licensee of the obligation to produce these documents to the superintendent
after the retention period has expired if the person has retained the documents.
[2003, c. 636, §10 (new).]
C. Subject to the provisions of section 6806, records required to be retained by this subsection must be legible and complete
and may be retained in paper, photographic, microprocess, magnetic, mechanical or electronic media or by any process that
accurately reproduces or forms a durable medium for the reproduction of a record.
[2003, c. 636, §10 (new).]
[2003, c. 636, §10 (amd).]
4. Immunity. A cause of action may not arise against any person for the act of communicating or delivering information or data to the
superintendent or the superintendent's authorized representative or examiner pursuant to an examination made under this chapter
if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.
This subsection does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed
by the superintendent, the superintendent's authorized representatives or any examiner appointed by the superintendent.
A. A cause of action may not arise against the superintendent, the superintendent's authorized representatives or any examiner
appointed by the superintendent for any statements made or conduct performed in good faith while carrying out the provisions
of this chapter.
[2003, c. 636, §10 (new).]
B. A cause of action may not arise against any person for the act of communicating or delivering information or data to the
superintendent or the superintendent's authorized representative or examiner pursuant to an examination made under this chapter
if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.
This paragraph does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed
by any person identified in paragraph A.
[2003, c. 636, §10 (new).]
C. A person identified in paragraph A or B is entitled to an award of attorney's fees and costs if that person is the prevailing
party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out the
provisions of this chapter and the party bringing the action was not substantially justified in doing so. For purposes of
this paragraph, a proceeding is "substantially justified" if the proceeding had a reasonable basis in law or fact at the time
that it was initiated.
[2003, c. 636, §10 (new).]
[2003, c. 636, §10 (amd).]
5. Conduct of examinations. The following provisions govern the conduct of examinations.
A. Upon determining that an examination should be conducted, the superintendent shall issue an examination warrant appointing
one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the
examination, the examiner shall observe those guidelines and procedures as the superintendent considers appropriate.
[2003, c. 636, §10 (new).]
B. Every licensee or person from whom information is sought and its officers, directors and agents shall provide to the examiners
timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents,
assets and computer or other recordings relating to the property, assets, business and affairs of the licensee or person being
examined. The officers, directors, employees and agents of the licensee or person shall facilitate the examination and aid
in the examination insofar as it is in their power to do so. The refusal of a licensee, by its officers, directors, employees
or agents, to submit to examination or to comply with any reasonable written request of the superintendent is grounds for
suspension or refusal of, or nonrenewal of, any license or authority held by the licensee to engage in the business of settlements
or other business subject to the superintendent's jurisdiction. Any proceedings for suspension, revocation or refusal of
any license or authority must be conducted pursuant to Title 5, chapter 375, subchapter 4.
[2003, c. 636, §10 (new).]
C. The superintendent has the power to issue subpoenas, to administer oaths and to examine under oath any person as to any
matter pertinent to the examination. Upon the failure or refusal of a person to obey a subpoena, the superintendent may petition
a court of competent jurisdiction and, upon proper showing, the court may enter an order compelling the witness to appear
and testify or produce documentary evidence. Failure to obey the court order is punishable as contempt of court.
[2003, c. 636, §10 (new).]
D. When making an examination under this chapter, the superintendent may retain attorneys, appraisers, independent actuaries,
independent certified public accountants or other professionals or specialists as examiners, the reasonable cost of which
must be borne by the licensee that is the subject of the examination.
[2003, c. 636, §10 (new).]
E. This chapter may not be construed to limit the superintendent's authority to terminate or suspend an examination in order
to pursue other legal or regulatory action pursuant to the insurance laws of this State. Findings of fact and conclusions
made pursuant to any examination are prima facie evidence in any legal or regulatory action.
[2003, c. 636, §10 (new).]
F. This chapter may not be construed to limit the superintendent's authority to use and, if appropriate, to make public any
final or preliminary examination report, any examiner or licensee workpapers or other documents or any other information discovered
or developed during the course of any examination in the furtherance of any legal or regulatory action that the superintendent
may, in the superintendent's sole discretion, consider appropriate.
[2003, c. 636, §10 (new).]
[2003, c. 636, §10 (new).]
6. Examination reports. Examination reports may be composed only of facts appearing upon the books, records or other documents of the licensee or
its agents or other persons examined or as ascertained from the testimony of its officers or agents or other persons examined
concerning its affairs and of such conclusions and recommendations as the examiners find reasonably warranted from the facts.
No later than 60 days following completion of the examination, the examiner in charge shall file under oath with the superintendent
a verified written report of examination. Upon receipt of the verified report, the superintendent shall transmit the report
to the licensee examined, together with a notice that affords the licensee examined a reasonable opportunity of not more than
30 days to make a written submission or rebuttal with respect to any matters contained in the examination report. In the event
the superintendent determines that regulatory action is appropriate as a result of an examination, the superintendent may
initiate any proceedings or actions provided by law.
[2003, c. 636, §10 (new).]
7. Confidentiality of examination information. The disclosure of information is governed by this subsection.
A. Names and individual identification data for all viators and insured persons are considered private and confidential information
and may not be disclosed by the superintendent, unless required by law.
[2003, c. 636, §10 (new).]
B. Except as otherwise provided in this chapter, all examination reports, workpapers, recorded information, documents and copies
thereof produced by, obtained by or disclosed to the superintendent or any other person in the course of an examination made
under this chapter, or in the course of analysis or investigation by the superintendent of the financial condition or market
conduct of a licensee, are confidential by law and privileged, are not subject to subpoena and are not subject to discovery
or admissible in evidence in any private civil action. The superintendent is authorized to use the documents, materials or
other information in the furtherance of any regulatory or legal action brought as part of the superintendent's official duties.
For the purposes of this paragraph and paragraph C, "chapter" includes the law of another state or jurisdiction that is substantially
similar to this chapter.
[2003, c. 636, §10 (new).]
C. Documents, materials or other information, including, but not limited to, all workpapers and copies thereof, in the possession
or control of the National Association of Insurance Commissioners, or its successor organization, and its affiliates and subsidiaries
are confidential by law and privileged, are not subject to subpoena and are not subject to discovery or admissible in evidence
in any private civil action if they are:
(1) Created, produced or obtained by or disclosed to the National Association of Insurance Commissioners, or its successor
organization, and its affiliates and subsidiaries in the course of assisting an examination made under this chapter or assisting
a superintendent in the analysis or investigation of the financial condition or market conduct of a licensee; or
(2) Disclosed to the National Association of Insurance Commissioners, or its successor organization, and its affiliates and
subsidiaries under paragraph D by a superintendent.
[2003, c. 636, §10 (new).]
D. The superintendent and any person that receives documents, material or other information while acting under the authority
of the superintendent, including the National Association of Insurance Commissioners, or its successor organization, and its
affiliates and subsidiaries, may not testify in any private civil action concerning any confidential documents, materials
or information subject to paragraph A.
[2003, c. 636, §10 (new).]
E. In order to assist in the performance of the superintendent's duties, the superintendent:
(1) May share documents, materials or other information, including the confidential and privileged documents, materials or
information subject to paragraph A, with other state, federal and international regulatory agencies, with the National Association
of Insurance Commissioners, or its successor organization, and its affiliates and subsidiaries and with state, federal and
international law enforcement authorities, as long as the recipient agrees to maintain the confidentiality and privileged
status of the documents, materials, communication or other information; and
(2) May receive documents, materials, communications or information, including otherwise confidential and privileged documents,
materials or information, from the National Association of Insurance Commissioners, or its successor organization, and its
affiliates and subsidiaries and from regulatory and law enforcement officials of foreign or other domestic jurisdictions and
shall maintain as confidential or privileged any document, material or information received with notice or the understanding
that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or
information.
[2003, c. 636, §10 (new).]
F. A waiver of any applicable privilege or claim of confidentiality in the documents, materials or information does not occur
as a result of disclosure to the superintendent under this section or as a result of sharing as authorized in paragraph E.
[2003, c. 636, §10 (new).]
G. A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established
under this subsection is available and enforced in any proceeding in, and in any court of, this State.
[2003, c. 636, §10 (new).]
H. This chapter may not prevent or be construed as prohibiting the superintendent from disclosing the content of an examination
report or preliminary examination report or results, or any matter relating thereto, to the superintendent of insurance of
any other state or country or to law enforcement officials of this State or any other state or an agency of the Federal Government
at any time or to the National Association of Insurance Commissioners, or its successor organization, as long as such agency
or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent
with this chapter.
[2003, c. 636, §10 (new).]
[2003, c. 636, §10 (new).]
8. Conflict of interest. The following provisions apply.
A. An examiner may not be appointed by the superintendent if the examiner, either directly or indirectly, has a conflict of
interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this
chapter. This section may not be construed to automatically preclude an examiner from being:
(1) A viator;
(2) An insured in an insurance policy acquired pursuant to a settlement contract; or
(3) A beneficiary in an insurance policy that is proposed to be acquired pursuant to a settlement contract.
[2003, c. 636, §10 (new).]
B. Notwithstanding the requirements of this subsection, the superintendent may retain from time to time, on an individual basis,
qualified actuaries, certified public accountants or similar individuals who are independently practicing their professions,
even though these persons may from time to time be similarly employed or retained by persons subject to examination under
this chapter.
[2003, c. 636, §10 (new).]
[2003, c. 636, §10 (new).]
9. Investigative authority of superintendent. In addition to the authority granted pursuant to section 220, the superintendent may investigate persons engaged in the business
of settlements and persons suspected of engaging in fraudulent viatical or life settlement acts.
[2003, c. 636, §10 (new).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6808-A. Contact with insured; additional disclosures
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6808-A. Contact with insured; additional disclosures
1. Contact with insured. The insured may be contacted by either the settlement provider or its authorized representative for the purpose of determining
the insured's health status. This contact is limited to once every 3 months if the insured has a life expectancy of more than
one year and no more than once per month if the insured has a life expectancy of one year or less.
[2003, c. 636, §11 (new).]
2. Additional disclosures. A settlement provider shall provide the viator with at least the following disclosures no later than the date the settlement
contract is signed by all parties. The disclosures must be conspicuously displayed in the settlement contract or in a separate
document signed by the viator and the settlement provider or settlement producer and must provide the following information:
A. The affiliation, if any, between the settlement provider and the issuer of the insurance policy to be acquired pursuant
to a settlement contract;
[2003, c. 636, §11 (new).]
B. The name, address and telephone number of the settlement provider;
[2003, c. 636, §11 (new).]
C. If an insurance policy to be purchased has been issued as a joint policy or involves family riders or any coverage of a
life other than the insured's under the policy to be purchased, information regarding the possible loss of coverage on the
other lives under the policy and advice to consult with the viator's insurance producer or the insurer issuing the policy
for advice on the proposed settlement;
[2003, c. 636, §11 (new).]
D. The dollar amount of the current death benefit payable to the settlement provider under the policy or certificate. If known,
the settlement provider shall also disclose the availability of any additional guaranteed insurance benefits, the dollar amount
of any accidental death and dismemberment benefits under the policy or certificate and the settlement provider's interest
in those benefits; and
[2003, c. 636, §11 (new).]
E. The name, business address and telephone number of the independent 3rd-party escrow agent and the fact that the viator may
inspect or receive copies of the relevant escrow or trust agreements or documents.
[2003, c. 636, §11 (new).]
[2003, c. 636, §11 (new).]
3. Notice of change in ownership or beneficiary. If the settlement provider transfers ownership or changes the beneficiary of the insurance policy, the settlement provider
shall communicate the change in ownership or beneficiary to the insured within 20 days after the change.
[2003, c. 636, §11 (new).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6808. Disclosure
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6808. Disclosure
With each application for a settlement, a settlement provider shall disclose in writing at least the following disclosures
to a viator. Disclosure to a viator must include distribution of a brochure, approved by the superintendent, describing the
process of settlements. The disclosures must be provided to the viator no later than the time the application for the settlement
contract is signed by all parties and must be signed by the viator and the settlement provider and provide the following information:
[2003, c. 636, §10 (amd).]
1. Alternatives or options. Possible alternatives to or options that can be used in conjunction with settlement contracts, including, but not limited
to, accelerated death benefits or policy loans offered by the issuer of the life insurance policy;
[2003, c. 636, §10 (amd).]
2. Federal tax implications. The fact that some or all of the proceeds of the settlement contract may be free from federal income tax under the federal
Health Insurance Portability and Accountability Act of 1996, Public Law 104-191; and that restrictions, qualifications and
other tax laws, particularly those of the state in which the viator resides, may apply and assistance should be sought from
a professional tax advisor;
[2003, c. 636, §10 (amd).]
3. State tax implications. The fact that some or all of the proceeds of the settlement may be free from state income tax under section 6809 and that
restrictions, qualifications and other tax laws, including those of the state in which the viator resides, may apply and assistance
should be sought from a professional tax advisor;
[2003, c. 636, §10 (amd).]
4. Claims of creditors. The fact that proceeds of the settlement could be subject to the claims of creditors;
[2003, c. 636, §10 (amd).]
5. Effect on government benefits. The fact that receipt of the proceeds of the settlement may adversely affect the recipient's eligibility for Medicaid or
other means-based government programs, benefits or entitlements and that advice should be obtained from the appropriate agencies;
[2003, c. 636, §10 (amd).]
6. Right to rescind. The fact that the viator has the right to rescind a settlement contract before the earlier of 30 calendar days after the
date upon which the settlement contract is executed by all parties or 15 calendar days after the date upon which payment is
received by the viator as provided in section 6809. If exercised by the viator, rescission is effective only if both notice
of the rescission is given and repayment of all proceeds and any premiums, loans and loan interest to the settlement provider
is made within the rescission period. If the insured dies during the rescission period, the settlement contract is deemed
to have been rescinded, subject to repayment of all proceeds and any premiums, loans and loan interest to the settlement provider;
[2003, c. 636, §10 (amd).]
7. Potential reduction or loss of benefits to beneficiary. The fact that entering into a settlement contract may cause other rights or benefits, including conversion rights and waiver
of premium benefits that may exist under the policy or certificate, to be forfeited by the viator and that assistance should
be sought from a financial adviser;
[2003, c. 636, §10 (amd).]
8. Funds. The fact that funds will be sent to the viator within 3 business days after the settlement provider has received the insurer's
or group administrator's acknowledgment that ownership of the policy or interest in the certificate has been transferred and
the beneficiary has been designated; and
[2003, c. 636, §10 (new).]
9. Privacy disclosure. A statement containing the following language: "All medical, financial or personal information solicited or obtained by
a settlement provider or settlement producer about an insured, including the insured's identity or the identity of family
members, a spouse or a significant other, may be disclosed as necessary to effect the settlement contract between the viator
and the settlement provider. If you are asked to provide this information, you will be asked to consent to the disclosure.
The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew
your permission to share information every 2 years."
[2003, c. 636, §10 (new).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6809. General provisions for settlement contracts
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6809. General provisions for settlement contracts
1. Prior conditions. A settlement provider entering into a settlement contract with a viator shall first obtain:
A. If the viator is the insured, a written statement from a licensed attending physician that the viator is of sound mind and
under no constraint or undue influence to enter into a settlement contract;
[2003, c. 636, §12 (amd).]
B. Prior to or at the time of execution of the settlement contract, a witnessed document in which the viator consents to the
settlement contract, represents that the viator has a full and complete understanding of the settlement contract and that
the viator has a full and complete understanding of the benefits of the life insurance policy, acknowledges that the viator
has entered into the settlement contract freely and voluntarily and, for persons who are terminally ill or chronically ill,
acknowledges that the insured is terminally ill or chronically ill and that the terminal or chronic illness was diagnosed
after the life insurance policy was issued; and
[2003, c. 636, §12 (amd).]
C. Notwithstanding section 2159, subsection 3 or any other provisions of state law, a document in which the insured consents
to the release of the insured's medical records to a settlement provider and, if the life insurance policy was issued less
than 2 years from the date of application for a settlement contract to the insurance company that issued the life insurance
policy covering the life of the insured.
[2003, c. 636, §12 (amd).]
The insurer shall respond to a request for verification of coverage submitted by a settlement provider not later than 30 calendar
days from the date the request is received. The request for verification of coverage must be made on a form approved by the
superintendent. In its response, the insurer shall indicate whether, based on the medical evidence and documents provided,
the insurer intends to pursue an investigation regarding the validity of the insurance contract.
[2003, c. 636, §12 (amd).]
2. Confidentiality of medical information. All medical information solicited or obtained by any licensee is subject to the applicable provisions of state law relating
to confidentiality of medical information.
[1997, c. 430, §1 (new); §2 (aff).]
3. Unconditional rescission. All settlement contracts must contain a provision that the viator has the right to rescind a settlement contract before
the earlier of 30 calendar days after the date upon which the settlement contract is executed by all parties or 15 calendar
days after the date upon which payment is received by the viator as provided in section 6808. Rescission if exercised by
the viator is effective only if both notice of the rescission is given and a full repayment of all proceeds and any premiums,
loans and loan interest to the settlement provider is made within the rescission period. If the insured dies during the rescission
period, the settlement contract is deemed to have been rescinded, subject to repayment of all proceeds and any premiums, loans
and loan interest to the settlement provider.
[2003, c. 636, §12 (amd).]
4. Transfer of insurance policy. The settlement provider shall instruct the viator to send the executed documents required to effect the change in ownership
or assignment or change in beneficiary directly to the independent escrow agent. Within 3 business days after the date the
escrow agent receives the document, or from the date the settlement provider receives the documents, if the viator erroneously
provides the documents directly to the provider, the settlement provider shall pay or transfer the proceeds of the settlement
into an escrow or trust account maintained in a state or federally chartered financial institution whose deposits are insured
by the Federal Deposit Insurance Corporation or its successor. Upon payment of the settlement proceeds into the escrow account,
the escrow agent shall deliver the original change in ownership or assignment or change in beneficiary forms to the settlement
provider or related provider trust. Upon the escrow agent's receipt of the acknowledgment of the properly completed transfer
of ownership or assignment or designation of beneficiary from the insurance company, the escrow agent shall pay the settlement
proceeds to the viator.
[2003, c. 636, §12 (amd).]
5. Effect of failure to tender consideration. Failure to tender consideration for the settlement under the terms of the settlement contract renders the contract voidable
for lack of consideration until the time consideration is tendered to and accepted by the viator.
[2003, c. 636, §12 (amd).]
6. Unlicensed provider.
[2003, c. 636, §12 (rp).]
7. Income.
[2003, c. 636, §12 (rp).]
8. Advertising standards.
[2003, c. 636, §12 (rp).]
9. Contacts with the insured. An insured may designate one or more adult individuals in regular contact with the insured as the individual for all inquiries
regarding the insured's health status and, if that designation is made, a settlement provider may not make these inquiries
to the insured unless the settlement provider is unable, for more than 30 days, to contact the designee after diligent effort.
The insured may change this designation at any time upon written notice to the settlement provider. Contacts with the insured
for the purpose of determining the health status of the insured after the settlement has occurred are limited to once every
3 months for insureds with an estimated life expectancy of more than one year and once per month for insureds with a life
expectancy of one year or less. The settlement provider shall explain to the insured the procedure for these contacts prior
to the time the settlement contract is entered into. The limitation in this rule on contacts does not apply to contacts made
for reasons other than determining the insured's health status or necessary to maintain the policy in force. Settlement providers
are responsible for the actions of their authorized representatives.
[2003, c. 636, §12 (amd).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6810. Rules
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6810. Rules
The superintendent may adopt rules implementing this chapter. These rules are routine technical rules under Title 5, chapter
375, subchapter 2-A. Rules may be adopted to:
[2003, c. 636, §13 (amd).]
1. Standards for evaluating reasonableness of payments. Establish standards for evaluating the reasonableness of payments to viators under a settlement contract only when the insured
in the policy that is the subject of a settlement contract is terminally ill or chronically ill. This authority includes,
but is not limited to, regulation of discount rates used to determine the amount paid in exchange for assignment, transfer,
sale, devise or bequest of a benefit under a life insurance policy;
[2003, c. 636, §13 (new).]
2. Licensing requirements and standards. Establish appropriate licensing requirements and standards for continued licensure for settlement providers;
[2003, c. 636, §13 (new).]
3. Mechanism for financial accountability. Require a bond or other mechanism for financial accountability for settlement providers;
[2003, c. 636, §13 (new).]
4. Govern relationship and responsibilities. Govern the relationship and responsibilities of both insurers and settlement providers and settlement producers and others
in the business of settlement during the period of consideration or effectuation of a settlement contract; and
[2003, c. 636, §13 (new).]
5. Implement other requirements. Implement any other requirements of this chapter.
[2003, c. 636, §13 (new).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6811. Prohibited practices and provisions under policies
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6811. Prohibited practices and provisions under policies
1. Assignment. The following provisions govern assignment.
A. A policy of individual or group life insurance that permits assignment issued or delivered in this State may not, in any
way, restrict a person from making an absolute assignment of rights for consideration. Prohibited restrictions include, but
are not limited to, assignments only as a gift and without consideration, assignments only to a limited class of persons and
assignments only to a natural person and not to a legal entity.
[2003, c. 636, §13 (amd).]
B. A life insurance company that acknowledges and records an absolute assignment of life insurance policy or rights under a
group life insurance policy may rely solely on the authorization of the assignor to make the assignment and the life insurance
company is not obligated to inquire into the validity, sufficiency or terms of the assignment. In acknowledging and recording
an assignment, a life insurance company acting in good faith and reliance on the presentation of the absolute assignment,
acts in a ministerial capacity and may exhibit no discretion as to whether an assignor may make the assignment or whether
the assignment conforms with applicable law.
[1997, c. 430, §1 (new); §2 (aff).]
[2003, c. 636, §13 (amd).]
2. Rights under an assignment. The following provisions apply to an assignment.
A. For life insurance contracts that permit assignment:
(1) A person has the right to assign, transfer, sell or bequeath the ownership of or death benefit payable under a life
insurance policy or certificate at any time for any remaining portion of that coverage after exercising any option for accelerated
benefits;
(2) A person also has the right to assign, transfer, sell, devise or bequeath the ownership of or death benefit payable
under a life insurance policy or certificate if that coverage is on disability waiver of premium at any time; and
(3) The absolute assignee of an individual life insurance policy or of all rights under a group life insurance policy has
all rights at law or in equity as the assignor held under that policy, including, but not limited to, the right to convert
the coverage to an individual policy, the right to timely notice of the right to that conversion at the time that right accrues,
the right to make premium payments or take such other action as may be necessary under the policy in order to preserve the
value of the coverage assigned, the right to receive information concerning the coverage, the right to receive notice of a
lapse or discontinuation of coverage, the exclusive right to exercise any options concerning the assigned coverage during
an open enrollment period and all such other rights and privileges initially granted to a person under the terms of the individual
or group life insurance policy.
[2003, c. 636, §13 (amd).]
B. A person has the right to exercise any option for accelerated benefits under the terms of any individual or group life insurance
policy at any time for any unassigned portion of that policy or certificate.
[2003, c. 636, §13 (amd).]
[2003, c. 636, §13 (amd).]
3. Failure to give notice under group life insurance policy. If the rights under a group life insurance policy have been assigned and the administrator of the policy fails to give notice
to the assignee that a person is no longer a covered person under the group and of the right to convert the policy to an individual
life insurance policy, the period of time during which the assignee must make application for conversion under the terms of
the group life insurance policy begins from the date the notice is given to the assignee.
[2003, c. 636, §13 (amd).]
4. Riders and postsettlement increases or additions. With respect to policies containing a provision for double or additional indemnity for accidental death or any other riders
or additional death benefits, including the increase in the death benefit in excess of the amount of the death benefits of
the date the settlement contract is effected at the time the policy is assigned, transferred, sold, devised or bequeathed,
unless otherwise mutually agreed to in writing by the viator and the settlement provider, the additional amount remains payable
to the beneficiary last named by the viator prior to entering into the settlement contract or to such other beneficiary other
than the settlement provider as the viator may thereafter designate or, in the absence of a designation, to the estate of
the viator.
[2003, c. 636, §13 (amd).]
5. Prohibition on settlements. It is a violation of this chapter for any person to enter into a settlement contract within a 2-year period commencing with
the date of issuance of the insurance policy or certificate unless the viator certifies to the settlement provider that one
or more of the following conditions have been met within the 2-year period:
A. The policy was issued upon the viator's exercise of conversion rights arising out of a group or individual policy, as long
as the total of the time covered under the conversion policy plus the time covered under the prior policy is at least 24 months.
The time covered under a group policy must be calculated without regard to any change in insurance carriers, as long as the
coverage has been continuous and under the same group sponsorship; and
[2003, c. 636, §13 (new).]
B. The viator submits independent evidence to the settlement provider that one or more of the following conditions have been
met within the 2-year period:
(1) The viator or insured is terminally ill or chronically ill; or
(2) The viator or insured disposes of the viator's entire ownership interest in a closely held corporation pursuant to the
terms of a buyout or other similar agreement in effect at the time the insurance policy was initially issued.
[2003, c. 636, §13 (new).]
[2003, c. 636, §13 (new).]
6. Submission of certification. If the settlement provider submits to the insurer a copy of the owner's or insured's certification described in subsection
5 when the settlement provider submits a request to the insurer to effect the transfer of the policy or certificate to the
settlement provider, the copy is deemed to conclusively establish that the settlement contract satisfies the requirements
of this section and the insurer shall timely respond to the request.
[2003, c. 636, §13 (new).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6812. Insurance company practices
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6812. Insurance company practices
1. Duty to provide information. In addition to the provisions in section 6809, an insurance company that is licensed to do business in this State shall
promptly respond to reasonable requests for policy information from a settlement provider or settlement producer upon the
receipt of the following documents in the office of the insurance company:
A. An authorization signed by the viator to release specified information regarding the policy or certificate to a named licensed
settlement provider or settlement producer; and
[2003, c. 636, §13 (amd).]
B. A request in writing from the settlement provider or settlement producer for the specified policy or certificate information.
[2003, c. 636, §13 (amd).]
Requests for the following items related to the policy or certificate that is the subject of a settlement transaction are
deemed to be reasonable: ownership of and death benefits under the policy or certificate; premium information on the policy
or certificate; liens, assignments and additional benefits; waiver of premium; and ownership and assignment provisions. The
information provided must be the most recent information on file. By rule, the superintendent may specify additional criteria
for information requests deemed reasonable under this section by a settlement provider.
[2003, c. 636, §13 (amd).]
2. Conversion of group insurance. An issuer or 3rd-party administrator of a group life insurance policy shall promptly issue an individual conversion policy
if the conversion is being requested for the purpose of entering into a settlement contract. For the purposes of this section,
issuance of such a policy is deemed timely if it meets relevant standards for timeliness under chapter 23. This subsection
may not be construed to create any new conversion rights not already granted by the policy or certificate being acquired pursuant
to a settlement contract.
[2003, c. 636, §13 (amd).]
3. Right to assign rights or benefits. Subsection 1 or 2 does not prohibit a viator under a group life insurance policy from assigning rights or benefits under
the policy to a licensed settlement provider or converting the coverage to an individual life insurance policy.
[2003, c. 636, §13 (amd).]
4. Assignment restrictions prohibited. A policy of group life insurance issued or in existence in this State that permits any assignment of a viator's rights may
not restrict the viator from making assignments other than by gift.
[1997, c. 430, §1 (new); §2 (aff).]
5. Purchase of securities. This chapter does not require notice to the superintendent of, or restrict an insurance company from investing in, or participating
in, or purchasing any securities issued in any transaction including without limitation any financing, securitization transaction
or securities offering in which the licensed settlement provider sells, assigns, transfers, pledges, hypothecates or otherwise
disposes of settlement contracts, policies acquired pursuant to settlement contracts or any interest therein.
[2003, c. 636, §13 (amd).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6813. Financing (REPEALED)
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6813. Financing (REPEALED)
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6814. Unfair trade practices
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6814. Unfair trade practices
A violation of this chapter is an unfair trade practice under Title 5, chapter 10 and subject to the penalties contained in
that chapter.
[1997, c. 430, §1 (new); §2 (aff).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6815-A. Regulatory requirements under Maine Uniform Securities Act
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6815-A. Regulatory requirements under Maine Uniform Securities Act
This chapter does not preempt the regulatory requirements set forth in the Maine Uniform Securities Act, as amended, including
but not limited to the regulation of securities transactions in settlement contracts or viatical settlement contracts and
the licensing of any person or entity engaged in the sale of securities.
[2005, c. 65, Pt. C, §15 (amd).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6815. Assignment or resale of policies
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6815. Assignment or resale of policies
1. Prohibited transfers. A settlement provider may not sell, assign, transfer or pledge a policy acquired pursuant to a settlement contract except
to a licensed settlement provider or a person exempt from licensing under section 6803.
[2003, c. 636, §15 (amd).]
2. Securities registration. Any sale by a settlement provider of settlement contracts, policies acquired pursuant to settlement contracts or interests
therein that constitute a "security" within the meaning of the United States Securities Act of 1933, as amended, or the Maine
Uniform Securities Act, as amended, must be registered under those statutes unless there is an available exemption from registration
under those statutes.
[2005, c. 65, Pt. C, §14 (amd).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6816. Permitted operations before formal approval (REPEALED)
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6816. Permitted operations before formal approval (REPEALED)
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6817. Advertising of settlements
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6817. Advertising of settlements
1. Advertising for settlements. Every settlement provider licensee shall establish and at all times maintain a system of control over the content, form and
method of dissemination of all advertisements of its contracts, products and services. All advertisements, regardless of by
whom written, created, designed or presented, are the responsibility of the settlement provider licensee, as well as the individual
who created or presented the advertisement. A system of control must include providing regular routine notification, at least
once a year, to agents and others authorized by the settlement licensee to disseminate advertisements; the notification must
include the requirements and procedures for approval of any advertisements not furnished by the settlement provider licensee
prior to the advertisements' use.
[2003, c. 636, §18 (new).]
2. Form and content. Advertisements must be truthful and not misleading in fact or by implication. The form and content of an advertisement of
a settlement contract must be sufficiently complete and clear so as to avoid deception. It may not have the capacity or tendency
to mislead or deceive. Whether an advertisement has the capacity or tendency to mislead or deceive must be determined by the
superintendent from the overall impression that the advertisement may be reasonably expected to create upon a person of average
education or intelligence within the segment of the public to which it is directed.
[2003, c. 636, §18 (new).]
3. Standards for disclosure. An advertisement must comply with standards for disclosure determined by rule by the superintendent.
[2003, c. 636, §18 (new).]
4. Applicability. This section applies to any advertisement of settlement contracts or related products or services intended for dissemination
in this State, including advertising on the Internet viewed by persons located in this State. If disclosure requirements are
established pursuant to federal regulation, this section must be interpreted so as to minimize or eliminate conflict with
federal regulation whenever possible.
[2003, c. 636, §18 (new).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6818. Fraud prevention and control
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6818. Fraud prevention and control
1. Fraudulent viatical or life settlement acts prohibited. Notwithstanding any other provision of law to the contrary:
A. A person may not commit a fraudulent viatical or life settlement act;
[2003, c. 636, §18 (new).]
B. A person may not knowingly or intentionally interfere with the enforcement of the provisions of this chapter or investigations
of suspected or actual violations of this chapter; and
[2003, c. 636, §18 (new).]
C. A person in the business of settlements may not knowingly or intentionally permit any person convicted of a crime involving
dishonesty or breach of trust to participate in the business of settlements.
[2003, c. 636, §18 (new).]
[2003, c. 636, §18 (new).]
2. Fraud warning required. Settlement contracts and applications for settlements, regardless of the form of transmission, must contain the following
statement or a substantially similar statement: "Any person who knowingly presents false information in an application for
insurance or a settlement contract is guilty of a crime and may be subject to fines and confinement in prison." The lack of
a statement as required in this subsection does not constitute a defense in any prosecution for a fraudulent viatical or life
settlement act.
[2003, c. 636, §18 (new).]
3. Mandatory reporting of fraudulent viatical or life settlement acts. Any person engaged in the business of settlements having knowledge or a reasonable belief that a fraudulent viatical or
life settlement act is being, will be or has been committed shall provide to the superintendent the information required by,
and in a manner prescribed by, the superintendent. Any other person having knowledge or a reasonable belief that a fraudulent
viatical or life settlement act is being, will be or has been committed may provide to the superintendent the information
required by, and in a manner prescribed by, the superintendent.
[2003, c. 636, §18 (new).]
4. Immunity from liability. Except as provided in subsection 5, civil liability may not be imposed on and a cause of action may not arise from a person's
furnishing information concerning suspected, anticipated or completed fraudulent viatical or life settlement acts or suspected
or completed fraudulent insurance acts if the information is provided to or received from:
A. The superintendent or the superintendent's employees, agents or representatives;
[2003, c. 636, §18 (new).]
B. Federal, state or local law enforcement or regulatory officials or their employees, agents or representatives;
[2003, c. 636, §18 (new).]
C. The National Association of Insurance Commissioners or its successor organization, National Association of Securities Dealers
or its successor organization, the North American Securities Administrators Association or its successor organization, or
their employees, agents or representatives of these organizations, or other regulatory body overseeing life insurance, settlements
securities or investment fraud;
[2003, c. 636, §18 (new).]
D. A person involved in the prevention and detection of fraudulent viatical or life settlement acts or that person's agents,
employees or representatives; or
[2003, c. 636, §18 (new).]
E. The life insurer that issued the life insurance policy covering the life of the insured.
[2003, c. 636, §18 (new).]
[2003, c. 636, §18 (new).]
5. Exception. The following provisions apply to the imposition of civil liability arising from information provided to or received from
the superintendent or the superintendent's employees, agents or representatives.
A. Subsection 4 does not apply to statements made with actual malice. In an action brought against a person for filing a report
or furnishing other information concerning a fraudulent viatical or life settlement act or a fraudulent insurance act, the
party bringing the action shall plead specifically any allegation that subsection 4 does not apply because the person filing
the report or furnishing the information did so with actual malice.
[2003, c. 636, §18 (new).]
B. Subsection 4 does not apply to a person's furnishing information concerning that person's own suspected, anticipated or
completed fraudulent viatical or life settlement acts or suspected or completed fraudulent insurance acts.
[2003, c. 636, §18 (new).]
C. This subsection does not abrogate or modify common law or statutory privileges or immunities enjoyed by a person described
in subsection 4.
[2003, c. 636, §18 (new).]
[2003, c. 636, §18 (new).]
6. Confidentiality. The following provisions apply.
A. The documents and evidence provided pursuant to subsection 4 or obtained by the superintendent in an investigation of suspected
or actual fraudulent viatical or life settlement acts is privileged and confidential and is not a public record under Title
1, chapter 13 and is not subject to discovery or subpoena in a civil or criminal action.
[2003, c. 636, §18 (new).]
B. Paragraph A does not prohibit release by the superintendent of documents and evidence obtained in an investigation of suspected
or actual fraudulent viatical or life settlement acts:
(1) In administrative or judicial proceedings to enforce laws administered by the superintendent;
(2) To federal, state or local law enforcement or regulatory agencies, to an organization established for the purpose of
detecting and preventing fraudulent viatical or life settlement acts or to the National Association of Insurance Commissioners
or its successor organization; or
(3) At the discretion of the superintendent, to a person in the business of settlements that is aggrieved by a fraudulent
viatical or life settlement act.
[2003, c. 636, §18 (new).]
C. Release of documents and evidence under paragraph B does not abrogate or modify the privilege granted in paragraph A.
[2003, c. 636, §18 (new).]
[2003, c. 636, §18 (new).]
7. Other law enforcement or regulatory authority. This section does not:
A. Preempt the authority or relieve the duty of other law enforcement or regulatory agencies to investigate, examine and prosecute
suspected violations of law;
[2003, c. 636, §18 (new).]
B. Prevent or prohibit a person from disclosing voluntarily information concerning viatical or life settlement fraud to a law
enforcement or regulatory agency other than the bureau; or
[2003, c. 636, §18 (new).]
C. Limit the powers granted elsewhere by the laws of this State to the superintendent or an insurance fraud unit to investigate
and examine possible violations of law and to take appropriate action against wrongdoers.
[2003, c. 636, §18 (new).]
[2003, c. 636, §18 (new).]
8. Viatical or life settlement antifraud initiatives. In accordance with this subsection, a settlement provider licensee must have in place antifraud initiatives reasonably calculated
to detect, prosecute and prevent fraudulent viatical or life settlement acts.
A. At the discretion of the superintendent, the superintendent may order, or a licensee may request and the superintendent
may grant, such modifications of the required initiatives under paragraph B as necessary to ensure an effective antifraud
program. The modifications may be more or less restrictive than the required initiatives as long as the modifications may
reasonably be expected to accomplish the purpose of this subsection.
[2003, c. 636, §18 (new).]
B. Antifraud initiatives must include:
(1) Fraud investigators, who may be employees of a settlement provider or independent contractors; and
(2) An antifraud plan, which must be submitted to the superintendent. The antifraud plan must include, but is not limited
to:
(a) A description of the procedures for detecting and investigating possible fraudulent viatical or life settlement acts
and procedures for resolving material inconsistencies between medical records and insurance applications;
(b) A description of the procedures for reporting possible fraudulent viatical or life settlement acts to the superintendent;
(c) A description of the plan for antifraud education and training of underwriters and other personnel; and
(d) A description or chart outlining the organizational arrangement of the antifraud personnel who are responsible for the
investigation and reporting of possible fraudulent viatical or life settlement acts and investigating unresolved material
inconsistencies between medical records and insurance applications.
[2003, c. 636, §18 (new).]
C. Antifraud plans submitted to the superintendent are privileged and confidential and are not a public record under Title
1, chapter 13 or subject to discovery or subpoena in a civil or criminal action.
[2003, c. 636, §18 (new).]
[2003, c. 636, §18 (new).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
Title 24-A - §6819. Civil remedies; individual remedy
Title 24-A: MAINE INSURANCE CODE
Chapter 85: VIATICAL AND LIFE SETTLEMENTS ACT (HEADING: PL 1997, c. 430, @1 (new); 2003, c. 636, @2 (rpr))
§6819. Civil remedies; individual remedy
1. Civil remedies and enforcement. In addition to the penalties available pursuant to section 6814, the superintendent may assess fines or take any other enforcement
action permitted under section 12-A against any person who violates any provision of this chapter.
[2003, c. 636, §18 (new).]
2. Superior Court action. Any person who is injured by any action of a person in violation of this chapter may bring an action in Superior Court.
The requirements for notice and filing of a cause of action under this subsection are governed by the Maine Rules of Civil
Procedure. The person may recover damages, together with costs and disbursements.
[2003, c. 636, §18 (new).]
3. No private right of action. Except as specifically provided in subsection 2, this chapter provides no express or implied private right of action.
[2003, c. 636, §18 (new).]
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
This page created on: 2005-10-01
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