As used in this chapter, unless the
context otherwise requires, the words and terms defined in NRS 688C.020
to 688C.150 , inclusive, have the meanings ascribed to
them in those sections.
(Added to NRS by 2001, 2166 )
“Advertising” means a
written, electronic or printed communication or a communication by
recorded telephone message, radio, television, the Internet or a similar
medium of communication, including a film strip, motion picture or
videotape, published, communicated or otherwise placed before the public
to create an interest in, or induce a person to sell a policy of life
insurance pursuant to, a viatical settlement.
(Added to NRS by 2001, 2167 )
“Broker of
viatical settlements” means a person who on behalf of a viator and for a
fee, commission or other valuable consideration offers or attempts to
negotiate a viatical settlement between the viator and one or more
providers of viatical settlements. The term does not include an attorney
at law, certified public accountant or financial planner accredited by a
nationally recognized accrediting agency who is retained by the viator
and whose compensation is not paid by a provider or purchaser of viatical
settlements.
(Added to NRS by 2001, 2167 )
“Business of viatical settlements” means the offering, solicitation,
negotiation, procurement, effectuation, purchasing, financing,
monitoring, tracking, underwriting, selling, transferring, pledging or
otherwise hypothecating of viatical settlements.
(Added to NRS by 2001, 2167 )
“Chronically ill” means:
1. Being unable to perform at least two activities of daily
living, such as eating, moving from one place to another, bathing,
dressing, continence, defecation or urination;
2. Requiring substantial supervision for protection from threats
to health and safety because of cognitive impairment; or
3. Having a level of disability similar to that described in
subsection 1 as determined by the Secretary of Health and Human Services.
(Added to NRS by 2001, 2167 )
1. “Financing agent” means an underwriter, agent for placement,
enhancer of credit, lender, purchaser of securities, purchaser of a
policy from a provider of viatical settlements or other person that may
enter into a viatical settlement and has direct ownership in a policy
that is the subject of the viatical settlement but:
(a) Whose principal activity related to the transaction is
providing money to effect the viatical settlement; and
(b) Who has an agreement in writing with one or more licensed
providers of viatical settlements to finance the acquisition of one or
more viatical settlements.
2. The term does not include a nonaccredited investor or a
purchaser of viatical settlements.
(Added to NRS by 2001, 2167 )
“Policy” means an individual or
group policy, group certificate, contract or arrangement of life
insurance affecting the rights of a person, whether or not delivered or
issued for delivery in this state.
(Added to NRS by 2001, 2167 )
“Provider of viatical settlements” means a person other than a viator
who enters into or effectuates a viatical settlement. The term does not
include:
1. A bank, savings and loan association, thrift company, credit
union or other licensed lender that takes an assignment of a policy as
security for a loan;
2. The issuer of a policy that provides accelerated benefits
pursuant to the contract;
3. An authorized or eligible insurer that provides stop-loss
coverage to a provider or purchaser of viatical settlements;
4. A natural person who enters into no more than one agreement in
a calendar year for the transfer of policies for a value less than the
expected death benefit;
5. A financing agent;
6. A special organization;
7. A trust for a related provider; or
8. A purchaser of viatical settlements.
(Added to NRS by 2001, 2167 )
“Purchaser of viatical settlements” means a person who gives a sum of
money as consideration for a policy or an interest in the death benefits
of a policy, or a person who owns or acquires or is entitled to a
beneficial interest in a trust that owns a viatical settlement contract
or is the beneficiary of a policy that has been or will be the subject of
a viatical settlement contract, for the purpose of deriving an economic
benefit. The term does not include:
1. A person licensed pursuant to this chapter;
2. An accredited investor or qualified institutional buyer as
defined respectively in Regulation D, Rule 501 or Rule 144A of the
Federal Securities Act of 1933, as amended;
3. A financing agent;
4. A special organization; or
5. A trust for a related provider.
(Added to NRS by 2001, 2168 )
“Special
organization” means an organization formed by a licensed provider of
viatical settlements solely to enable the provider to gain access to
institutional markets for capital.
(Added to NRS by 2001, 2168 )
“Terminally ill” means
having an illness that can reasonably be expected to result in death
within 24 months.
(Added to NRS by 2001, 2168 )
“Trust for a
related provider” means a trust established by a licensed provider of
viatical settlements solely to hold the ownership of or beneficial
interests in purchased policies in connection with financing.
(Added to NRS by 2001, 2168 )
“Viatical settlement”
means a written agreement for the payment of money, or anything else of
value, which is less than the expected death benefit of a policy, in
exchange for the viator’s assignment, sale, transfer or devise of the
death benefit or ownership of any portion of the policy. The term
includes:
1. An agreement for a loan or other financing secured primarily by
a policy, other than a loan by an insurer pursuant to or secured by the
cash value of a policy; and
2. An agreement to transfer ownership or change the beneficiary,
in the future, regardless of the date of payment to the viator.
(Added to NRS by 2001, 2168 )
“Viaticated policy”
means a policy that has been acquired by a provider of viatical
settlements pursuant to a viatical settlement.
(Added to NRS by 2001, 2168 )
“Viator” means the owner of a
policy or the holder of a certificate of insurance under a policy of
group insurance. The term is not limited to an owner who is terminally or
chronically ill except where that limitation is expressly provided.
(Added to NRS by 2001, 2168 )
If there is more than one viator
with respect to a single policy and they are residents of different
states, the legal effect of a viatical settlement is governed by the law
of the state in which the viator having the largest fractional ownership
resides. If the viators own equal fractions, they may agree in writing to
choose the state in which one resides.
(Added to NRS by 2001, 2169 )
LICENSING; REGULATION
The Commissioner may
adopt regulations to:
1. Establish standards for evaluating the reasonableness of
payments under viatical settlements to persons chronically or terminally
ill, including the regulation of the rates of discount used to determine
the amount paid in exchange for an assignment, transfer, sale or devise
of a benefit under a policy.
2. Require a bond or otherwise ensure financial accountability of
providers and brokers of viatical settlements.
3. Govern the relationship of insurers with providers and brokers
of viatical settlements during the viatication of a policy.
4. Establish standards and requirements for licensing and
registering producers of insurance acting as brokers of viatical
settlements.
(Added to NRS by 2001, 2179 ; A 2005, 2135 )
The
Commissioner may examine or investigate a licensee under this chapter as
often as he considers appropriate. An examination will be conducted in
the manner provided in NRS 679B.230
to 679B.300 , inclusive. The
Commissioner may also examine or investigate any other person or business
insofar as he considers necessary or material to the examination or
investigation of the licensee. Instead of an examination or investigation
under this chapter of a foreign or alien person licensed under this
chapter, the Commissioner may accept a report on examination or
investigation of the licensee by the equivalent authority of the
licensee’s state of domicile or port of entry.
(Added to NRS by 2001, 2170 )
1. Except as otherwise provided in NRS 688C.215 , a person shall not, without first obtaining
a license from the Commissioner, operate in or from this State as a
provider or broker of viatical settlements.
2. Application for a license must be made to the Commissioner on a
form prescribed by him, accompanied by the prescribed fee. A license may
be renewed from year to year on its anniversary by payment of the
prescribed fee. The license expires if the fee is not paid by that date.
3. An applicant shall provide information on forms required by the
Commissioner, who may at any time require the applicant to disclose the
identity of all stockholders, partners, members, officers and employees.
The Commissioner may refuse to issue a license to an organization if he
is not satisfied that a stockholder, partner, member or officer who may
materially influence the applicant’s conduct satisfies the requirements
of this chapter.
4. A license issued to an organization authorizes all partners,
members, officers and designated employees to act as providers or brokers
of viatical settlements. Those persons must be named in the application
or a supplement to it.
(Added to NRS by 2001, 2169 ; A 2005, 2135 )
1. Upon the filing of an application and payment of the fee, the
Commissioner shall investigate the applicant, and issue a license if he
finds that the applicant:
(a) If a provider of viatical settlements, has set forth a detailed
plan of operation;
(b) Is competent and trustworthy and intends to act in good faith
in the capacity for which the license is sought;
(c) Has a good reputation in business and, if a natural person, has
had experience, training or education which qualifies him in that
capacity;
(d) If an organization, provides a certificate of good standing
from the state of its domicile; and
(e) If a provider or broker of viatical settlements, has included a
plan to prevent fraud which satisfies the requirements of NRS 688C.490
.
2. The Commissioner shall not issue a license to a nonresident
unless a written designation of an agent for service of process, or an
irrevocable written consent to the commencement of an action against the
applicant by service of process upon the Commissioner, accompanies the
application.
3. A provider or broker of viatical settlements shall furnish to
the Commissioner new or revised information concerning partners, members,
officers, holders of more than 10 percent of its stock, and designated
employees within 30 days after a change occurs.
(Added to NRS by 2001, 2169 )
After
notice, and after a hearing if requested, the Commissioner may suspend,
revoke, refuse to issue or refuse to renew a license under this chapter
if he finds that:
1. There was material misrepresentation in the application for the
license;
2. The licensee or an officer, partner, member or significant
managerial employee has been convicted of fraudulent or dishonest
practices, is subject to a final administrative action for
disqualification, or is otherwise shown to be untrustworthy or
incompetent;
3. A provider of viatical settlements has engaged in a pattern of
unreasonable payments to viators;
4. The applicant or licensee has been found guilty of, or pleaded
guilty or nolo contendere to, a felony or a misdemeanor involving fraud,
forgery, embezzlement, obtaining money under false pretenses, larceny,
extortion, conspiracy to defraud or any crime involving moral turpitude,
whether or not a judgment of conviction has been entered by the court;
5. A provider of viatical settlements has entered into a viatical
settlement in a form not approved pursuant to NRS 688C.220 ;
6. A provider of viatical settlements has failed to honor
obligations of a viatical settlement;
7. The licensee no longer meets a requirement for initial
licensure;
8. A provider of viatical settlements has assigned, transferred or
pledged a viaticated policy to a person other than another provider
licensed under this chapter, a purchaser of the viatical settlement, a
special organization or a trust for a related provider;
9. The applicant or licensee has provided materially untrue
information to an insurer that issued a policy that is the subject of a
viatical settlement;
10. The applicant or licensee has failed to pay a tax as required
pursuant to the provisions of chapter 363A
of NRS; or
11. The applicant or licensee has violated a provision of this
chapter.
(Added to NRS by 2001, 2169 ; A 2005, 1785 )
1. A natural person who has been licensed for at least 1 year and
who is in good standing as a resident or nonresident producer of
insurance with a life insurance qualification is not required to be
licensed as a broker of viatical settlements.
2. A licensed producer of insurance specified in subsection 1 must
register with the Division not more than 30 days after first operating as
a broker of viatical settlements, on a form prescribed by the
Commissioner, and pay the fee for registration pursuant to NRS 680B.010
. Failure to register within the
required period or late payment of or failure to pay the fee may result
in the imposition of an administrative fine of not more than $500.
3. A producer of insurance who acts as a broker of viatical
settlements pursuant to subsection 1 shall comply with the provisions of
NRS 688C.220 to 688C.250 , inclusive, and 688C.310 .
(Added to NRS by 2005, 2135 )
A person shall not use a form of viatical
settlement or of disclosure in this state unless the form has been filed
with and approved by the Commissioner. The Commissioner shall disapprove
such a form if, in his opinion, the settlement or any of its terms is
unreasonable, contrary to the interests of the public or otherwise
misleading or unfair to the viator. The Commissioner may require the
submission of advertising material before its use.
(Added to NRS by 2001, 2170 )
1. Each licensee under this chapter shall file with the
Commissioner on or before March 1 of each year an annual statement
containing such information as the Commissioner prescribes by regulation.
2. Except as allowed or required by a statute other than this
chapter, a provider or broker of viatical settlements, an insurer, a
producer of insurance, an information bureau, a rating agency or any
other person knowing the identity of an insured shall not disclose that
identity as an insured to any other person unless the disclosure is:
(a) Necessary to effect a viatical settlement between the viator
and a provider of viatical settlements and the viator and the insured
have given prior written consent to the disclosure;
(b) Furnished in response to an investigation or examination by the
Commissioner or another governmental officer or agency;
(c) A term of or condition to the transfer of a policy by one
provider of viatical settlements to another provider; or
(d) Necessary to permit a financing agent to finance the purchase
of a policy by a provider of viatical settlements and the insured has
given prior written consent to the disclosure.
(Added to NRS by 2001, 2170 )
1. A person required to be licensed under this chapter shall
retain for 5 years copies of all:
(a) Contracts, underwriting documents, forms of policy and
applications, from the date of the proposal, offer or execution,
whichever is latest;
(b) Checks, drafts and other evidence or documentation relating to
the payment, transfer or release of money, from the date of the
transaction; and
(c) Records and documents related to the requirements of this
chapter.
2. This section does not relieve a person of the obligation to
produce a document described in subsection 1 to the Commissioner after
the expiration of the relevant period if the person has retained the
document.
3. Records required by this section to be retained must be legible
and complete. They may be retained in any form or by any process that
accurately reproduces or is a durable medium for the reproduction of the
record.
(Added to NRS by 2001, 2171 )
1. With each application for a viatical settlement, a provider or
broker of viatical settlements shall furnish to the viator at least the
following disclosures no later than the time the application for the
settlement is signed by all the parties, in a separate document signed by
the viator and the provider or broker:
(a) The possible alternatives to viatical settlement, including any
accelerated death benefits or loans offered under the viator’s policy.
(b) Some or all of the proceeds of the viatical settlement may be
taxable under the federal income tax or a state franchise or income tax,
and assistance should be sought from a professional tax adviser.
(c) Proceeds of the viatical settlement may be subject to the
claims of creditors.
(d) Receipt of proceeds of a viatical settlement may adversely
affect the viator’s eligibility for Medicaid or other governmental
benefits, and advice should be sought from the appropriate governmental
agencies.
(e) The viator has a right to terminate a viatical settlement
within 15 days after his receipt of the proceeds, as provided in NRS
688C.300 , and if the insured dies
during that period, the settlement is terminated and all proceeds must be
repaid to the provider.
(f) Money will be sent to the viator within 3 business days after
the provider has received the insurer’s or group administrator’s
acknowledgment that ownership of or interest in the policy has been
transferred and the beneficiary has been designated.
(g) Entering into a viatical settlement may cause other rights,
including conversion and waiver of premium, that may exist under the
policy to be forfeited by the viator, and assistance should be sought
from a financial adviser.
(h) A brochure is provided which describes the process of viatical
settlement, in the form prescribed by the National Association of
Insurance Commissioners unless the Commissioner prescribes a different
form.
2. The document in which the disclosures required by paragraphs
(a) to (g), inclusive, of subsection 1 are made must also contain the
following:
All medical, financial and personal information solicited or obtained by
a provider or broker of viatical settlements about an insured, including
his identity and that of members of his family, a spouse or other
relationship, may be disclosed as necessary to effect the viatical
settlement between the viator and the provider. If you are asked to
provide this information, you will be asked to consent to the disclosure.
Failure to consent may affect your ability to viaticate your policy. The
information may be furnished to someone who buys the policy or provides
money for the purchase.
(Added to NRS by 2001, 2171 )
A provider of viatical settlements shall furnish to the
viator, no later than the date the viatical settlement is signed by all
parties, at least the following disclosures, conspicuously displayed in
the viatical settlement or in a separate document signed by the viator
and the provider or broker of viatical settlements:
1. The affiliation, if any, between the provider and the issuer of
the policy to be viaticated.
2. The name, address and telephone number of the provider.
3. The amount and method of calculating the broker’s commission,
including anything of value paid or given to the broker for placing the
policy.
4. If the policy to be viaticated was issued as a joint policy,
contains family riders or covers a life other than that of the insured
under it, any possible loss of coverage on the other lives under the
policy, and that the viator should consult the producer of the insurance
or the issuer of the policy for advice concerning the settlement.
5. The monetary amount of the current death benefit payable to the
provider under the policy and, if known, the availability of any other
guaranteed benefit, the monetary amount of any benefit for accidental
death or dismemberment, and the provider’s interest in those benefits.
6. The name, business address and telephone number of the escrow
agent, and the right of the viator or owner to inspect or receive copies
of the relevant escrow or trust agreements or related documents.
(Added to NRS by 2001, 2172 )
1. A viator may not enter into a viatical settlement within 2
years after the issuance of the policy to which the settlement relates
unless one or more of the following conditions is or has been satisfied:
(a) The policy was issued upon the owner’s exercise of a right of
conversion arising out of a group policy.
(b) The owner of the policy is a charitable organization exempt
from taxation under 26 U.S.C. § 501(c)(3).
(c) The owner of the policy is a business organization.
(d) The viator or owner submits to the provider of viatical
settlements independent evidence that within the 2-year period:
(1) The owner or insured has been diagnosed to have an
illness or condition that is life-threatening or requires a course of
treatment for at least 2 years, long-term care or health care at home, or
any combination of these;
(2) The spouse of the owner or insured has died;
(3) The owner or insured has divorced his spouse;
(4) The owner or insured has retired from full-time
employment;
(5) The owner or insured has become physically or mentally
disabled and a physician determines that the disability precludes him
from maintaining full-time employment;
(6) The owner of the policy was the employer of the insured
and that relationship has terminated;
(7) A final judgment or order has been entered or issued by
a court of competent jurisdiction, on the application of a creditor or
owner of the insured, adjudging the owner or insured bankrupt or
insolvent, or approving a petition for reorganization of the owner or
insured or appointing a receiver, trustee or liquidator for all or a
substantial part of the assets of the owner or insured;
(8) The owner of the policy experiences a significant
decrease in income which is unexpected by him and impairs his reasonable
ability to pay the premium on the policy; or
(9) The owner or insured disposes of his ownership in a
closely held corporation.
2. The independent evidence must be submitted to the insurer when
the provider of viatical settlements submits a request to the insurer to
effect transfer of the policy to him. The insurer shall respond timely to
the request. This section does not prohibit an insurer from exercising
its right to contest a policy on the ground of fraud.
3. If a provider of viatical settlements submits to an insurer a
copy of the owner’s or insured’s certification that one of the events
described in paragraph (d) of subsection 1 has occurred, the
certification conclusively establishes that the viatical settlement is
valid, and the insurer shall timely respond to the provider’s request to
effect a transfer of the policy.
(Added to NRS by 2001, 2173 )
1. A provider of viatical settlements who enters into a settlement
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;
(b) A witnessed document in which the viator represents that he has
a full and complete understanding of the settlement and of the benefits
of the policy, acknowledges that he has entered into the settlement
freely and voluntarily and, if applicable to determine a payment to a
person terminally or chronically ill, acknowledges that he is terminally
or chronically ill and that the illness was diagnosed after the policy
was issued; and
(c) A document in which the insured consents to the release of his
medical records to a provider or broker of viatical settlements and the
insurer that issued the policy covering him.
2. Within 20 days after a viator executes documents necessary to
transfer rights under a policy, or enters into an agreement in any form,
express or implied, to viaticate the policy, the provider of viatical
settlements shall give written notice to the issuer of the policy that
the policy has or will become viaticated. The notice must be accompanied
by a copy of the release of medical records and the application for the
viatical settlement.
(Added to NRS by 2001, 2172 )
1. A provider of viatical settlements shall instruct the viator to
send the executed documents required to effect the change in ownership or
assignment or change of beneficiary of the affected policy to a
designated independent escrow agent. Within 3 business days after the
date the escrow agent receives the documents, or within 3 business days
after the provider receives the documents if by mistake they are sent
directly to him, the escrow agent shall deposit the proceeds of the
settlement into an escrow or trust account maintained in a regulated
financial institution whose deposits are insured by the Federal Deposit
Insurance Corporation.
2. Upon deposit of the proceeds in that account, the escrow agent
shall deliver to the provider the original documents executed by the
viator. Upon the provider’s receipt from the insurer of an acknowledgment
of the change in ownership or assignment or change of beneficiary of the
affected policy, he shall instruct the escrow agent to pay the proceeds
of the settlement to the viator.
3. Payment to the viator must be made within 3 business days after
the date the provider received the acknowledgment from the insurer.
Failure to make the payment within that time makes the viatical
settlement voidable by the viator for lack of consideration until payment
is tendered to and accepted by the viator.
(Added to NRS by 2001, 2173 )
A viatical settlement entered into in this state
must reserve to the viator an unconditional right to terminate the
settlement within 15 days after he receives the proceeds of the
settlement. If the insured dies during that period, the settlement is
terminated, but the proceeds must be repaid to the provider of the
viatical settlement.
(Added to NRS by 2001, 2173 )
1. Contact with an insured to determine the status of his health
after a viatical settlement may be made only by a provider or broker of
viatical settlements who is licensed in this state, or its authorized
representative, and no oftener than once every 3 months if the insured
has a life expectancy of 1 year or more, or once every month if the
insured has a life expectancy of less than 1 year. The provider or broker
shall explain the procedure for those contacts at the time the settlement
is entered into.
2. The limitations of subsection 1 do not apply to contacts for
purposes other than determining status of health.
3. A provider or broker is responsible for the acts of his
authorized representative.
(Added to NRS by 2001, 2173 )
All medical
information solicited or obtained by a licensee under this chapter is
subject to other laws of this state relating to the confidentiality of
the information.
(Added to NRS by 2001, 2173 )
If a provider of viatical settlements
transfers ownership or changes the beneficiary of a viaticated policy, he
shall inform the insured of the transfer or change within 20 days after
it occurs.
(Added to NRS by 2001, 2172 )
The trustee of a trust for a related
provider must agree in writing with the provider of viatical settlements
that the provider is responsible for ensuring compliance with all
statutory and regulatory requirements and that the trustee will make all
records and files related to viatical settlements available to the
Commissioner as if those records and files were maintained directly by
the provider.
(Added to NRS by 2001, 2168 )
ADVERTISING
NRS
688C.350 to 688C.430 , inclusive, apply to advertising of viatical
settlements or related services intended for dissemination in this state,
including advertising on the Internet which is viewed by persons in this
state. To the extent that federal regulation establishes requirements for
disclosure, those sections must be so interpreted as to eliminate or
minimize conflict with the federal requirements.
(Added to NRS by 2001, 2174 )
Each licensee under this
chapter shall establish and continuously maintain a system of control
over the content, form and method of dissemination of all advertisements
of its contracts and services. Each advertisement is the responsibility
of the licensee as well as the person who creates or presents it. A
system of control must include notification to persons authorized by the
licensee who disseminate advertisements, at least annually, of the
requirements and procedures for approval before use of any advertisements
not furnished by the licensee.
(Added to NRS by 2001, 2174 )
An advertisement must be
truthful and not misleading in fact or by implication. The form and
content of an advertisement for viatical settlements must be sufficiently
complete and clear to avoid deception. An advertisement may not have a
capacity or tendency to mislead or deceive, as determined by the
Commissioner from the overall impression it may reasonably be expected to
create upon a person of average education or intelligence in the segment
of the public to which it is directed.
(Added to NRS by 2001, 2175 )
1. The information required to be disclosed under NRS 688C.350
to 688C.430 , inclusive, may not be minimized, obscured,
presented ambiguously or so intermingled with other text of an
advertisement as to be confusing or misleading.
2. An advertisement may not omit material information or use
language or illustrations if the omission or use has a capacity or
tendency to, or does, mislead viators as to the nature or extent of any
benefit, loss covered, premium payable or effect on federal or state
taxes. Making a viatical settlement available for inspection before it is
consummated, or offering to refund payment if the viator is not satisfied
within the period prescribed in NRS 688C.300 , does not remedy misleading statements.
3. An advertisement may not use the name or title of an insurer or
policy unless the advertisement has been approved by the insurer.
4. An advertisement may not state or imply that interest charged
on an accelerated death benefit or loan on a policy is unfair or in any
way improper.
5. The words “free,” “no additional cost” or words of similar
import may not be used with respect to any benefit or service unless true.
(Added to NRS by 2001, 2175 )
1. A testimonial, appraisal or analysis used in an advertisement
must be genuine, represent the present opinion of the author, apply to
the viatical settlement advertised, if any, and be reproduced with
sufficient completeness to avoid misleading viators. In using a
testimonial, appraisal or analysis, a licensee under this chapter makes
the statements contained therein his own, and the statements must satisfy
the requirements of NRS 688C.350 to
688C.430 , inclusive.
2. If the person making a testimonial, appraisal, analysis or
endorsement has a financial interest in the provider of viatical
settlements or a related organization, or receives a benefit other than
required wages, that fact must be prominently disclosed in the
advertisement.
3. An advertisement may not state or imply that a viatical
settlement, benefit or service has been approved or endorsed by a group,
society or other organization unless that is the fact and any
relationship between the organization and the provider of viatical
settlements is disclosed. If the organization is owned, controlled or
managed by the provider, or receives any payment or other consideration
from the provider for making the endorsement or testimonial, that fact
must be disclosed in the advertisement.
4. An advertisement may not contain statistical information unless
it accurately reflects recent and relevant facts. The source of all
statistics used in an advertisement must be identified.
(Added to NRS by 2001, 2175 )
An advertisement may not
disparage insurers, providers of insurance, other providers or brokers of
viatical settlements, policies, services or methods of marketing.
(Added to NRS by 2001, 2175 )
1. The name of the provider of viatical settlements must be
clearly identified in an advertisement about him or his viatical
settlements. If a viatical settlement is advertised, it must be
identified by number or other appropriate description. If an application
is part of an advertisement, the name of the provider must be shown on
the application.
2. An advertisement may not use a trade name, designation of a
group, name of a parent or particular division of a provider of viatical
settlements, service mark, slogan or other device or reference without
disclosing the identity of the provider of viatical settlements licensed
under this chapter if the advertisement would have the capacity or
tendency to mislead as to his true identity or create the impression that
an organization other than the licensee would have a responsibility for
the financial obligation under a viatical settlement. The name of the
licensee must be stated in all advertisements.
(Added to NRS by 2001, 2176 )
1. An advertisement may not use a combination of words, symbols or
physical materials that by their content, phraseology, shape, color or
other characteristic are so similar to a combination of words, symbols or
physical materials used by a governmental program or agency, or otherwise
appear to be of such a nature, that they tend to mislead viators into
believing that the solicitation is connected with a governmental program
or agency. An advertisement may not create the impression that a provider
of viatical settlements, his financial condition or business practices,
the payment of his claims or the merit, desirability or advisability of
his viatical settlements is recommended or endorsed by a governmental
authority.
2. An advertisement may state that a provider of viatical
settlements is licensed in the state in which the advertisement appears,
if it does not imply that competing providers are not so licensed. The
advertisement may suggest consulting the licensee’s website or
communicating with the Commissioner to ascertain whether the state
requires licensing and, if so, whether a particular provider or broker of
viatical settlements is licensed.
(Added to NRS by 2001, 2176 )
1. If an advertiser emphasizes the speed with which viatication
will occur, the advertisement must disclose the average time from
completed application to date of offer and from acceptance of offer to
receipt of funds by the viator.
2. If an advertiser emphasizes the monetary amounts available to
viators, the advertisement must disclose the average purchase price as a
fraction of face value obtained by viators who contracted with the
advertiser during the preceding 6 months.
(Added to NRS by 2001, 2176 )
UNLAWFUL ACTS; FRAUD; ENFORCEMENT
It is unlawful knowingly or
intentionally:
1. For any person to interfere with the enforcement of the
provisions of this chapter or an investigation of a possible violation of
those provisions.
2. For a person engaged in the business of viatical settlements to
permit any person convicted of a felony involving dishonesty or breach of
trust to participate in that business.
(Added to NRS by 2001, 2177 )
It is a category D felony, and the
offender shall be punished as provided in NRS 193.130 , for any person, knowingly or with intent to
defraud, to do any of the following acts in order to deprive another of
property or for his own pecuniary gain:
1. Present, cause to be presented or prepare with knowledge or
belief that it will be presented, false information to or by a provider
or broker of viatical settlements, a financing agent, an insurer, a
provider of insurance or any other person, or to conceal information, as
part of, in support of or concerning a fact material to:
(a) An application for the issuance of a policy or viatical
settlement;
(b) The underwriting of a policy or viatical settlement;
(c) A claim for payment or other benefit under a policy or viatical
settlement;
(d) A premium paid on a policy;
(e) A payment or change of beneficiary or ownership pursuant to a
policy or viatical settlement;
(f) The reinstatement or conversion of a policy;
(g) The solicitation, offer or effectuation of a policy or viatical
settlement; or
(h) The issuance of written evidence of a policy or viatical
settlement.
2. In furtherance of a fraud or to prevent detection of a fraud:
(a) Remove, conceal, alter, destroy or sequester from the
Commissioner assets or records of a licensee under this chapter or other
person engaged in the business of viatical settlements;
(b) Misrepresent or conceal the financial condition of a licensee,
a financing agent, an insurer or other person;
(c) Transact the business of viatical settlements in violation of
this chapter; or
(d) File with the Commissioner or analogous officer of another
jurisdiction a document containing false information or otherwise conceal
information about a material fact from the Commissioner or other officer.
3. Present, cause to be presented or prepare with knowledge or
belief that it will be presented to or by a provider or broker of
viatical settlements, a financing agent, an insurer, a provider of
insurance or any other person, in connection with a viatical settlement
or transaction of insurance, a policy fraudulently by the insured or
owner or an agent of either.
4. Embezzle, steal, misappropriate or convert money, premiums,
credits or other property of a provider of viatical settlements, a
viator, an insurer, an insured, an owner of a policy or other person
engaged in the business of viatical settlements or insurance.
5. Attempt to commit, assist, aid, abet or conspire to commit an
act or omission described in subsections 1 to 4, inclusive.
(Added to NRS by 2001, 2176 )
1. A person engaged in the business of viatical settlements who
knows or reasonably believes that a violation of NRS 688C.450 is being, has been or will be committed
shall promptly report the facts and circumstances pertaining to the
violation to the Commissioner.
2. Any other person who knows or reasonably believes that a
violation of NRS 688C.450 is being,
has been or will be committed may furnish to the Commissioner the
information required by the Commissioner.
(Added to NRS by 2001, 2177 )
1. Except as otherwise provided in subsection 2, a person
furnishing information of the kind described in NRS 688C.460 is immune from liability and civil action if
the information is furnished to or received from:
(a) The Commissioner or his employees, agents or representatives;
(b) Another federal, state or local law enforcement or regulatory
officer or his employees, agents or representatives;
(c) Another person involved in the prevention or detection of
violations of NRS 688C.450 or similar
offenses or his employees, agents or representatives;
(d) The National Association of Insurance Commissioners or other
regulatory body overseeing life insurance or viatical settlements, or its
employees, agents or representatives; or
(e) The insurer that issued the policy concerned in the information.
2. The immunity provided in subsection 1 does not extend to a
statement made with actual malice. In an action brought against a person
for filing a report or furnishing other information concerning a
violation of NRS 688C.450 , the
plaintiff must plead specifically that the defendant acted with actual
malice.
3. This section does not supplant or modify any other privilege or
immunity at common law or under another statute enjoyed by a person
described in subsection 1.
(Added to NRS by 2001, 2178 )
1. A document or information furnished pursuant to NRS 688C.470
or obtained by the Commissioner in an
investigation of an actual or suspected violation of NRS 688C.450 is confidential and privileged, is not a
public record and is not subject to discovery or subpoena in a civil
action or criminal prosecution.
2. Subsection 1 does not prohibit the Commissioner from disclosing
documents or evidence so furnished or obtained:
(a) In an administrative or judicial proceeding to enforce a
statute administered by him;
(b) To another federal, state or local law enforcement or
regulatory officer, another person involved in the prevention or
detection of violations of NRS 688C.450 , or similar offenses, or the National
Association of Insurance Commissioners; or
(c) To a person engaged in the business of viatical settlements who
is aggrieved by the violation.
3. Disclosure of a document or evidence under subsection 2 does
not abrogate or modify the privilege covering it under subsection 1.
(Added to NRS by 2001, 2178 )
1. Each licensee under this chapter shall establish and maintain
protective measures against fraud which are reasonably calculated to
prevent, detect and assist in the prosecution of violations of NRS
688C.450 . The Commissioner may order,
or a licensee may request and the Commissioner may approve, modifications
of the measures otherwise required under this section, more or less
restrictive than those measures, as necessary to protect against fraud.
Required measures are employment of or contracting with investigators and
submission of a plan to the Commissioner which includes:
(a) A description of the procedures for detecting and investigating
possible violations of NRS 688C.450
and for resolving inconsistencies between medical records and
applications for insurance;
(b) A description of the procedures for reporting possible
violations to the Commissioner;
(c) A description of the plan for educating and training
underwriters and other personnel against fraud; and
(d) A description or chart of the organizational arrangement of the
personnel responsible for detecting and investigating possible violations
of NRS 688C.450 and for resolving
inconsistencies between medical records and applications for insurance.
2. A plan submitted to the Commissioner pursuant to subsection 1
is privileged and confidential, not a public record and not subject to
discovery or subpoena in a civil action or criminal prosecution.
(Added to NRS by 2001, 2178 )
An application or contract for a viatical settlement,
however transmitted, must contain a statement substantially as follows:
“A person who knowingly presents false information in an application for
a viatical settlement is guilty of insurance fraud and subject to fine
and imprisonment.” The lack of such a statement is not a defense in a
prosecution for violation of NRS 688C.450 .
(Added to NRS by 2001, 2177 )
1. In addition to the penalties and other means of enforcement
provided under this chapter:
(a) If a person violates a provision of this chapter or of a
regulation adopted under this chapter, the Commissioner may seek an
injunction and apply for temporary and permanent orders he determines to
be necessary to restrain the violator.
(b) A person who violates a provision of this chapter is subject to
an administrative fine of not more than $1,000 for each violation.
(c) In addition to a criminal penalty imposed, the court shall
order restitution to the person aggrieved by the violation.
2. A person aggrieved by a violation of this chapter may bring a
civil action against the violator to recover the damages suffered.
(Added to NRS by 2001, 2179 )
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