Current through September 24, 2024
(1) A disclosure document containing the
disclosures required by the Life Settlements Act and this rule shall be
provided before or concurrent with taking an application for a life settlement
contract:
(a) The disclosure document shall
contain the following language: "All medical, financial, personal information
solicited or obtained by a life settlement company or life settlement broker
about an owner and insured, including the owner's and insured's identity or the
identity of family members, a spouse or a significant other, may be disclosed
as necessary to effect the life settlement between the owner and the life
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 the funds for the purchase of this policy. You
may be asked to renew your permission to share information every two
years."
(b) The information shall
not be disclosed in any form to any person, unless disclosure:
1. Is requested by the commissioner or any
other governmental officer or agency; or
2. Is necessary to effect the life settlement
between the owner and the life settlement provider, and the owner and insured
have provided prior written consent to the disclosure; or
3. Is a term of or condition to the transfer
of a life policy by one life provider to another life settlement
provider.
(c)
Notwithstanding any other provisions, for the purposes of complying with
Paragraph (b) above, the use of this information by the life settlement
provider or the life settlement broker or their authorized representatives in
the following situations shall be deemed necessary to the completion of the
life settlement contract or an acceptable term of or condition to the transfer
of a life policy from one life settlement provider to another life settlement
provider:
1. To make contacts with the insured
for the purpose of determining his or her health status;
2. To detect fraud in accordance with the
life settlement provider's or life settlement broker's anti-fraud
plan;
3. To effectuate
institutional risk control within the life settlement provider or life
settlement broker;
4. To purchase
stop loss coverage; or
5. To permit
a financing entity to finance the purchase of policies by a life settlement
provider.
(2)
No later than the date on which the life settlement contract is signed by all
parties, the life settlement provider shall provide the following disclosures
displayed conspicuously in the life settlement contract or in a separate
document signed by the owner and the life settlement provider or life
settlement broker:
(a) The name, address and
telephone number of the life settlement provider;
(b) The name, business address, and telephone
number of any independent third party escrow agent involved in the transaction,
the right of the owner to inspect or receive copies of the relevant escrow or
trust agreements or documents;
(c)
If a life settlement broker is involved, the amount and method of calculating
the broker's compensation. The term "compensation" includes anything of value
paid or given to a life settlement broker for the placement of a
policy.
(d) If a life settlement
broker is involved in the transaction, the broker shall disclose all settlement
offers received by the broker for the owner's life policy.
(3) Before or concurrent with taking an
application for a life settlement contract and the date on which the life
settlement contract is signed by all parties, the life settlement provider
shall clearly provide in substance the following fraud warnings to the owner
displayed conspicuously in the life settlement contract or in a separate
document signed by the owner and the life settlement provider or life
settlement broker:
"It is a crime to knowingly provide false, incomplete or
misleading information in an application for insurance or an application for a
viatical or life settlement contract with an intent to defraud. Penalties
include imprisonment, fines and denial of insurance benefits."
(4) If the life settlement
provider transfers ownership or changes the beneficiary of the life policy, the
provider shall communicate the change in ownership or beneficiary to the
insured within twenty (20) days after the change.
Authority: T.C.A. §§
56-50-105,
56-50-106,
56-50-108, 56-50-109, 56-50-110,
56-53-102, 56-53-104, and 5653-111.
