Current through Reg. 50, No. 13; March 28, 2025
(a)
Applicant. In this section, "applicant" means a person applying for a life
settlement broker or provider license.
(b) License requirements.
(1) A person engaging in business as a life
settlement broker or life settlement provider in this state must apply for and
obtain a license issued by the department as required by this subchapter,
except that:
(A) a person may operate as a
life settlement broker without a life settlement broker license if that person
has held a life insurance agent license in this state for at least one year and
holds an active license, or has held a life insurance agent license in that
person's home state for at least one year and is licensed as a nonresident
agent in this state. The life insurance agent must notify the department in
accord with §
3.1725 of this title (relating to
Life Insurance Agent Notification) and Insurance Code Chapter 1111A;
and
(B) a person may operate as a
life settlement broker without a life settlement broker license if that person
is a licensed attorney, certified public accountant, or financial planner who
is retained in the type of practice customarily performed in a professional
capacity to represent the owner and whose compensation for the life settlement
transaction is not paid directly or indirectly by the provider or any other
person, except the owner.
(2) A life settlement broker or provider is
prohibited from concurrently holding more than one license of the same type and
in the same legal name.
(3) A life
settlement broker or provider subject to the provisions of this subchapter must
apply for issuance of the life settlement broker's or provider's license in the
life settlement broker's or provider's legal name and may only act within the
scope of authority granted by the license. If a person holds a license
authorizing the person to act as a life settlement broker or provider, that
person need not obtain an additional license to participate in a registered
partnership or corporate entity of the same type in this state, but the
partnership or corporate entity with which the person participates must apply
for and hold, in its own legal name, a separate license to conduct business as
a life settlement broker or provider in this state.
(4) A licensed life settlement broker or
provider may have additional offices or do business under assumed names, as
that term is defined in §
19.901 of this title (relating to
Definitions Concerning Conduct of Licensed Agents), without obtaining an
additional license. However, the life settlement broker or provider must
furnish the department with a list identifying any and all offices from which
the life settlement broker or provider will conduct life settlement business
and showing any and all assumed names that the life settlement broker or
provider will utilize in conducting life settlement business at any of those
offices.
(A) Where such a filing is required
under the Assumed Business or Professional Name Act, Business and Commerce Code
Chapter 71, or any similar statute, the life settlement broker or provider must
provide the department with a copy of the valid assumed name certificate
reflecting proper registration of each assumed name utilized by the life
settlement broker or provider.
(B)
A life settlement broker or provider doing business under an assumed name must
comply with subsection (c)(5) of this section.
(c) Information required with application. In
addition to a complete License Application for a Life Settlement Provider or
Broker form, an applicant for a license to engage in business as a life
settlement broker or provider must submit the items set forth in paragraphs (1)
- (7) of this subsection, as follows:
(1)
either:
(A) a certificate of account status
issued by the Texas Comptroller of Public Accounts reflecting that the
applicant is in good standing or temporary good standing; or
(B) a certification signed by an officer or
partner of the applicant attesting that the applicant is not subject to Texas
Tax Code Chapter 171;
(2) if a provider, a detailed plan of
operation, including, but not limited to the following, where applicable:
(A) history:
(i) a brief history of the applicant since
its formation, if an entity;
(ii) a
list of all states in which the applicant holds a license or registration as a
life settlement provider or viatical settlement provider and the date(s) that
the applicant obtained such licensure or registration;
(iii) a list of all states in which the
applicant is currently doing business, but in which a license or registration
is not required; and
(iv) a list
and description of any pending lawsuits or judgments naming the applicant as
defendant or co-defendant;
(B) management:
(i) evidence that the applicant has a good
business reputation, and a detailed description of the experience, training, or
education that qualifies the applicant to conduct the business of life
settlements as a life settlement provider; and
(ii) if the applicant is a subsidiary of a
parent or holding company, an organizational chart showing the relationship
between the parent and all affiliated entities. "Affiliate" and "subsidiary"
have the meaning assigned by Insurance Code §
823.003; and
(C) marketing plan:
(i) a detailed description of the applicant's
marketing plan; and
(ii) the
applicant's projected volume of business in Texas and nationwide for the first
three years after licensure in Texas;
(3) an antifraud plan that meets the
requirements of Insurance Code §
1111A.022;
(4) a completed Biographical Affidavit form
to be used as an attachment to the License Application for a Life Settlement
Provider or Broker form for each owner, partner, director, officer, key
management personnel, or employee having authority to direct the management of
the organization, and any person who has ownership of 10 percent or greater of
the applicant or the applicant's stock;
(5) the applicant's legal name, including any
assumed name, used by a life settlement broker or provider in the conduct of
business under a license is subject to the requirements of §
19.902 of this title (relating to
One Agent, One License), except that a separate application is not required for
a life settlement broker or provider who conducts business under a single
assumed name and registers that name with the department on the life settlement
broker's or provider's application for license;
(6) if a business entity domiciled in Texas,
a current copy of its certificate of status from the Office of the Texas
Secretary of State; and
(7) if a
business entity not domiciled in Texas:
(A) a
current copy of its certificate of good standing from the state of its
domicile; and
(B) with the license
application, a completed appointment of an agent for service of process, unless
the applicant has filed with the department the applicant's written irrevocable
consent that any action against the applicant may be commenced by service of
process on the commissioner. The applicant must attach the completed form to
the application for license. The applicant must appoint as the agent for
service of process a person with a Texas address who has an established place
of business and who can be easily located and served with notices, legal
process, and papers.
(d) Application process.
(1) If an applicant for a license to operate
as a life settlement broker or provider has complied with all application
procedures in this section, the commissioner will issue the applicant a license
to engage in business as a life settlement broker or provider unless the
commissioner determines that the application should be denied based on any one
or more of the factors set forth in Insurance Code Chapter 1111A.
(2) If the commissioner denies the
application and the applicant requests a hearing, or if at any time the
applicant no longer meets the requirements for licensure, the procedure for the
denial, renewal, revocation, suspension, annulment, or withdrawal of a license
is governed by §
1.32 of this title (relating to
Licenses).
(3) The department will
not accept applications that do not contain all required information or
certifications.
(e)
License fee. An applicant must submit with each completed application for
license at the time of filing, a two-year license fee in the amount of $50 for
a life settlement broker, or $100 for a life settlement provider. All license
fees are nonrefundable and nontransferable, including fees for applications
that are denied or incomplete.
(f)
Partnership, corporation, or other business entity license. A partnership,
corporation, or other business entity may file an application for a license to
engage in business as a life settlement broker or provider only if each owner,
partner, director, member, officer, and designated employee is named in the
application.
(g) Notice of
suspension or revocation. A life settlement broker or provider must notify the
department of, and must deliver to the department a copy of, any applicable
order or judgment not later than the 30th day after the date of the:
(1) suspension or revocation of the life
settlement broker's or provider's right to transact business in another
state;
(2) receipt of an order or
notice of hearing to show cause why the life settlement broker's or provider's
license or license in another state should not be suspended or revoked;
or
(3) imposition of an
administrative or criminal penalty, forfeiture, or sanction on the life
settlement broker or provider for the violation of the laws of this state, any
other state, or the federal government.
(h) Effect of criminal conduct. An applicant
for or holder of a life settlement broker's or provider's license, including
each owner, partner, director, member, officer, and any person who has
ownership of 10 percent or greater of the applicant or the applicant's stock,
is subject to the requirements of Insurance Code §
1111A.004 and Chapter
1, Subchapter D, of this title (relating to Effect of Criminal
Conduct).
(i) Requirement of
additional information. In addition to the information required in this
section, the department may ask for other information necessary to determine
whether the applicant complies with the requirements of Insurance Code §
1111A.003 and this
subchapter for purposes of issuing or renewing a life settlement broker's or
provider's license. If an applicant does not respond to a request for
additional information within 10 days following the date the applicant receives
the request, the department will consider the application withdrawn. The
applicant can request an extension, but must provide a reasonable basis for the
need for additional time.
(j)
Material change. If there is a material change to any information provided in
the application for license, the life settlement broker or provider must submit
written notification of the change to the department not later than 30 days
after the date the change occurs, using the Application for Renewal, Surrender,
or Change of Information for a Life Settlement Provider or Broker
form.
(k) Submission required for
existing brokers and providers. A life settlement broker or provider, including
one operating under a temporary license or operating under a certificate of
authority issued prior to September 1, 2011, must submit an application in
accord with this section not later than 30 days after the effective date of
this subchapter.
