Subject 120-2-93 LIFE SETTLEMENTS REGULATION
This regulation is promulgated by the Commissioner of Insurance pursuant to the authority set forth in O.C.G.A. §§ 33-59-1et seq.
|(1)|| This regulation applies to any Provider
of a Life Settlement Contract and any Life Settlement Broker as those terms are
defined in O.C.G.A. § 33-59-2 as
well as any person who enters into a life settlement contract with an owner of
a policy or who facilitates any life settlement contract unless that person is
defined as being specifically excluded from registration or licensure by
O.C.G.A. § 33-59-2(10)
or O.C.G.A. § 33-59-2(18).
The purposes of this regulation include:
All terms defined in O.C.G.A. § 33-59-1et seq., hereinafter referred to as the "Life Settlements Act" or "Act" which are used in this Regulation shall have the same meaning as in the Act.
|(1)||Except as provided for in O.C.G.A. § 33-59-2(18), it is unlawful for any person to enter into a life settlement contract with an owner of a policy or to hold oneself out as a provider in this state without a valid provider license issued by the Commissioner of Insurance. To qualify for and hold a license as a provider in this state, a provider must otherwise be in compliance with Article 3 of Chapter 59 of Title 33 of the Official Code of Georgia Annotated and this Regulation.|
|(2)|| The provider shall file with the
Commissioner of Insurance an application for a license upon a form to be
furnished by the Commissioner of Insurance, which application should include or
have attached the following information and documents and any other materials
the Commissioner of Insurance deems necessary to adequately assess the merits
of the application:
|(3)||The Commissioner may not issue a license if he or she determines that the provider or any principal thereof is not competent, trustworthy, financially responsible; has had an insurance license refused, revoked or suspended by any state, or otherwise fails to satisfy the requirements of O.C.G.A. § 33-59-3 and the Commissioner may suspend, revoke, or refuse to renew a provider's license pursuant to O.C.G.A. § 33-59-4(a).|
|(4)||Before becoming registered as a life settlement broker in this state, the person or entity seeking registration must have a current and valid life license in this state or his or her home state for at least one year. Additionally, non-resident producers shall have a valid non-resident producer license in this state.|
|(1)||Each provider shall file with the Commissioner an annual renewal application by May 1st of every year. The renewal application shall include information and documents and other materials the Commissioner deems necessary to adequately assess the renewal application.|
|(2)|| Each provider
shall file with the Commissioner an annual statement by May 1 of every year.
The statement shall include all of the following information and documents and
any other materials the Commissioner deems necessary.
|(2)||Any provider that willfully fails to file an annual renewal application and statement shall be subject to fines and other penalties as set forth at O.C.G.A. § 33-59-6(a)(3).|
|(3)||The term of a provider license shall be equal to that of a domestic stock life insurance company and the term of a life settlement broker registration shall be equal to that of an insurance producer license. Licenses or registrations requiring periodic renewal may be renewed on their anniversary date upon payment of the periodic renewal fee as specified in this Chapter. Failure to pay the fees on or before the renewal date shall result in expiration of the license or registration.|
|(1)||The Commissioner may conduct an examination of the business affairs of any licensee, registrant or applicant under this chapter as often as the Commissioner in his or her sole discretion deems appropriate with all expenses incurred to be paid by the licensee, registrant or applicant. All such examinations shall comply with the requirements of O.C.G.A. § 33-59-7 and all other applicable laws and regulations.|
|(2)||Nothing in this rule shall limit or abridge any other investigatory powers of the Commissioner vested in him or her by Title 33 of the Georgia Insurance Code.|
|(1)||A provider shall comply with the requirements of this Chapter and O.C.G.A. §§ 33-59-1et seq. and shall not engage and or deal with any person to perform the functions of a life settlement broker as defined at O.C.G.A. § 33-59-2(10)unless such person holds a current, valid registration as a life settlement broker.|
|(2)||Any person or life settlement broker shall comply with the requirements of this Chapter and O.C.G.A. §§ 33-59-1et seq. and shall not present a policy to, solicit bids or offers from, engage and or deal with any person or entity to perform the functions of a provider as defined at O.C.G.A. § 33-59-2(18)unless such person or entity holds a current, valid license as a provider.|
|(3)||Any fee paid by a provider, party, individual, or an owner to a life settlement broker in exchange for services provided to the owner pertaining to a life settlement contract shall be computed as a percentage of the offer obtained, not the face value of the policy.|
|(4)|| No person shall enter
into a life settlement contract during a two-year period commencing with the
date of issuance of the policy unless the owner provides the provider with the
certification required under O.C.G.A. § 33-59-11(n)(1)
or the owner submits to the provider the independent evidence required pursuant
to O.C.G.A. § 33-59-11(n)(2).
|(5)||It is a violation of this chapter for any person, provider, life settlement broker, or any other party related to the business of life settlements to commit a fraudulent life settlement act, including but not limited to, stranger originated life insurance.|
|(6)||Within three business days after receipt from the owner of documents to effect the transfer of the insurance policy, the provider shall pay the proceeds of the settlement to an escrow or trust account managed by a trustee or escrow agent in a state or federally chartered financial institution pending acknowledgement of the transfer by issuer of the policy. The trustee or escrow agent shall be required to transfer the proceeds due to the owner within three business days of acknowledgement of the transfer from the insurer.|
|(7)||All life settlement contracts shall provide that the owner may rescind the contract on or before 15 days after the date it is executed by all parties thereto. If rescission is exercised by the owner, all proceeds, premiums, loans, etc. must be repaid and notice given within the rescission period. If the owner dies during the rescission period subject to all repayments having been made, the contract is deemed to have been rescinded.|
|(8)||Pursuant to O.C.G.A. § 33-59-14(c)(1), any person engaged in the business of life settlements shall notify the Enforcement Division of the Commissioner's office if he or she has knowledge or a reasonable belief that a fraudulent life settlement act is being, has been or will be committed. Notification can be made by telephone, electronic or written communication.|
|(9)||No person shall engage in the business of life settlements unless they have obtained the appropriate license; applied for, or received the appropriate registration; or have been designated as an authorized representative by a properly licensed or registered entity on a form prescribed by the Commissioner. A violation of this section shall be considered an unfair trade practice and a felony.|
|(1)||Life insurance companies are permitted to ask questions of any life insurance applicant as to whether the proposed owner is intending to finance the premiums with the assistance of financing from a lender that will use the policy as collateral to support the financing. The life insurance company may reject the application if it can be shown that the premium financing provides funds which can be used for a purpose other than paying for the premiums, costs, and expenses associated with obtaining and maintaining the life insurance policy and loan as described in O.C.G.A. § 33-59-10(b). If the financing does not violate O.C.G.A. § 33-59-13, life insurance companies may issue the disclosures and affirmations set forth in O.C.G.A. § 33-59-10(c).|
|(2)||Life insurance companies authorized to do business in this state shall respond to a request for verification of coverage from a provider within 30 days of the date a request is received. The verification of coverage must be on a form prescribed by the Commissioner's office.|
|(3)||A life insurance company shall not unreasonably delay effecting either a change of policy ownership or of a beneficiary under a policy that is subject to a life settlement contract lawfully entered into in this state or with a resident of this state.|
|(1)||Any person failing to comply with the requirements of this Chapter and O.C.G.A. §§ 33-59-1et seq. shall be subject to all such penalties and relief as may be appropriate under the laws of this State. Furthermore, a violation of this Chapter shall be considered an unfair trade practice pursuant to state law and subject to such penalties provided by state law.|
|(2)||It is unlawful for any person, other than a licensed provider or a registered life settlement broker, to enter into any life settlement contract with an owner of a policy or facilitate any life settlement contract unless that party is defined as being specifically excluded from registration or licensure by O.C.G.A. § 33-59-2(10) or O.C.G.A. § 33-59-2(18). A violation of this section shall be considered a fraudulent life settlement act and the violator(s) subject to fines and penalties as stipulated at O.C.G.A. § 33-59-15 and O.C.G.A. § 33-59-16.|
If any provision of this Chapter or the application thereof to any person or circumstance, is held invalid by a court of competent jurisdiction, the remainder of the Chapter or the applicability of such provision to other person or circumstances shall not be affected.