H.B. 187 Enrolled

VIATICAL SETTLEMENT ACT
2004 GENERAL SESSION
STATE OF UTAH
Sponsor: James A. Dunnigan

LONG TITLE
General Description:
This bill modifies the Viatical Settlements Act to address licensing and rulemaking
provisions.
Highlighted Provisions:
This bill:
. establishes additional criteria for licensure;
. provides additional rulemaking authority; and
. makes technical changes.
Monies Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
31A-36-104, as enacted by Chapter 81, Laws of Utah 2003
31A-36-119, as enacted by Chapter 81, Laws of Utah 2003

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 31A-36-104 is amended to read:
31A-36-104. License requirements, revocation, and denial.
(1) (a) A person may not, without first obtaining a license from the commissioner,
operate in or from this state as:
(i) a provider of viatical settlements; or

(ii) a producer of viatical settlements.
(b) Viatical settlements are included within the scope of the life insurance producer line of
authority.
(2) (a) To obtain a license as a provider of viatical settlements, an applicant shall:
(i) comply with Section 31A-23a-117 ;
(ii) file an application; and
(iii) pay the license fee.
(b) If an applicant complies with Subsection (2)(a), the commissioner shall investigate the
applicant and issue a license if the commissioner finds that the applicant is competent and
trustworthy to engage in the business of providing viatical settlements by experience, training, or
education.
[(2)] (3) In addition to the requirements in Sections 31A-23a-111 , 31A-23a-112 and
31A-23a-113 , the commissioner may refuse to issue, suspend, revoke, or refuse to renew the
license of a provider of viatical settlements or producer of viatical settlements if the commissioner
finds that:
(a) a provider of viatical settlements demonstrates a pattern of unreasonable payments to
viators;
(b) the applicant or licensee, or an officer, partner, member, or key management
personnel:
(i) has, whether or not a judgment of conviction has been entered by the court, been
found guilty of, or pleaded guilty or nolo contendere to:
(A) a felony; or
(B) a misdemeanor involving fraud or moral turpitude; [or]
(ii) violated any provision of this chapter; or
(iii) has been subject to a final administrative action by another state or federal
jurisdiction.
(c) a provider of viatical settlements has entered into a viatical settlement not approved
under this chapter;

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(d) a provider of viatical settlements has failed to honor obligations of a viatical
settlement; [or]
(e) a provider of viatical settlements has assigned, transferred, or pledged a viaticated
policy to a person other than:
(i) a provider of viatical settlements licensed under this chapter;
(ii) a purchaser of the viatical settlement;
(iii) an accredited investor as defined in Regulation D, Rule 501, 17 C.F.R. Sec. 230.501;
(iv) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A;
(v) a financing entity;
(vi) a special purpose entity; or
(vii) a related provider trust[.]; or
(f) a provider of viatical settlements has failed to maintain a standard set forth in
Subsection (2)(b).
[(3)] (4) If the commissioner denies a license application or suspends, revokes, or refuses
to renew the license of a provider of viatical settlements or producer of viatical settlements, the
commissioner shall conduct an adjudicative proceeding under Title 63, Chapter 46b,
Administrative Procedures Act.
Section 2. Section 31A-36-119 is amended to read:
31A-36-119. Authority to make rules.
[The] In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commissioner may adopt rules to:
(1) establish the requirements for the annual statement required under Section
31A-36-106 ;
(2) establish standards for evaluating the reasonableness of payments under viatical
settlements [to persons chronically ill or terminally ill, including the regulation of the rates of
discount used to determine the amount paid in exchange for an assignment, transfer, sale, devise,
or bequest of a benefit under a policy];
(3) establish appropriate licensing requirements, fees, and standards for continued

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licensure for:
(a) providers of viatical settlements; and
(b) producers of viatical settlements;
(4) require a bond or otherwise ensure financial accountability of:
(a) providers of viatical settlements; and
(b) producers of viatical settlements;
(5) govern the relationship of insurers with providers of viatical settlements and producers
of viatical settlements during the viatication of a policy;
(6) determine the specific disclosures required under Section 31A-36-108 ;
(7) determine whether advertising for viatical settlements violates Section 31A-36-112 ;
[and]
(8) determine the information to be provided to the commissioner under Section
31A-36-114 and the manner of providing the information[.];
(9) determine additional acts or practices that are prohibited under Section 31A-36-111 ;
(10) establish payment requirements for the payments in Section 31A-36-110 ; and
(11) establish the filing procedure for the forms listed in Subsection 31A-36-105 (1).

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