(1) If a life settlement provider transfers ownership or changes the beneficiary of a settled policy, the life settlement provider shall inform the insured of the transfer or change within 20 calendar days.
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Terms Used In Utah Code 31A-36-109

  • Application: means a document:
         (10)(a)
              (10)(a)(i) completed by an applicant to provide information about the risk to be insured; and
              (10)(a)(ii) that contains information that is used by the insurer to evaluate risk and decide whether to:
                   (10)(a)(ii)(A) insure the risk under:
                        (10)(a)(ii)(A)(I) the coverage as originally offered; or
                        (10)(a)(ii)(A)(II) a modification of the coverage as originally offered; or
                   (10)(a)(ii)(B) decline to insure the risk; or
         (10)(b) used by the insurer to gather information from the applicant before issuance of an annuity contract. See Utah Code 31A-1-301
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Chronically ill: means :
         (3)(a) being unable to perform at least two activities of daily living, such as eating, toileting, moving from one place to another, bathing, dressing, or continence;
         (3)(b) requiring substantial supervision for protection from threats to health and safety because of severe cognitive impairment; or
         (3)(c) having a level of disability similar to that described in Subsection (3)(a). See Utah Code 31A-36-102
  • Contract: A legal written agreement that becomes binding when signed.
  • Fiduciary: A trustee, executor, or administrator.
  • Form: means , in addition to a form as defined in Section 31A-1-301:
         (6)(a) a life settlement;
         (6)(b) a disclosure to an owner;
         (6)(c) a notice of intent to settle; or
         (6)(d) a verification of coverage. See Utah Code 31A-36-102
  • Insurance: includes :
              (96)(b)(i) a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
              (96)(b)(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
              (96)(b)(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
  • Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy and includes:
              (103)(a)(i) a policyholder;
              (103)(a)(ii) a subscriber;
              (103)(a)(iii) a member; and
              (103)(a)(iv) a beneficiary. See Utah Code 31A-1-301
  • Life expectancy: means the mean number of months an individual insured under a policy to be settled can be expected to live considering medical records and appropriate experiential data. See Utah Code 31A-36-102
  • Life settlement: includes :
              (8)(b)(i) the transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns a policy if the trust or other entity is formed or operated for the principal purpose of acquiring one or more policies; or
              (8)(b)(ii) a premium finance loan made for a policy by a lender to an owner on, before, or after the date of issuance of the policy if the owner:
                   (8)(b)(ii)(A) receives on the date of the premium finance loan a guarantee of a future life settlement value of the policy; or
                   (8)(b)(ii)(B) agrees on the date of the premium finance loan to sell the policy or any portion of the policy's death benefit on a date following the issuance of the policy. See Utah Code 31A-36-102
  • Life settlement producer: means a person licensed in the state as a life insurance producer that on behalf of an owner and for consideration offers or attempts to negotiate a life settlement between the owner and one or more life settlement providers. See Utah Code 31A-36-102
  • Life settlement provider: means a person other than an owner that enters into or effectuates a life settlement. See Utah Code 31A-36-102
  • Life settlement purchaser: means a person that, to derive an economic benefit:
              (11)(a)(i) provides a sum of money as consideration for a policy or an interest in the death benefits of a policy; or
              (11)(a)(ii) owns, acquires, or is entitled to a beneficial interest in a trust that:
                   (11)(a)(ii)(A) owns a life settlement; or
                   (11)(a)(ii)(B) is the beneficiary of a policy that has been or will be the subject of a life settlement. See Utah Code 31A-36-102
  • Month: means a calendar month, unless otherwise expressed. See Utah Code 68-3-12.5
  • Order: means an order of the commissioner. See Utah Code 31A-1-301
  • Owner: means any of the following who resides in this state and seeks to enter into a life settlement:
              (12)(a)(i) the owner of a policy; or
              (12)(a)(ii) the holder of a certificate of a group policy. See Utah Code 31A-36-102
  • Person: includes :
         (146)(a) an individual;
         (146)(b) a partnership;
         (146)(c) a corporation;
         (146)(d) an incorporated or unincorporated association;
         (146)(e) a joint stock company;
         (146)(f) a trust;
         (146)(g) a limited liability company;
         (146)(h) a reciprocal;
         (146)(i) a syndicate; or
         (146)(j) another similar entity or combination of entities acting in concert. See Utah Code 31A-1-301
  • Policy: means :
         (13)(a) an individual or group life insurance policy;
         (13)(b) an individual or group annuity policy;
         (13)(c) a group life insurance certificate;
         (13)(d) a group annuity certificate; or
         (13)(e) a life insurance policy or an annuity policy, whether or not delivered or issued for delivery in Utah:
              (13)(e)(i) affecting the rights of a resident of Utah; or
              (13)(e)(ii) bearing a reasonable relation to Utah. See Utah Code 31A-36-102
  • Premium: includes , however designated:
              (156)(b)(i) an assessment;
              (156)(b)(ii) a membership fee;
              (156)(b)(iii) a required contribution; or
              (156)(b)(iv) monetary consideration. See Utah Code 31A-1-301
  • producer: means a person licensed or required to be licensed under the laws of this state to sell, solicit, or negotiate insurance. See Utah Code 31A-1-301
  • Related provider trust: means a trust established by a licensed life settlement provider or a financing entity solely to hold the ownership of or beneficial interests in purchased policies in connection with financing. See Utah Code 31A-36-102
  • Rescission: The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
  • Terminally ill: means having a condition that reasonably may be expected to result in death within 24 months. See Utah Code 31A-36-102
  • Trustee: A person or institution holding and administering property in trust.
  • Trustee: means "director" when referring to the board of directors of a corporation. See Utah Code 31A-1-301
  • Writing: includes :
         (48)(a) printing;
         (48)(b) handwriting; and
         (48)(c) information stored in an electronic or other medium if the information is retrievable in a perceivable format. See Utah Code 68-3-12.5
(2) A life settlement provider that enters a life settlement shall first obtain:

     (2)(a) if the owner is the insured, a written statement from a licensed attending physician that the owner is of sound mind and under no constraint or undue influence to enter a life settlement;
     (2)(b) a witnessed document in which the owner represents that:

          (2)(b)(i) the owner has a full and complete understanding of the life settlement and the benefits of the policy;
          (2)(b)(ii) the owner has entered the life settlement freely and voluntarily; and
          (2)(b)(iii) if applicable, the insured is terminally ill or chronically ill and that the illness was diagnosed after the policy was issued; and
     (2)(c) a document in which the insured consents to the release of the insured’s medical records to:

          (2)(c)(i) a life settlement provider;
          (2)(c)(ii) a life settlement producer; and
          (2)(c)(iii) the insurer that issued the policy covering the insured.
(3) Within 20 calendar days after an owner executes documents necessary to transfer rights under a policy, or enters into an agreement in any form, express or implied, to settle the policy, the life settlement provider shall give written notice to the issuer of the policy that the policy has or will become settled. The notice shall be accompanied by a copy of the documents required by Subsection (4).
(4) The life settlement provider shall deliver a copy of the following to the insurer that issued the policy that is the subject of the life settlement:

     (4)(a) the medical release required under Subsection (2)(c);
     (4)(b) a copy of the owner’s application for the life settlement; and
     (4)(c) the notice required under Subsection (3).
(5)

     (5)(a) An insurer shall complete and return a request for verification of coverage not later than 30 calendar days after the day on which the request is received. In its response, the insurer shall indicate whether the insurer intends to pursue an investigation regarding the validity of the insurance contract.
     (5)(b) An insurer may not require that a person making a request under Subsection (5)(a) provide the insurer additional information in order for the insurer to comply with Subsection (5)(a), if the person provides the insurer:

          (5)(b)(i) a request for verification of coverage made on an original, facsimile, or electronic copy of a verification of coverage for a policy document adopted by the commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
          (5)(b)(ii) an authorization that accompanies the verification described in Subsection (5)(b)(i) signed by the owner.
(6) Medical information solicited or obtained by a life settlement provider or life settlement producer is subject to:

     (6)(a) other laws of this state relating to the confidentiality of the information; and
     (6)(b) a rule relating to privacy of medical or personal information promulgated by the commissioner under Title V, Section 505 of the Gramm-Leach-Bliley Act of 1999, 15 U.S.C. § 6805.
(7)

     (7)(a)

          (7)(a)(i) A life settlement entered into in this state shall reserve to the owner an unconditional right to rescind the life settlement within the rescission period provided for in this Subsection (7).
          (7)(a)(ii) The rescission period ends 15 calendar days after the day on which the owner receives the proceeds of the life settlement.
          (7)(a)(iii) Rescission by an owner may be conditioned on the owner giving notice and repaying to the life settlement provider within the rescission period all proceeds of the life settlement and any premium, loan, or loan interest paid by or on behalf of the life settlement provider in connection with or as a consequence of the life settlement.
     (7)(b) If the insured dies during the rescission period, the life settlement is considered to be rescinded if the proceeds, premiums, loans, and loan interest paid by the life settlement provider or life settlement purchaser are repaid within 60 calendar days of the day on which the insured dies.
(8)

     (8)(a) Contact with an insured to determine the health status of the insured after a life settlement may be made only by a life settlement provider or life settlement producer that is licensed in this state, or its authorized representative, and no more than:

          (8)(a)(i) once every three months if the insured has a life expectancy of one year or more; or
          (8)(a)(ii) once every month if the insured has a life expectancy of less than one year.
     (8)(b) A life settlement provider or life settlement producer shall explain the procedure for the contacts allowed under this Subsection (8) to the owner when the application for the life settlement is signed by all participants in the life settlement.
     (8)(c) The limitations of this Subsection (8) do not apply to contacts for purposes other than determining health status.
     (8)(d) A life settlement provider or life settlement producer is responsible for the acts of its authorized representative in violation of this Subsection (8).
(9) The trustee of a related provider trust shall agree in writing with the life settlement provider that:

     (9)(a) the life settlement provider is responsible for ensuring compliance with all statutory and regulatory requirements; and
     (9)(b) the trustee will make all records and files related to life settlements available to the commissioner as if those records and files were maintained directly by the life settlement provider.
(10) Regardless of the method of compensation, a life settlement producer:

     (10)(a) represents only the owner; and
     (10)(b) owes a fiduciary duty to the owner to act according to the owner’s instructions and in the best interest of the owner.
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