Text: SF00353 Text: SF00355 Text: SF00300 - SF00399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. Section 502.102, subsection 13, Code 1999, is
1 2 amended by adding the following new paragraph:
1 3 NEW PARAGRAPH. c. With respect to a viatical settlement
1 4 contract, "issuer" means a person involved in creating,
1 5 transferring, or selling to an investor any interest in such a
1 6 contract, including but not limited to fractional or pooled
1 7 interests, but does not include an agent or a broker-dealer.
1 8 Sec. 2. Section 502.102, subsection 19, Code 1999, is
1 9 amended to read as follows:
1 10 19. "Security" means any note; stock; treasury stock;
1 11 bond; debenture; evidence of indebtedness; certificate of
1 12 interest or participation in a profit sharing agreement;
1 13 collateral trust certificate; preorganization certificate or
1 14 subscription; transferable share; investment contract;
1 15 viatical settlement contract, or any fractional or pooled
1 16 interest in such contract; voting trust certificate;
1 17 certificate of deposit for a security; fractional undivided
1 18 interest in an oil, gas, or other mineral lease or in payments
1 19 out of production under such a lease, right, or royalty; an
1 20 interest in a limited liability company or in a limited
1 21 liability partnership or any class or series of such interest,
1 22 including any fractional or other interest in such interest;
1 23 or, in general, any interest or instrument commonly known as a
1 24 "security", or any certificate of interest or participation
1 25 in, temporary or interim certificate for, receipt for,
1 26 guarantee of, or warrant or right to subscribe to or purchase,
1 27 any of the foregoing. "Security" does not include an
1 28 insurance or endowment policy or annuity contract under which
1 29 an insurance company promises to pay money either in a lump
1 30 sum or periodically for life or for some other specified
1 31 period. "Security" also does not include an interest in a
1 32 limited liability company or a limited liability partnership
1 33 if the person claiming that such an interest is not a security
1 34 proves that all of the members of the limited liability
1 35 company or limited liability partnership are actively engaged
2 1 in the management of the limited liability company or limited
2 2 liability partnership; provided that the evidence that members
2 3 vote or have the right to vote, or the right to information
2 4 concerning the business and affairs of the limited liability
2 5 company or limited liability partnership, or the right to
2 6 participate in management, shall not establish, without more,
2 7 that all members are actively engaged in the management of the
2 8 limited liability company or limited liability partnership.
2 9 Sec. 3. Section 502.102, Code 1999, is amended by adding
2 10 the following new subsection:
2 11 NEW SUBSECTION. 20A. "Viatical settlement contract" means
2 12 an agreement for the purchase, sale, assignment, transfer,
2 13 devise, or bequest of any portion of the death benefit or
2 14 ownership of a life insurance policy or contract, for
2 15 consideration which is less than the expected death benefit of
2 16 the life insurance policy or contract.
2 17 Sec. 4. Section 502.202, Code 1999, is amended by adding
2 18 the following new subsection:
2 19 NEW SUBSECTION. 19. A viatical settlement contract, or
2 20 fractional or pooled interest in such contract, provided any
2 21 of the following conditions are satisfied:
2 22 a. The assignment, transfer, sale, devise, or bequest of a
2 23 death benefit of a life insurance policy or contract, is made
2 24 by the viator to an insurance company as provided under Title
2 25 13, subtitle 1.
2 26 b. The assignment, transfer, sale, devise, or bequest of a
2 27 life insurance policy or contract, for any value less than the
2 28 expected death benefit, is made by the viator to a family
2 29 member or other person who enters into no more than one such
2 30 agreement in a calendar year.
2 31 c. A life insurance policy or contract is assigned to a
2 32 bank, savings bank, savings and loan association, credit
2 33 union, or other licensed lending institution as collateral for
2 34 a loan.
2 35 d. Accelerated benefits are exercised as provided in the
3 1 life insurance policy or contract and consistent with
3 2 applicable law.
3 3 EXPLANATION
3 4 This bill provides specific authority for the regulation of
3 5 viatical settlement contracts when they are sold as
3 6 investments.
3 7 Code section 502.102 is amended to provide a definition of
3 8 viatical settlement contract. The Code section is amended to
3 9 provide that, with respect to a viatical settlement contract,
3 10 "issuer" means a person involved in creating, transferring, or
3 11 selling to an investor any interest in such a contract,
3 12 including but not limited to fractional or pooled interests,
3 13 but does not include an agent or a broker-dealer. The Code
3 14 section is also amended to define a viatical settlement
3 15 contract as a security.
3 16 Code section 502.202 is amended to establish new exemptions
3 17 for certain sales of viatical settlement contracts, including
3 18 sales to licensed insurance companies, an isolated assignment
3 19 to a family member or other individual, an assignment to a
3 20 financial institution as collateral, or the acceleration of
3 21 benefits under the terms of the policy or contract.
3 22 LSB 2755XS 78
3 23 mj/sc/14
Text: SF00353 Text: SF00355 Text: SF00300 - SF00399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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