§ 27-72-13 - Prohibited practices. [Effective July 1, 2010.].
SECTION 27-72-13
§ 27-72-13 Prohibited practices.[Effective July 1, 2010.]. – (a) It is unlawful for any person to:
(1) Enter into a life settlement contract if such personknows or reasonably should have known that the life insurance policy wasobtained by means of a false, deceptive or misleading application for suchpolicy;
(2) Engage in any transaction, practice or course of businessif such person knows or reasonably should have known that the intent was toavoid the notice requirements of this chapter;
(3) Engage in any fraudulent act or practice in connectionwith any transaction relating to any settlement involving an owner who is aresident of this state;
(4) Issue, solicit, market or otherwise promote the purchaseof an insurance policy for the purpose of or with an emphasis on settling thepolicy;
(5) Enter into a premium finance agreement with any person oragency, or any person affiliated with such person or agency, pursuant to whichsuch person shall receive any proceeds, fees or other consideration, directlyor indirectly, from the policy or owner of the policy or any other person withrespect to the premium finance agreement or any settlement contract or othertransaction related to such policy that are in addition to the amounts requiredto pay the principal, interest and service charges related to policy premiumspursuant to the premium finance agreement or subsequent sale of such agreement;provided, further, that any payments, charges, fees or other amounts inaddition to the amounts required to pay the principal, interest and servicecharges related to policy premiums paid under the premium finance agreementshall be remitted to the original owner of the policy or to his or her estateif he or she is not living at the time of the determination of the overpayment;
(6) With respect to any settlement contract or insurancepolicy and a broker, knowingly solicit an offer from, effectuate a lifesettlement contract with or make a sale to any provider, financing entity orrelated provider trust that is controlling, controlled by, or under commoncontrol with such broker unless such relationship has been disclosed to theowner;
(7) With respect to any life settlement contract or insurancepolicy and a provider, knowingly enter into a life settlement contract with anowner, if, in connection with such life settlement contract, anything of valuewill be paid to a broker that is controlling, controlled by, or under commoncontrol with such provider or the financing entity or related provider trustthat is involved in such settlement contract unless such relationship has beendisclosed to the owner;
(8) With respect to a provider, enter into a life settlementcontract unless the life settlement promotional, advertising and marketingmaterials, as may be prescribed by regulation, have been filed with thecommissioner. In no event shall any marketing materials expressly referencethat the insurance is "free" for any period of time. The inclusion of anyreference in the marketing materials that would cause an owner to reasonablybelieve that the insurance is free for any period of time shall be considered aviolation of this chapter; or
(9) With respect to any life insurance producer, insurancecompany, broker, or provider make any statement or representation to theapplicant or policyholder in connection with the sale or financing of a lifeinsurance policy to the effect that the insurance is free or without cost tothe policyholder for any period of time unless provided in the policy.
(b) A violation of this section shall be deemed a fraudulentlife settlement act.