Nrs: Chapter 688C - Viatical Settlements

Link to law: https://www.leg.state.nv.us/NRS/NRS-688C.html
Published: 2015

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[Rev. 11/21/2013 1:12:01

PM--2013]



CHAPTER 688C - VIATICAL SETTLEMENTS

GENERAL PROVISIONS

NRS 688C.010        Definitions.



NRS 688C.020        “Advertising”

defined.

NRS 688C.030        “Broker

of viatical settlements” defined.

NRS 688C.040        “Business

of viatical settlements” defined.

NRS 688C.050        “Chronically

ill” defined.

NRS 688C.060        “Financing

agent” defined.

NRS 688C.070        “Policy”

defined.

NRS 688C.080        “Provider

of viatical settlements” defined.

NRS 688C.090        “Purchaser

of viatical settlements” defined.

NRS 688C.095        “Rescission

period” defined.

NRS 688C.100        “Special

organization” defined.

NRS 688C.110        “Terminally

ill” defined.

NRS 688C.130        “Viatical

settlement” defined.

NRS 688C.133        “Viatical

settlement investment” defined.

NRS 688C.135        “Viatical

settlement investment agent” and “investment agent of viatical settlements”

defined.

NRS 688C.137        “Viatical

settlement purchase agreement” defined.

NRS 688C.140        “Viaticated

policy” defined.

NRS 688C.150        “Viator”

defined.

NRS 688C.160        Governing

law when residents of different states are viators or purchasers of viatical

settlements with respect to single policy.

LICENSING; REGULATION

NRS 688C.170        Regulations

of Commissioner.

NRS 688C.175        Applicability

of other statutes.

NRS 688C.180        Examinations

and investigations by Commissioner.

NRS 688C.190        License

to operate as investment agent, provider or broker: General requirements;

application, renewal and expiration; effect.

NRS 688C.200        Investigation

of applicant and issuance of license; evidence of financial responsibility;

provision of new or revised information to Commissioner.

NRS 688C.210        Suspension,

revocation or refusal of license; application for hearing.

NRS 688C.212        Certain

financial planners must be licensed as insurance consultants.

NRS 688C.213        Probation

of broker or investment agent of viatical settlements for acting in bad faith.

NRS 688C.214        Action

against producer of life insurance for acting in bad faith.

NRS 688C.215        License

to operate as investment agent or broker not required for certain producers of

insurance.

NRS 688C.220        Filing

and approval of forms; submission of advertising material.

NRS 688C.230        Filing

of annual statement; confidentiality of information; disclosure of identity of

insured.

NRS 688C.240        Retention

of records and documents.

NRS 688C.242        Viatical

settlement investment agent: Representation of provider.

NRS 688C.244        Viatical

settlement investment agent: Identity of or communication with viator or

insured.

NRS 688C.250        Disclosures

to viator upon or before execution of application for settlement.

NRS 688C.260        Disclosures

to viator upon or before execution of settlement.

NRS 688C.262        Disclosure

to purchaser of viatical settlement; provision of other information.

NRS 688C.264        Additional

disclosure to purchaser of viatical settlement.

NRS 688C.266        Form

of certain disclosures.

NRS 688C.268        Disclosure

to issuer of policy.

NRS 688C.270        Prerequisites

to entry by viator into settlement within 5 years after issuance of policy;

submission of independent evidence or certification to insurer.

NRS 688C.275        Restrictions

on business of broker of viatical settlements and provider of viatical

settlements.

NRS 688C.280        Acquisition

of certain documents by provider or broker before entry into settlement; notice

to issuer of policy; requests for verification of coverage.

NRS 688C.285        Insurer;

request for verification of coverage or effecting transfer of policy; forms or

disclosures.

NRS 688C.290        Submission

by viator of certain documents to escrow agent; duties of escrow agent; payment

of viator.

NRS 688C.300        Rescission

of viatical settlement.

NRS 688C.310        Contact

with insured to determine address and telephone or status of health after

settlement.

NRS 688C.320        Confidentiality

of medical information.

NRS 688C.330        Notice

of transfer of ownership or change of beneficiary of viaticated policy by

provider; response by insurer to request for change of ownership or

beneficiary.

ADVERTISING

NRS 688C.350        Applicability

and interpretation of provisions.

NRS 688C.360        Establishment

and maintenance by licensee of system of control; responsibility for

advertisements.

NRS 688C.370        Advertisements:

Avoidance of deception; filing of materials with Commissioner; regulations.

NRS 688C.380        Text

of information required to be disclosed; use of misleading omissions, language

or illustrations; use of name or title of insurer or policy; prohibited

statements, implications and words.

NRS 688C.390        Use

of testimonial, endorsement, appraisal, analysis or statistical information.

NRS 688C.400        Prohibited

disparagement.

NRS 688C.410        Identification

of provider, viatical settlement and agreement to purchase viatical settlement;

statement of name of licensee.

NRS 688C.420        Use

of words, symbols or physical materials similar to those of governmental

program or agency; creation of impression of governmental recommendation or

endorsement; statements regarding licensing.

NRS 688C.430        Disclosures

required when emphasizing speed of viatication or monetary amounts available.

UNLAWFUL ACTS; FRAUD; ENFORCEMENT

NRS 688C.440        Unlawful

acts.

NRS 688C.450        Felonious

acts.

NRS 688C.460        Provision

to Commissioner of information regarding felonious acts.

NRS 688C.470        Immunity

of persons providing information regarding felonious acts; award of attorney’s

fees and costs.

NRS 688C.480        Confidentiality

and disclosure of certain documents and information regarding felonious acts.

NRS 688C.490        Establishment,

maintenance and modification by licensees of certain protective measures

against fraud; confidentiality of plan submitted to Commissioner.

NRS 688C.500        Statement

required on application or contract for settlement.

NRS 688C.510        Injunctive

and other relief; administrative fine; restitution; civil action; rescission.

_________

_________

GENERAL PROVISIONS

      NRS 688C.010  Definitions.  As

used in this chapter, unless the context otherwise requires, the words and

terms defined in NRS 688C.020 to 688C.150, inclusive, have the meanings ascribed to

them in those sections.

      (Added to NRS by 2001, 2166; A 2009, 1790)

      NRS 688C.020  “Advertising” defined.  “Advertising”

means a written, electronic or printed communication or a communication by

recorded telephone message, radio, television, the Internet or a similar medium

of communication, including a film strip, motion picture or videotape,

published, communicated or otherwise placed before the public to create an

interest in, or induce a person to purchase or sell a policy of life insurance

pursuant to, a viatical settlement.

      (Added to NRS by 2001, 2167; A 2009, 1790)

      NRS 688C.030  “Broker of viatical settlements” defined.  “Broker of viatical settlements” means a

person who on behalf of a viator and for a fee, commission or other valuable

consideration offers or attempts to negotiate a viatical settlement between the

viator and one or more providers or brokers of viatical settlements. The term

does not include an attorney at law, certified public accountant or financial

planner accredited by a nationally recognized accrediting agency who is

retained by the viator and whose compensation is not paid by a provider or

purchaser of viatical settlements.

      (Added to NRS by 2001, 2167; A 2009, 1791)

      NRS 688C.040  “Business of viatical settlements” defined.  “Business of viatical settlements” means the

offering, solicitation, negotiation, procurement, effectuation, purchasing,

financing, monitoring, tracking, underwriting, selling, transferring, pledging

or otherwise hypothecating of viatical settlements.

      (Added to NRS by 2001, 2167)

      NRS 688C.050  “Chronically ill” defined.  “Chronically

ill” means:

      1.  Being unable to perform at least two

activities of daily living, such as eating, moving from one place to another,

bathing, dressing, continence, defecation or urination;

      2.  Requiring substantial supervision for

protection from threats to health and safety because of cognitive impairment;

or

      3.  Having a level of disability similar to

that described in subsection 1 as determined by the Secretary of Health and

Human Services.

      (Added to NRS by 2001, 2167)

      NRS 688C.060  “Financing agent” defined.

      1.  “Financing agent” means an underwriter,

agent for placement, enhancer of credit, lender, purchaser of securities,

purchaser of a policy from a provider of viatical settlements or other person

that may enter into a viatical settlement and has direct ownership in a policy

that is the subject of the viatical settlement but:

      (a) Whose principal activity related to the

transaction is providing money to effect the viatical settlement; and

      (b) Who has an agreement in writing with one or

more licensed providers of viatical settlements to finance the acquisition of

one or more viatical settlements.

      2.  The term does not include a

nonaccredited investor or a purchaser of viatical settlements.

      (Added to NRS by 2001, 2167)

      NRS 688C.070  “Policy” defined.  “Policy”

means an individual or group policy, group certificate, contract or arrangement

of life insurance affecting the rights of a person, whether or not delivered or

issued for delivery in this state.

      (Added to NRS by 2001, 2167)

      NRS 688C.080  “Provider of viatical settlements” defined.  “Provider of viatical settlements” means a

person other than a viator who enters into or effectuates a viatical

settlement. The term does not include:

      1.  A bank, savings and loan association,

thrift company, credit union or other licensed lender that takes an assignment

of a policy as security for a loan;

      2.  The issuer of a policy that provides

accelerated benefits pursuant to the contract;

      3.  An authorized or eligible insurer that

provides stop-loss coverage to a provider or purchaser of viatical settlements;

      4.  A natural person who enters into no

more than one agreement in a calendar year for the transfer of policies for a

value less than the expected death benefit;

      5.  A financing agent;

      6.  A special organization; or

      7.  A purchaser of viatical settlements.

      (Added to NRS by 2001, 2167; A 2009, 1791)

      NRS 688C.090  “Purchaser of viatical settlements” defined.

      1.  “Purchaser of viatical settlements”

means:

      (a) A person who gives a sum of money as

consideration for a policy or an interest in the death benefits of a policy;

      (b) A person who owns or acquires or is entitled

to a beneficial interest in a trust that owns a viatical settlement contract as

described in subsection 2 of NRS 687B.040;

or

      (c) A person who is the beneficiary of a policy

that has been or will be the subject of a viatical settlement contract, for the

purpose of deriving an economic benefit.

      2.  The term does not include:

      (a) A person licensed pursuant to this chapter;

      (b) An accredited investor or qualified institutional

buyer as defined respectively in Regulation D, Rule 501 or Rule 144A of the

Federal Securities Act of 1933, as amended;

      (c) A financing agent; or

      (d) A special organization.

      (Added to NRS by 2001, 2168; A 2009, 1791)

      NRS 688C.095  “Rescission period” defined.  “Rescission

period” means the shorter period of 60 days after the date on which a viatical

settlement is signed by all parties thereto or 30 days after the viator

receives the proceeds from that viatical settlement.

      (Added to NRS by 2009, 1787)

      NRS 688C.100  “Special organization” defined.  “Special

organization” means an organization formed by a licensed provider of viatical

settlements solely to enable the provider to gain access to institutional

markets for capital.

      (Added to NRS by 2001, 2168)

      NRS 688C.110  “Terminally ill” defined.  “Terminally

ill” means having an illness that can reasonably be expected to result in death

within 24 months.

      (Added to NRS by 2001, 2168)

      NRS 688C.130  “Viatical settlement” defined.  “Viatical

settlement” means a written agreement between a viator and a provider of

viatical settlements or an affiliate thereof for the payment of money, or

anything else of value, which is less than the expected death benefit of a

policy, in exchange for the viator’s assignment, sale, transfer or devise of

the death benefit or ownership of any portion of the policy. The term includes

an agreement to transfer ownership or change the beneficiary, in the future,

regardless of the date of payment to the viator.

      (Added to NRS by 2001, 2168; A 2009, 1791)

      NRS 688C.133  “Viatical settlement investment” defined.  “Viatical settlement investment” has the

meaning ascribed to it in NRS 90.308.

      (Added to NRS by 2009, 1787)

      NRS 688C.135  “Viatical settlement investment agent” and “investment agent of

viatical settlements” defined.  “Viatical

settlement investment agent” or “investment agent of viatical settlements”

means a person who is appointed by or contracts with a licensed provider of

viatical settlements to solicit or arrange for the funding for the purchase of

a viatical settlement by a purchaser of viatical settlements on behalf of the

provider of viatical settlements.

      (Added to NRS by 2009, 1787)

      NRS 688C.137  “Viatical settlement purchase agreement” defined.  “Viatical settlement purchase agreement” means

a contract or agreement to which the viator is not a party, and which is

entered into by a purchaser of viatical settlements to purchase a life

insurance policy or an interest in a life insurance policy for the purpose of

deriving an economic benefit.

      (Added to NRS by 2009, 1787)

      NRS 688C.140  “Viaticated policy” defined.  “Viaticated

policy” means a policy that has been acquired by a provider of viatical

settlements pursuant to a viatical settlement.

      (Added to NRS by 2001, 2168)

      NRS 688C.150  “Viator” defined.

      1.  “Viator” means the owner of a policy or

the holder of a certificate of insurance under a policy of group insurance who

resides in this State and who enters or seeks to enter into a viatical

settlement. The term is not limited to an owner who is terminally or

chronically ill except where that limitation is expressly provided.

      2.  The term does not include:

      (a) A producer of life insurance acting as a

broker of viatical settlements pursuant to this chapter;

      (b) A qualified institutional buyer as defined in

Rule 144A of the federal Securities Act of 1933, 15 U.S.C. §§ 77a et seq., as

amended;

      (c) A financing agent; or

      (d) A special organization.

      (Added to NRS by 2001, 2168; A 2009, 1792)

      NRS 688C.160  Governing law when residents of different states are viators or

purchasers of viatical settlements with respect to single policy.  If there is more than one viator or purchaser

of viatical settlements with respect to a single policy and they are residents

of different states, one of whom resides in this State and enters or seeks to

enter into a viatical settlement or an agreement to purchase a viatical

settlement, the legal effect of the viatical settlement or agreement to

purchase a viatical settlement, as applicable, is governed by the law of the

state in which the viator or the purchaser having the largest fractional

ownership resides. If the viators or purchasers of viatical settlements own

equal fractions, they may agree in writing to choose which state, among the

states in which the viators or purchasers of viatical settlements reside, will

be the state whose law will govern.

      (Added to NRS by 2001, 2169; A 2009, 1792)

LICENSING; REGULATION

      NRS 688C.170  Regulations of Commissioner.  The

Commissioner may adopt regulations to:

      1.  Establish standards for evaluating the

reasonableness of payments under viatical settlements to persons chronically or

terminally ill, including the regulation of the rates of discount used to

determine the amount paid in exchange for an assignment, transfer, sale or

devise of a benefit under a policy.

      2.  Require a bond or otherwise ensure

financial accountability of providers and brokers of viatical settlements.

      3.  Govern the relationship of insurers

with providers and brokers of viatical settlements during the viatication of a

policy.

      4.  Establish standards and requirements

for licensing and registering producers of insurance acting as brokers of

viatical settlements.

      (Added to NRS by 2001, 2179; A 2005, 2135)

      NRS 688C.175  Applicability of other statutes.

      1.  Persons engaged in the business of

viatical settlements are subject to the provisions of this chapter and to the

following provisions, to the extent reasonably applicable:

      (a) NRS

679B.230 to 679B.300, inclusive,

concerning examinations of insurers.

      (b) NRS

679B.310 to 679B.370, inclusive,

concerning hearings regarding insurers and employees of insurers.

      (c) Chapter 680A

of NRS.

      (d) Chapter 683A

of NRS.

      (e) NRS

686A.010 to 686A.310, inclusive,

concerning trade practices and frauds.

      2.  Nothing in this chapter or elsewhere in

this title preempts or otherwise limits the provisions of chapter 90 of NRS, or of any rules, regulations

or orders issued by or through the Administrator of the Securities Division of

the Office of the Secretary of State or the Administrator’s designee acting

pursuant to the authority granted by chapter 90

of NRS.

      3.  Compliance with the provisions of this

chapter does not constitute compliance with any applicable provisions of chapter 90 of NRS or with any rule, regulation

or order adopted or issued thereunder.

      (Added to NRS by 2009, 1787)

      NRS 688C.180  Examinations and investigations by Commissioner.  The Commissioner may examine or investigate a

licensee under this chapter as often as the Commissioner considers appropriate.

An examination will be conducted in the manner provided in NRS 679B.230 to 679B.300, inclusive. The Commissioner

may also examine or investigate any other person or business insofar as the

Commissioner considers necessary or material to the examination or

investigation of the licensee. Instead of an examination or investigation under

this chapter of a foreign or alien person licensed under this chapter, the

Commissioner may accept a report on examination or investigation of the

licensee by the equivalent authority of the licensee’s state of domicile or

port of entry.

      (Added to NRS by 2001, 2170)

      NRS 688C.190  License to operate as investment agent, provider or broker:

General requirements; application, renewal and expiration; effect.

      1.  Except as otherwise provided in NRS 688C.215, a person shall not, without first

obtaining a license from the Commissioner, operate in or from this State as an

investment agent or a provider or broker of viatical settlements.

      2.  Application for a license must be made

to the Commissioner on a form prescribed by the Commissioner, accompanied by

all applicable fees. A license may be renewed from year to year on its

anniversary by payment of all applicable fees. The license expires if all

applicable fees are not paid by that date.

      3.  An applicant shall provide information

on forms required by the Commissioner, who may at any time require the

applicant to disclose the identity of all stockholders, partners, members,

officers and employees. The Commissioner may refuse to issue a license to an

organization if the Commissioner is not satisfied that a stockholder, partner,

member or officer who may materially influence the applicant’s conduct

satisfies the requirements of this chapter.

      4.  A license issued to an organization

authorizes all partners, members, officers and designated employees to act as

investment agents or providers or brokers of viatical settlements. Those

persons must be named in the application or a supplement to it.

      (Added to NRS by 2001, 2169; A 2005, 2135; 2009, 1792,

1793)

      NRS 688C.200  Investigation of applicant and issuance of license; evidence of

financial responsibility; provision of new or revised information to

Commissioner.

      1.  Upon the filing of an application and

payment of all applicable fees, the Commissioner shall investigate the

applicant, and issue a license if the Commissioner finds that the applicant:

      (a) If a provider of viatical settlements, has

set forth a detailed plan of operation;

      (b) Is competent and trustworthy and intends to

act in good faith in the capacity for which the license is sought;

      (c) Has a good reputation in business and, if a

natural person, has had experience, training or education which qualifies the

applicant in that capacity;

      (d) If an organization, provides a certificate of

good standing from the state of its domicile; and

      (e) If a provider or broker of viatical

settlements:

             (1) Has included a plan to prevent fraud

which satisfies the requirements of NRS 688C.490;

and

             (2) Has demonstrated evidence of financial

responsibility through either:

                   (I) A surety bond executed and

issued by an authorized surety in favor of the State of Nevada, continuous in

form and in an amount as determined by the Commissioner, of not less than

$250,000; or

                   (II) A deposit of cash, certificates

of deposit, securities or any combination thereof in the amount of $250,000.

      2.  The Commissioner shall not issue a

license to a nonresident unless a written designation of an agent for service

of process, or an irrevocable written consent to the commencement of an action

against the applicant by service of process upon the Commissioner, accompanies

the application.

      3.  A provider or broker of viatical

settlements shall furnish to the Commissioner new or revised information

concerning partners, members, officers, holders of more than 10 percent of its

stock, and designated employees within 30 days after a change occurs.

      4.  Notwithstanding any provision of this

section to the contrary, the Commissioner shall accept as evidence of financial

responsibility proof that financial instruments complying with the requirements

of this section have been filed with a state where the applicant is licensed as

a provider or broker of viatical settlements.

      5.  A surety bond issued for the purposes

of this section must specifically authorize recovery by the Commissioner on

behalf of any person in this State who sustained damages as a result of:

      (a) Erroneous acts;

      (b) Failure to act; or

      (c) Conviction of:

             (1) Fraud; or

             (2) Unfair practices,

Ê by the

provider or broker of viatical settlements.

      6.  The Commissioner may request evidence

of financial responsibility as described in subparagraph (2) of paragraph (e)

of subsection 1 at any time the Commissioner deems necessary.

      (Added to NRS by 2001, 2169; A 2009, 1793;

2011, 3375)

      NRS 688C.210  Suspension, revocation or refusal of license; application for

hearing.

      1.  After notice, and after a hearing if

requested, the Commissioner may suspend, revoke, refuse to issue or refuse to

renew a license under this chapter if the Commissioner finds that:

      (a) There was material misrepresentation in the

application for the license;

      (b) The licensee or an officer, partner, member

or significant managerial employee has been convicted of fraudulent or

dishonest practices, is subject to a final administrative action for

disqualification, or is otherwise shown to be untrustworthy or incompetent;

      (c) A provider of viatical settlements has

engaged in a pattern of unreasonable payments to viators;

      (d) The applicant or licensee has been found

guilty or guilty but mentally ill of, or pleaded guilty, guilty but mentally

ill or nolo contendere to, a felony or a misdemeanor involving fraud, forgery,

embezzlement, obtaining money under false pretenses, larceny, extortion,

conspiracy to defraud or any crime involving moral turpitude, whether or not a

judgment of conviction has been entered by the court;

      (e) A provider of viatical settlements has

entered into a viatical settlement in a form not approved pursuant to NRS 688C.220;

      (f) A provider of viatical settlements has failed

to honor obligations of a viatical settlement or an agreement to purchase a

viatical settlement;

      (g) The licensee no longer meets a requirement

for initial licensure;

      (h) A provider of viatical settlements has

assigned, transferred or pledged a viaticated policy to a person other than

another provider licensed under this chapter, a purchaser of the viatical

settlement or a special organization;

      (i) The applicant or licensee has provided

materially untrue information to an insurer that issued a policy that is the

subject of a viatical settlement;

      (j) The applicant or licensee has failed to pay a

tax as required pursuant to the provisions of chapter

363A of NRS;

      (k) The applicant or licensee has violated a

provision of this chapter or other applicable provisions; or

      (l) The applicant or licensee has acted in bad

faith with regard to a viator.

      2.  A suspension imposed for grounds set

forth in paragraph (k) or (l) of subsection 1 must not exceed a period of 12

months.

      3.  If the Commissioner takes action as

described in subsection 1, the applicant or licensee may apply in writing for a

hearing before the Commissioner to determine the reasonableness of the action

taken by the Commissioner, pursuant to the provisions of NRS 679B.310 to 679B.370, inclusive.

      (Added to NRS by 2001, 2169; A 2005, 1785; 2007, 1481; 2009, 1794)

      NRS 688C.212  Certain financial planners must be licensed as insurance

consultants.  A financial planner,

as defined in subsection 3 of NRS

628A.010, who, on behalf of a viator and for a fee, commission or other

valuable consideration not paid by a provider or purchaser of viatical

settlements, offers or attempts to negotiate a viatical settlement between the

viator and one or more providers or brokers of viatical settlements must be licensed

as an insurance consultant pursuant to NRS

683C.020.

      (Added to NRS by 2009, 1787)

      NRS 688C.213  Probation of broker or investment agent of viatical settlements

for acting in bad faith.  The

Commissioner may place a broker or investment agent of viatical settlements on

probation if the Commissioner finds that the broker or investment agent of

viatical settlements has acted in bad faith with regard to a viator.

      (Added to NRS by 2009, 1790)

      NRS 688C.214  Action against producer of life insurance for acting in bad

faith.

      1.  If the Commissioner finds that a

producer of life insurance has violated a provision of this chapter or other

applicable provisions or has acted in bad faith with regard to a viator, the

Commissioner may:

      (a) Refuse to:

             (1) Issue a license to the producer of

life insurance; or

             (2) Renew a license of the producer of

life insurance;

      (b) Suspend the producer of life insurance for a

period not to exceed 12 months; or

      (c) Place the producer of life insurance on

probation.

      2.  If the Commissioner takes action as

described in paragraph (a), (b) or (c) of subsection 1, the producer of life

insurance may apply in writing for a hearing before the Commissioner to

determine the reasonableness of the action taken by the Commissioner, pursuant

to the provisions of NRS 679B.310 to 679B.370, inclusive.

      (Added to NRS by 2009, 1790)

      NRS 688C.215  License to operate as investment agent or broker not required

for certain producers of insurance.

      1.  A natural person who has been licensed

for at least 1 year and who is in good standing as a resident or nonresident

producer of insurance with a life insurance qualification is not required to be

licensed as an investment agent or a broker of viatical settlements.

      2.  A licensed producer of insurance

specified in subsection 1 must register with the Division not more than 30 days

after first operating as an investment agent or a broker of viatical

settlements, on a form prescribed by the Commissioner, and pay the fee for

registration pursuant to NRS 680B.010.

Failure to register within the required period or late payment of or failure to

pay the fee may result in the imposition of an administrative fine of not more

than $500.

      3.  A producer of insurance who acts as an

investment agent or a broker of viatical settlements pursuant to subsection 1

shall comply with the provisions of NRS 688C.220

to 688C.250, inclusive, and 688C.310.

      (Added to NRS by 2005, 2135; A 2009, 1795)

      NRS 688C.220  Filing and approval of forms; submission of advertising

material.  A person shall not use a

form of viatical settlement or of disclosure in this state unless the form has

been filed with and approved by the Commissioner. The Commissioner shall

disapprove such a form if, in the opinion of the Commissioner, the settlement

or any of its terms is unreasonable, contrary to the interests of the public or

otherwise misleading or unfair to the viator. The Commissioner may require the

submission of advertising material before its use.

      (Added to NRS by 2001, 2170)

      NRS 688C.230  Filing of annual statement; confidentiality of information;

disclosure of identity of insured.

      1.  Each licensee under this chapter shall

file with the Commissioner on or before March 1 of each year an annual

statement containing such information as the Commissioner prescribes by

regulation. Pursuant to subsection 7 of NRS

679B.190, the Commissioner shall classify as confidential any information

received pursuant to this subsection that is:

      (a) Data of individual transactions in the

business of viatical settlements; or

      (b) Data that could compromise the privacy of

personal, financial or health information of a viator or insured.

      2.  Except as allowed or required by a

statute other than this chapter, a provider or broker of viatical settlements,

an investment agent, an insurer, a producer of insurance, an information

bureau, a rating agency or any other person knowing the identity of an insured

shall not disclose that identity as an insured to any other person unless the

disclosure is:

      (a) Necessary to effect a viatical settlement

between the viator and a provider of viatical settlements and the viator and

the insured have given prior written consent to the disclosure;

      (b) Necessary to effect an agreement for the

purchase of a viatical settlement between the purchaser and a provider of

viatical settlements, and the viator and the insured have given prior written

consent to the disclosure;

      (c) Furnished in response to an investigation or

examination by the Commissioner or another governmental officer or agency;

      (d) A term of or condition to the transfer of a

policy by one provider of viatical settlements to another provider; or

      (e) Necessary to permit a financing agent to

finance the purchase of a policy by a provider of viatical settlements and the

insured has given prior written consent to the disclosure.

      (Added to NRS by 2001, 2170; A 2009, 1795)

      NRS 688C.240  Retention of records and documents.

      1.  A person required to be licensed under

this chapter shall retain for 5 years copies of all:

      (a) Contracts, underwriting documents, forms of

policy and applications, from the date of the proposal, offer or execution,

whichever is latest;

      (b) Checks, drafts and other evidence or

documentation relating to the payment, transfer or release of money, from the

date of the transaction; and

      (c) Records and documents related to the

requirements of this chapter.

      2.  This section does not relieve a person

of the obligation to produce a document described in subsection 1 to the

Commissioner after the expiration of the relevant period if the person has

retained the document.

      3.  Records required by this section to be

retained must be legible and complete. They may be retained in any form or by

any process that accurately reproduces or is a durable medium for the

reproduction of the record.

      (Added to NRS by 2001, 2171)

      NRS 688C.242  Viatical settlement investment agent: Representation of

provider.  A viatical settlement

investment agent is deemed to represent the provider of viatical settlements

who appointed or contracted with the viatical settlement investment agent.

      (Added to NRS by 2009, 1787)

      NRS 688C.244  Viatical settlement investment agent: Identity of or

communication with viator or insured.  A

viatical settlement investment agent shall not:

      1.  Have knowledge of the identity of; or

      2.  Communicate either directly or

indirectly with,

Ê a viator or

an insured whose policy of insurance is the object of a viatical settlement for

which the viatical settlement investment agent solicits or arranges for the

funding for the purchase.

      (Added to NRS by 2009, 1787)

      NRS 688C.250  Disclosures to viator upon or before execution of application

for settlement.

      1.  With each application for a viatical

settlement, a provider or broker of viatical settlements shall furnish to the

viator at least the following disclosures, in at least 12-point type, no later

than the time the application for the settlement is signed by all the parties,

in a separate document signed by the viator and the provider or broker:

      (a) A broker of viatical settlements represents

the viator exclusively, and not the insurer or the provider of viatical

settlements, and owes a fiduciary duty to the viator, including a duty to act

according to the instructions of the viator and in the best interest of the

viator.

      (b) The possible alternatives to viatical

settlement, including any accelerated death benefits or policy loans offered

under the viator’s life insurance policy.

      (c) Some or all of the proceeds of the viatical

settlement may be taxable under the federal income tax or a state franchise or

income tax, and assistance should be sought from a professional tax adviser.

      (d) Proceeds of the viatical settlement may be

subject to the claims of creditors.

      (e) Receipt of proceeds of a viatical settlement

may adversely affect the viator’s eligibility for Medicaid or other

governmental benefits, and advice should be sought from the appropriate

governmental agencies.

      (f) The viator has a right to rescind a viatical

settlement within the rescission period, as provided in NRS

688C.300, and if the insured dies during the rescission period, the

settlement is deemed rescinded and all proceeds must be repaid to the provider

within 60 days after the death of the insured. Rescission, if exercised by the

viator, is effective only if the viator:

             (1) Gives notice of the rescission to the

provider or broker of viatical settlements; and

             (2) Repays to the provider of viatical

settlements all proceeds and any premiums, loans and loan interest paid on

account of the viatical settlement or on behalf of the provider of viatical

settlements,

Ê within the

rescission period.

      (g) Money will be sent to the viator within 3

business days after the provider has received the insurer’s or group

administrator’s written acknowledgment that ownership of or interest in the

policy has been transferred and the beneficiary has been designated.

      (h) Entering into a viatical settlement may cause

other rights, including conversion and waiver of premium, that may exist under

the policy to be forfeited by the viator, and assistance should be sought from

a financial adviser.

      (i) A brochure is provided which describes the

process of viatical settlement, in the form prescribed by the National

Association of Insurance Commissioners unless the Commissioner prescribes a

different form.

      (j) The name and address of the person

responsible for monitoring the condition of the insured, the frequency of

monitoring, the means of determining date of death and the means and time by

which the date of death will be transmitted to the purchaser.

      2.  The document in which the disclosures

required by paragraphs (a) to (j), inclusive, of subsection 1 are made must

also contain the following:

 

All medical, financial and personal

information solicited or obtained by a provider or broker of viatical

settlements about an insured, including the insured’s identity and that of

members of the insured’s family, a spouse or other relationship, may be

disclosed as necessary to effect the viatical settlement between the viator and

the provider. If you are asked to provide this information, you will be asked

to consent to the disclosure. Failure to consent may affect your ability to

viaticate your policy. The information may be furnished to someone who buys the

policy or provides money for the purchase.

 

      (Added to NRS by 2001, 2171; A 2009, 1796)

      NRS 688C.260  Disclosures to viator upon or before execution of settlement.  A provider of viatical settlements shall

furnish to the viator, no later than the date the viatical settlement is signed

by all parties, at least the following disclosures, in at least 12-point type,

conspicuously displayed in the viatical settlement or in a separate document

signed by the viator and the provider or broker of viatical settlements:

      1.  The affiliation, if any, between the

provider of viatical settlements and the issuer of the policy to be viaticated.

      2.  The name, business address and

telephone number of the provider of viatical settlements.

      3.  The name, business address and

telephone number of the broker of viatical settlements.

      4.  The existence of any affiliations or

contractual agreements between the provider and purchaser of viatical

settlements and:

      (a) The identity of that purchaser of viatical

settlements; and

      (b) If any contractual agreements exist between

the provider and purchaser of viatical settlements, the identity of every party

to those agreements.

      5.  The existence of any affiliations or

contractual agreements between the broker of viatical settlements and any

person making an offer in connection with the proposed viatical settlement and:

      (a) The identity of the person making the offer

and who has an affiliation or agreement with the broker of viatical

settlements; and

      (b) If any contractual agreements exist between

the broker of viatical settlements and a person making an offer, the identity

of every party to those agreements.

      6.  If the policy to be viaticated was

issued as a joint policy, contains family riders or covers a life other than

that of the insured under it, any possible loss of coverage on the other lives

under the policy, and that the viator should consult the producer of the

insurance or the issuer of the policy for advice concerning the settlement.

      7.  The monetary amount of the current

death benefit payable to the provider under the policy and, if known, the

availability of any other guaranteed benefit, the monetary amount of any

benefit for accidental death or dismemberment, and the extent to which the

viator’s interest in those benefits will be transferred as a result of the

viatical settlement.

      8.  The name, business address and

telephone number of the escrow agent, and the right of the viator or owner to

inspect or receive copies of the relevant escrow or trust agreements or related

documents.

      9.  A complete and accurate description of

all offers, counteroffers, acceptances and rejections relating to the proposed

viatical settlement.

      10.  The amount and method of calculation

of compensation of the broker of viatical settlements, including, without

limitation, anything of value paid or given to the broker of viatical settlements

for the placement of the policy.

      11.  A statement indicating the source of

any compensation of the broker of viatical settlements from a proposed offer

for the viatical settlement, the total amount of the offer for the viatical

settlement and the compensation of the broker of viatical settlements expressed

as a percentage of the offer for the viatical settlement.

      (Added to NRS by 2001, 2172; A 2009, 1797)

      NRS 688C.262  Disclosure to purchaser of viatical settlement; provision of

other information.

      1.  Before the date on which an agreement

to purchase a viatical settlement is signed by all parties thereto, the

provider of viatical settlements or a viatical settlement investment agent who

contracted with or was appointed by the provider of viatical settlements shall

provide the purchaser of viatical settlements with the following disclosures:

      (a) A statement that the purchaser will receive

no return on the viatical settlement investment, including dividends and

interest, until the insured has died and a claim for a death benefit is made

pursuant to the viaticated policy.

      (b) A statement that the actual annual rate of

return on a viatical settlement is dependent upon an accurate projection of the

life expectancy of the insured and that a guaranteed annual rate of return is

not determinable.

      (c) A statement that a viaticated policy is not a

liquid asset.

      (d) A statement that the purchaser may lose all,

or a substantial portion, of the benefits of the viaticated policy if the

insurer who issued the policy goes out of business during the term of the

viatical settlement investment.

      (e) A statement that the purchaser is responsible

for the payment of premiums and other costs related to the viaticated policy,

including, without limitation, premiums and costs if the insured returns to

health, and that those payments may reduce the purchaser’s return on the

viatical settlement investment.

      (f) A statement as to whether the purchaser is

entitled to a refund of all or a part of the payment of the purchaser pursuant

to the viatical settlement investment if the viaticated policy is later

determined to be void.

      (g) A statement that a group insurance policy may

contain provisions:

             (1) Limiting or negating rights of

conversion if the policy is terminated and replaced by another policy; and

             (2) Requiring the payment of additional

premiums if the policy is converted. If the group insurance policy requires a

payment of additional premiums if the policy is converted, a disclosure

statement pursuant to this subparagraph must also identify the name of the

party responsible for the payment of the additional premiums.

      (h) The cost of the premium to be paid by the

purchaser.

      (i) The costs of any fees or other expenses to be

paid by the purchaser.

      (j) The name, business address and telephone

number of the designated independent escrow agent.

      (k) The relationship between the designated

independent escrow agent and the broker of viatical settlements.

      (l) The risks associated with contestability of

the policy, including, without limitation, the risk that the purchaser will

have no claim or a limited claim to death benefits if the insurer rescinds the

policy during the period of contestability.

      (m) A statement as to whether the purchaser will

be the owner of the policy in addition to being the beneficiary and, if the

purchaser is the beneficiary only and not also the owner, the additional risks

associated with that status, including, without limitation, the risk that the

beneficiary may be changed or the premium may not be paid.

      (n) A description of the experience and

qualifications of the person who projects the life expectancy of the insured,

the information on which the projection is based and the relationship, if any,

between the person who makes the projection and the provider of viatical

settlements.

      2.  The provider of viatical settlements or

the viatical settlement investment agent shall also provide to the purchaser of

viatical settlements a brochure that describes the process of investment in

viatical settlements. The form of the brochure created by the National

Association of Insurance Commissioners must be used unless an alternate is

developed by the Commissioner.

      (Added to NRS by 2009, 1788)

      NRS 688C.264  Additional disclosure to purchaser of viatical settlement.  Not later than the date of assignment,

transfer or sale of all or a portion of a viaticated policy, a provider of

viatical settlements or a viatical settlement investment agent who contracted

with or was appointed by the provider of viatical settlements shall provide a

purchaser of a viatical settlement with the following disclosures:

      1.  All certifications relating to the life

expectancy of the viator that were obtained by the provider of viatical

settlements in the process of determining the price that was paid to the

viator.

      2.  A statement as to whether premium

payments or money for the payment of other costs related to the policy has been

deposited in an escrow account.

      3.  If payments or money has been deposited

in an escrow account, a statement of the date that the escrow account will be

depleted and as to whether the purchaser of viatical settlements will be

responsible for payment of premiums thereafter and, if so, a statement of the

amount of the premiums.

      4.  A statement as to whether premiums or

other costs related to the policy have been waived.

      5.  If premiums or other costs have been

waived, a statement as to whether the purchaser will be responsible for payment

of the premiums if the insurer that issued the policy terminates the waiver

after the purchase, and a statement of the amount of the premiums.

      6.  The type of policy offered or sold, any

additional benefits included with the policy and the status of the policy.

      7.  If the policy is term insurance, a

statement of the additional risks associated with term insurance, including,

without limitation, the purchaser’s responsibility for additional premiums if

the viator renews the policy at the end of the term which is effective at the

time of the purchase.

      8.  The period of contestability, if any,

remaining under the policy.

      9.  A statement of rights held by the

insurer that could negatively affect or extinguish the rights of the purchaser

of viatical settlements and the conditions under which the rights can be

exercised.

      (Added to NRS by 2009, 1789)

      NRS 688C.266  Form of certain disclosures.  Disclosures

made pursuant to NRS 688C.262 and 688C.264 must be printed conspicuously in at least

12-point type in any contract or in a separate document signed by the purchaser

of viatical settlements and:

      1.  The provider of viatical settlements;

or

      2.  The viatical settlement investment

agent who contracted with or was appointed by the provider of viatical settlements.

      (Added to NRS by 2009, 1789)

      NRS 688C.268  Disclosure to issuer of policy.  If

a broker or provider of viatical settlements is a party to a plan, a

transaction or a series of transactions to originate, renew or continue a

policy of life insurance for the purpose of engaging in the business of

viatical settlements before or during the first 5 years after the issuance of

the policy, the broker or provider shall fully disclose the plan, transaction

or transactions to the issuer of the policy.

      (Added to NRS by 2009, 1789)

      NRS 688C.270  Prerequisites to entry by viator into settlement within 5 years

after issuance of policy; submission of independent evidence or certification

to insurer.

      1.  A viator may not enter into a viatical

settlement within 5 years after the issuance of the policy to which the

settlement relates unless one or more of the following conditions is or has

been satisfied:

      (a) The policy was issued upon the owner’s

exercise of a right of conversion arising out of a group policy if the total of

the time covered under the policy plus the time covered under the group policy

is at least 60 months. The time covered under the group policy must be

calculated without regard to a change in insurance carriers if the coverage has

been continuous.

      (b) The viator or owner submits to the provider

of viatical settlements independent evidence that within the 5-year period:

             (1) The owner or insured has been

diagnosed as terminally ill;

             (2) The owner or insured has been diagnosed

as chronically ill or has an illness or condition that is life-threatening or

requires a course of treatment for at least 2 years, long-term care or health

care at home, or any combination of these;

             (3) The spouse of the owner or insured has

died;

             (4) The owner or insured has divorced his

or her spouse;

             (5) The owner or insured has retired from

full-time employment;

             (6) The owner or insured has become

physically or mentally disabled and a physician determines that the disability

precludes the owner or insured from maintaining full-time employment;

             (7) A final judgment or order has been

entered or issued by a court of competent jurisdiction, on the application of a

creditor or owner of the insured, adjudging the owner or insured bankrupt or

insolvent, or approving a petition for reorganization of the owner or insured

or appointing a receiver, trustee or liquidator for all or a substantial part

of the assets of the owner or insured; or

             (8) The owner of the policy experiences a

significant decrease in income which is unexpected by the owner and impairs the

reasonable ability of the owner to pay the premium on the policy.

      2.  The independent evidence must be

submitted to the insurer when the provider of viatical settlements submits a

request to the insurer to effect transfer of the policy to the provider of

viatical settlements. The insurer shall respond timely to the request. This

section does not prohibit an insurer from exercising its right to contest a

policy on the ground of fraud.

      3.  If a provider of viatical settlements

submits to an insurer a copy of the owner’s or insured’s certification that one

of the events described in paragraph (b) of subsection 1 has occurred, the

certification conclusively establishes that the viatical settlement is valid,

and the insurer shall timely respond to the provider’s request to effect a

transfer of the policy.

      (Added to NRS by 2001, 2173; A 2009, 1798)

      NRS 688C.275  Restrictions on business of broker of viatical settlements and

provider of viatical settlements.  With

respect to a viatical settlement or a policy of insurance:

      1.  A broker of viatical settlements shall

not knowingly solicit an offer from, effectuate a viatical settlement with or

make a sale to any provider, purchaser or investment agent of viatical

settlements who:

      (a) Controls;

      (b) Is controlled by; or

      (c) Is under common control with,

Ê the broker

of viatical settlements.

      2.  A provider of viatical settlements

shall not knowingly enter into a viatical settlement with a viator if, in

connection with that viatical settlement, anything of value will be paid to a

broker of viatical settlements who controls, is controlled by or is under

common control with a provider, purchaser or investment agent of viatical

settlements who is involved in the viatical settlement.

      (Added to NRS by 2009, 1790)

      NRS 688C.280  Acquisition of certain documents by provider or broker before

entry into settlement; notice to issuer of policy; requests for verification of

coverage.

      1.  A provider of viatical settlements who

enters into a settlement shall first obtain:

      (a) If the viator is the insured, a written

statement from a licensed attending physician that the viator is of sound mind

and under no constraint or undue influence to enter into a settlement;

      (b) A witnessed document in which the viator:

             (1) Consents to the viatical settlement;

             (2) Represents that he or she has a full

and complete understanding of the settlement and of the benefits of the policy;

             (3) Acknowledges that he or she has

entered into the settlement freely and voluntarily; and

             (4) If applicable to determine a payment

to a person terminally or chronically ill, acknowledges that he or she is

terminally or chronically ill and that the illness was diagnosed after the

policy was issued; and

      (c) A document in which the insured consents to

the release of his or her medical records to a provider or broker of viatical

settlements and the insurer that issued the policy covering the insured.

      2.  Within 20 days after a viator executes

documents necessary to transfer rights under a policy, or enters into an

agreement in any form, express or implied, to viaticate the policy, the

provider of viatical settlements shall give written notice to the issuer of the

policy that the policy has or will become viaticated. The notice must be

accompanied by:

      (a) A copy of the release of medical records;

      (b) The application for the viatical settlement;

and

      (c) A request for verification of coverage.

      3.  Any of the acts described in

subsections 1 and 2, if performed by a broker of viatical settlements, will be

deemed to have been performed by the provider of viatical settlements for the

purposes of fulfilling the requirements of subsections 1 and 2.

      4.  Within 30 days after receiving a

request for verification of coverage from a provider or broker of viatical

settlements, an insurer shall respond by:

      (a) Verifying coverage; and

      (b) Indicating whether, on the basis of the

medical evidence and documents provided, the insurer intends to pursue an

investigation regarding the validity of the insurance or possible fraud.

      (Added to NRS by 2001, 2172; A 2009, 1799)

      NRS 688C.285  Insurer; request for verification of coverage or effecting

transfer of policy; forms or disclosures.  An

insurer shall not, as a condition of responding to a request for verification

of coverage or of effecting the transfer of a policy pursuant to a viatical

settlement, require that the viator, insured, provider or broker of viatical

settlements sign a form or disclosure that has not been expressly approved by

the Commissioner for use in connection with a viatical settlement in this

State.

      (Added to NRS by 2009, 1790)

      NRS 688C.290  Submission by viator of certain documents to escrow agent;

duties of escrow agent; payment of viator.

      1.  A provider of viatical settlements

shall instruct the viator to send the executed documents required to effect the

change in ownership or assignment or change of beneficiary of the affected

policy to a designated independent escrow agent. Within 3 business days after

the date the escrow agent receives the documents, or within 3 business days

after the provider receives the documents if by mistake they are sent directly

to the provider, the escrow agent shall deposit the proceeds of the settlement

into an escrow or trust account maintained in a regulated financial institution

whose deposits are insured by the Federal Deposit Insurance Corporation.

      2.  Upon deposit of the proceeds in that

account, the escrow agent shall deliver to the provider the original documents

executed by the viator. Upon the provider’s receipt from the insurer of an

acknowledgment of the change in ownership or assignment or change of

beneficiary of the affected policy, the provider shall instruct the escrow

agent to pay the proceeds of the settlement to the viator.

      3.  Payment to the viator must be made

within 3 business days after the date the provider received the acknowledgment

from the insurer. Failure to make the payment within that time makes the

viatical settlement voidable by the viator for lack of consideration until

payment is tendered to and accepted by the viator. Payment to the viator shall

be deemed to have been made as of the date that the escrow agent:

      (a) Releases money for a wire transfer to the

viator; or

      (b) Deposits a check for the amount of the

proceeds with the United States Postal Service or with a commercially

reasonable delivery service.

      (Added to NRS by 2001, 2173; A 2009, 1800)

      NRS 688C.300  Rescission of viatical settlement.

      1.  A viatical settlement entered into in

this state must reserve to the viator an unconditional right to rescind the

settlement within the rescission period. Rescission, if exercised by the

viator, is effective only if the viator:

      (a) Gives notice of the rescission to the

provider or broker of viatical settlements; and

      (b) Repays to the provider of viatical

settlements all proceeds and any premiums, loans and loan interest paid on

account of the viatical settlement or on behalf of the provider of viatical

settlements,

Ê within the

rescission period.

      2.  If the insured dies during the

rescission period, the settlement is deemed rescinded and all proceeds and any

premiums, loans and loan interest paid on account of the viatical settlement or

on behalf of the provider of viatical settlements must be repaid to the

provider of viatical settlements within 60 days after the death of the insured.

      3.  In the event of a rescission, if the

provider of viatical settlements has paid commissions or other compensation to

a broker of viatical settlements in connection with the rescinded transaction,

the broker of viatical settlements shall refund all such commissions and

compensation to the provider of viatical settlements within 5 business days

following receipt of written demand from the provider of viatical settlements.

The demand must be accompanied by:

      (a) The viator’s notice of rescission, if the

rescission was exercised by the viator; or

      (b) Notice of the death of the insured, if the rescission

was due to the death of the insured within the rescission period.

      4.  A purchaser of viatical settlements has

the right to rescind an agreement to purchase a viatical settlement within 3

business days after the purchaser of viatical settlements receives the

disclosures set forth in NRS 688C.262 and 688C.264.

      (Added to NRS by 2001, 2173; A 2009, 1800)

      NRS 688C.310  Contact with insured to determine address and telephone or

status of health after settlement.

      1.  Contact with an insured to determine

the residential or business street address and telephone number of the insured

or the status of the health of the insured after a viatical settlement may be

made only by a provider or broker of viatical settlements who is licensed in

this state, or its authorized representative, and no oftener than once every 3

months if the insured has a life expectancy of 1 year or more, or once every

month if the insured has a life expectancy of less than 1 year. The provider or

broker shall explain the procedure for those contacts at the time the

settlement is entered into.

      2.  The limitations of subsection 1 do not

apply to contacts for purposes other than determining status of health.

      3.  A provider or broker is responsible for

the acts of the authorized representative of the provider or broker.

      (Added to NRS by 2001, 2173; A 2009, 1801)

      NRS 688C.320  Confidentiality of medical information.  All

medical information solicited or obtained by a licensee under this chapter is

subject to other laws of this State relating to the confidentiality of the

information.

      (Added to NRS by 2001, 2173)

      NRS 688C.330  Notice of transfer of ownership or change of beneficiary of

viaticated policy by provider; response by insurer to request for change of

ownership or beneficiary.

      1.  If a provider of viatical settlements

transfers ownership or changes the beneficiary of a viaticated policy, the

provider shall inform the insured of the transfer or change within 20 days

after it occurs.

      2.  If an insurer receives a request for

change of ownership or beneficiary of a viaticated policy from a provider of

viatical settlements, the insurer shall respond within 30 days after receipt

thereof with written confirmation that the change has been effected or

specifying the reasons why the requested change could not be effected.

      3.  An insurer shall not unreasonably delay

in effecting a requested change of ownership or beneficiary requested for a

viaticated policy by a provider of viatical settlements.

      4.  An insurer shall not seek to interfere

with a viatical settlement lawfully entered into in this State.

      (Added to NRS by 2001, 2172; A 2009, 1801)

ADVERTISING

      NRS 688C.350  Applicability and interpretation of provisions.  NRS 688C.350 to 688C.430, inclusive, apply to advertising of viatical

settlements, agreements to purchase viatical settlements or related products or

services intended for dissemination in this state, including advertising on the

Internet which is viewed by persons in this state. To the extent that federal

regulation establishes requirements for disclosure, those sections must be so

interpreted as to eliminate or minimize conflict with the federal requirements.

      (Added to NRS by 2001, 2174; A 2009, 1802)

      NRS 688C.360  Establishment and maintenance by licensee of system of control;

responsibility for advertisements.  Each

licensee under this chapter shall establish and continuously maintain a system

of control over the content, form and method of dissemination of all

advertisements of its contracts and services. Each advertisement is the

responsibility of the licensee as well as the person who creates or presents

it. A system of control must include notification to persons authorized by the

licensee who disseminate advertisements, at least annually, of the requirements

and procedures for approval before use of any advertisements not furnished by

the licensee.

      (Added to NRS by 2001, 2174)

      NRS 688C.370  Advertisements: Avoidance of deception; filing of materials with

Commissioner; regulations.

      1.  An advertisement must be truthful and

not misleading in fact or by implication. The form and content of an

advertisement for viatical settlements, agreements to purchase viatical

settlements or related products or services must be sufficiently complete and

clear to avoid deception. An advertisement may not have a capacity or tendency

to mislead or deceive, as determined by the Commissioner from the overall

impression it may reasonably be expected to create upon a person of average

education or intelligence in the segment of the public to which it is directed.

      2.  A provider of viatical settlements

shall not enter into a viatical settlement unless the promotional, advertising

and marketing materials, in at least 12-point type, have been filed with the

Commissioner pursuant to regulations adopted by the Commissioner. The

Commissioner shall adopt such regulations as the Commissioner deems necessary

to carry out the provisions of this subsection.

      (Added to NRS by 2001, 2175; A 2009, 1802)

      NRS 688C.380  Text of information required to be disclosed; use of misleading

omissions, language or illustrations; use of name or title of insurer or

policy; prohibited statements, implications and words.

      1.  The information required to be

disclosed under NRS 688C.350 to 688C.430, inclusive, may not be minimized, obscured,

presented ambiguously or so intermingled with other text of an advertisement as

to be confusing or misleading.

      2.  An advertisement may not omit material

information or use language or illustrations if the omission or use has a

capacity or tendency to, or does, mislead viators, purchasers of viatical

settlements or prospective purchasers of viatical settlements as to the nature

or extent of any benefit, loss covered, premium payable or effect on federal or

state taxes. Making a viatical settlement or an agreement to purchase a

viatical settlement available for inspection before it is consummated, or

offering to refund payment if the viator is not satisfied within the period

prescribed in subsection 4 of NRS 688C.300, does

not remedy misleading statements.

      3.  An advertisement may not use the name

or title of an insurer or policy unless the advertisement has been approved by

the insurer.

      4.  An advertisement may not represent that

premiums on a viaticated policy need not be paid in order to maintain that

policy, unless that is the fact.

      5.  An advertisement may not state or imply

that interest charged on an accelerated death benefit or loan on a policy is

unfair or in any way improper.

      6.  The words “free,” “no additional cost”

or words of similar import may not be used:

      (a) With respect to insurance, unless the terms

of the policy provide that the policy is provided without cost to the

policyholder.

      (b) With respect to any benefit or service other

than insurance unless true.

      7.  Certain advertisements relating to

viatical settlements are deemed to be false and misleading on their face and

are prohibited. Those advertisements include, without limitation, the following

words and phrases:

      (a) “Guaranteed,” “fully secured,” “100 percent

secured,” “fully insured,” “secure,” “safe,” “backed by rated insurance

companies,” “backed by federal law,” “backed by state law” or “state guaranty

funds”;

      (b) “No risk,” “minimal risk,” “low risk,” “no

speculation” or “no fluctuation”;

      (c) “Qualified or approved for individual

retirement accounts (IRAs), Roth IRAs, 401(k) plans, simplified employee

pensions (SEPs), 403(b) plans, Keogh plans, TSA, other retirement account

rollovers” or “tax deferred”;

      (d) Utilization of the word “guaranteed” to

describe a fixed return, annual return, principal, earnings, profits or

investment;

      (e) “No sales charges or fees”;

      (f) “High yield,” “superior return,” “excellent

return,” “high return” or “quick profit”; and

      (g) Favorable representations or testimonials

about the benefits of viatical settlement contracts and agreements to purchase

viatical settlements as an investment, out of context and purported to have

been taken from newspapers, trade papers, journals, radio and television

programs and all other forms of print and electronic media,

Ê or similar

representations.

      (Added to NRS by 2001, 2175; A 2009, 1802)

      NRS 688C.390  Use of testimonial, endorsement, appraisal, analysis or statistical

information.

      1.  A testimonial, endorsement, appraisal

or analysis used in an advertisement must be genuine, represent the present

opinion of the author, apply to the viatical settlement or agreement to

purchase a viatical settlement advertised, if any, and be reproduced with

sufficient completeness to avoid misleading viators or purchasers of viatical

settlements. In using a testimonial, endorsement, appraisal or analysis, a

licensee under this chapter makes the statements contained therein the licensee’s

own, and the statements must satisfy the requirements of NRS 688C.350 to 688C.430,

inclusive.

      2.  If the person making a testimonial,

endorsement, appraisal or analysis has a financial interest in the provider of

viatical settlements or a related organization, or receives a benefit other

than required wages, that fact must be prominently disclosed in the advertisement.

      3.  An advertisement may not state or imply

that a benefit or service related to a viatical settlement or an agreement to

purchase a viatical settlement has been approved or endorsed by a group,

society or other organization unless that is the fact and any relationship

between the organization and the provider of viatical settlements is disclosed.

If the organization is owned, controlled or managed by the provider, or

receives any payment or other consideration from the provider for making the

endorsement or testimonial, that fact must be disclosed in the advertisement.

      4.  An advertisement may not contain

statistical information unless it accurately reflects recent and relevant

facts. The source of all statistics used in an advertisement must be identified.

      5.  If an endorsement refers to benefits

received under a viatical settlement or an agreement to purchase a viatical

settlement, all information pertinent to that endorsement must be retained for

a period of 5 years after the use of the endorsement.

      (Added to NRS by 2001, 2175; A 2009, 1803)

      NRS 688C.400  Prohibited disparagement.  An

advertisement may not disparage insurers, providers of insurance, other

providers or brokers of viatical settlements, policies, services or methods of

marketing.

      (Added to NRS by 2001, 2175)

      NRS 688C.410  Identification of provider, viatical settlement and agreement to

purchase viatical settlement; statement of name of licensee.

      1.  The name of the provider of viatical

settlements must be clearly identified in an advertisement about the provider,

the provider’s viatical settlements or the provider’s agreements to purchase

viatical settlements. If a viatical settlement or an agreement to purchase a

viatical settlement is advertised, it must be identified by number or other

appropriate description. If an application is part of an advertisement, the

name of the provider must be shown on the application.

      2.  An advertisement may not use a trade

name, designation of a group, name of a parent or particular division of a

provider of viatical settlements, service mark, slogan or other device or

reference without disclosing the identity of the provider of viatical

settlements licensed under this chapter if the advertisement would have the

capacity or tendency to mislead as to the true identity of the provider or

create the impression that an organization other than the licensee would have a

responsibility for the financial obligation under a viatical settlement. The

name of the licensee must be stated in all advertisements.

      (Added to NRS by 2001, 2176; A 2009, 1804)

      NRS 688C.420  Use of words, symbols or physical materials similar to those of

governmental program or agency; creation of impression of governmental

recommendation or endorsement; statements regarding licensing.

      1.  An advertisement may not use a

combination of words, symbols or physical materials that by their content,

phraseology, shape, color or other characteristic are so similar to a

combination of words, symbols or physical materials used by a governmental

program or agency, or otherwise appear to be of such a nature, that they tend

to mislead viators or purchasers of viatical settlements into believing that

the solicitation is connected with a governmental program or agency. An

advertisement may not create the impression that a provider of viatical

settlements, the provider’s financial condition or business practices, the

payment of the provider’s claims or the merit, desirability or advisability of

the provider’s viatical settlements or agreements to purchase viatical

settlements is recommended or endorsed by a governmental authority.

      2.  An advertisement may state that a

provider of viatical settlements is licensed in the state in which the

advertisement appears, if it does not imply that competing providers are not so

licensed. The advertisement may suggest consulting the licensee’s website or

communicating with the Commissioner to ascertain whether the state requires

licensing and, if so, whether a particular provider or broker of viatical

settlements is licensed.

      (Added to NRS by 2001, 2176; A 2009, 1804)

      NRS 688C.430  Disclosures required when emphasizing speed of viatication or

monetary amounts available.

      1.  If an advertiser emphasizes the speed

with which viatication will occur, the advertisement must disclose the average

time from completed application to date of offer and from acceptance of offer

to receipt of funds by the viator.

      2.  If an advertiser emphasizes the

monetary amounts available to viators, the advertisement must disclose the

average purchase price as a fraction of face value obtained by viators who contracted

with the advertiser during the preceding 6 months.

      (Added to NRS by 2001, 2176)

UNLAWFUL ACTS; FRAUD; ENFORCEMENT

      NRS 688C.440  Unlawful acts.  It

is unlawful knowingly or intentionally:

      1.  For any person to interfere with the

enforcement of the provisions of this chapter or an investigation of a possible

violation of those provisions.

      2.  For a person engaged in the business of

viatical settlements to permit any person convicted of a felony involving

dishonesty or breach of trust to participate in that business.

      (Added to NRS by 2001, 2177)

      NRS 688C.450  Felonious acts.  It

is a category D felony, and the offender shall be punished as provided in NRS 193.130, for any person, knowingly or

with intent to defraud, to do any of the following acts in order to deprive

another of property or for the person’s own pecuniary gain:

      1.  Present, cause to be presented or

prepare with knowledge or belief that it will be presented, false information

to or by an investment agent or a provider or broker of viatical settlements, a

financing agent, an insurer, a provider of insurance or any other person, or to

conceal information, as part of, in support of or concerning a fact material

to:

      (a) An application for the issuance of a policy

or viatical settlement;

      (b) The underwriting of a policy or viatical

settlement;

      (c) A claim for payment or other benefit under a

policy, viatical settlement or agreement to purchase a viatical settlement;

      (d) A premium paid on a policy or as a result of

an agreement to purchase a viatical settlement;

      (e) A payment or change of beneficiary or

ownership pursuant to a policy or viatical settlement;

      (f) The reinstatement or conversion of a policy;

      (g) The solicitation, offer or effectuation of a

policy, viatical settlement or agreement to purchase a viatical settlement; or

      (h) The issuance of written evidence of a policy,

viatical settlement or agreement to purchase a viatical settlement.

      2.  In furtherance of a fraud or to prevent

detection of a fraud:

      (a) Remove, conceal, alter, destroy or sequester

from the Commissioner assets or records of a licensee under this chapter or

other person engaged in the business of viatical settlements;

      (b) Misrepresent or conceal the financial

condition of a licensee, a financing agent, an insurer or other person;

      (c) Transact the business of viatical settlements

in violation of this chapter; or

      (d) File with the Commissioner or analogous

officer of another jurisdiction a document containing false information or

otherwise conceal information about a material fact from the Commissioner or

other officer.

      3.  Present, cause to be presented or

prepare with knowledge or belief that it will be presented to or by a provider

or broker of viatical settlements, an investment agent, a financing agent, an

insurer, a provider of insurance or any other person, in connection with a

viatical settlement or transaction of insurance, a policy fraudulently by the

insured or owner or an agent of either.

      4.  Embezzle, steal, misappropriate or

convert money, premiums, credits or other property in an amount or having a

value of less than $650 of a provider of viatical settlements, a viator, an

insurer, an insured, an owner of a policy or other person engaged in the

business of viatical settlements or insurance.

      5.  Attempt to commit, assist, aid, abet or

conspire to commit an act or omission described in subsections 1 to 4,

inclusive.

      6.  Under no circumstances is a violation

of this section considered or intended to be a lesser included offense of a

violation of the provisions of NRS 90.570.

      (Added to NRS by 2001, 2176; A 2009, 1804;

2011, 180)

      NRS 688C.460  Provision to Commissioner of information regarding felonious

acts.

      1.  A person engaged in the business of

viatical settlements who knows or reasonably believes that a violation of NRS 688C.450 is being, has been or will be committed

shall promptly report the facts and circumstances pertaining to the violation

to the Commissioner.

      2.  Any other person who knows or

reasonably believes that a violation of NRS 688C.450

is being, has been or will be committed may furnish to the Commissioner the

information required by the Commissioner.

      (Added to NRS by 2001, 2177)

      NRS 688C.470  Immunity of persons providing information regarding felonious

acts; award of attorney’s fees and costs.

      1.  Except as otherwise provided in

subsection 2, a person furnishing information of the kind described in NRS 688C.460 is immune from liability and civil

action if the information is furnished to or received from:

      (a) The Commissioner or the employees, agents or

representatives of the Commissioner;

      (b) Another federal, state or local law

enforcement or regulatory officer or his or her employees, agents or

representatives;

      (c) Another person involved in the prevention or

detection of violations of NRS 688C.450 or similar

offenses or the employees, agents or representatives of the person;

      (d) The National Association of Insurance

Commissioners or other regulatory body overseeing life insurance or viatical

settlements, or its employees, agents or representatives; or

      (e) The insurer that issued the policy concerned

in the information.

      2.  The immunity provided in subsection 1

does not extend to a statement made with actual malice. In an action brought

against a person for filing a report or furnishing other information concerning

a violation of NRS 688C.450, the plaintiff must

plead specifically that the defendant acted with actual malice.

      3.  This section does not supplant or

modify any other privilege or immunity at common law or under another statute

enjoyed by a person described in subsection 1.

      4.  Except as otherwise provided in

subsection 5, a person furnishing information as described in subsection 1 is

entitled to an award of attorney’s fees and costs if:

      (a) The person is a defendant in a civil case

arising out of activities performed in carrying out the provisions of this

section;

      (b) The cause of action in the case is for libel,

slander or any other relevant tort;

      (c) The person is the prevailing party in the case;

and

      (d) The person bringing the action is not

substantially justified in doing so.

      5.  A person furnishing information

relating to the person’s own fraudulent acts as they relate to a viatical

settlement is not entitled to an award pursuant to subsection 4.

      (Added to NRS by 2001, 2178; A 2009, 1805)

      NRS 688C.480  Confidentiality and disclosure of certain documents and

information regarding felonious acts.

      1.  Except as otherwise provided in NRS 239.0115, a document or information

furnished pursuant to NRS 688C.470 or obtained by

the Commissioner in an investigation of an actual or suspected violation of NRS 688C.450 is confidential and privileged, is not a

public record and is not subject to discovery or subpoena in a civil action or

criminal prosecution.

      2.  Subsection 1 does not prohibit the

Commissioner from disclosing documents or evidence so furnished or obtained:

      (a) In an administrative or judicial proceeding

to enforce a statute administered by the Commissioner;

      (b) To another federal, state or local law

enforcement or regulatory officer, another person involved in the prevention or

detection of violations of NRS 688C.450, or

similar offenses, or the National Association of Insurance Commissioners; or

      (c) To a person engaged in the business of

viatical settlements who is aggrieved by the violation.

      3.  Disclosure of a document or evidence

under subsection 2 does not abrogate or modify the privilege covering it under

subsection 1.

      (Added to NRS by 2001, 2178; A 2007, 2158)

      NRS 688C.490  Establishment, maintenance and modification by licensees of

certain protective measures against fraud; confidentiality of plan submitted to

Commissioner.

      1.  Each licensee under this chapter shall

establish and maintain protective measures against fraud which are reasonably

calculated to prevent, detect and assist in the prosecution of violations of NRS 688C.450. The Commissioner may order, or a

licensee may request and the Commissioner may approve, modifications of the

measures otherwise required under this section, more or less restrictive than

those measures, as necessary to protect against fraud. Required measures are

employment of or contracting with investigators and submission of a plan to the

Commissioner which includes:

      (a) A description of the procedures for detecting

and investigating possible violations of NRS 688C.450

and for resolving inconsistencies between medical records and applications for

insurance;

      (b) A description of the procedures for reporting

possible violations to the Commissioner;

      (c) A description of the plan for educating and

training underwriters and other personnel against fraud; and

      (d) A description or chart of the organizational

arrangement of the personnel responsible for detecting and investigating

possible violations of NRS 688C.450 and for

resolving inconsistencies between medical records and applications for

insurance.

      2.  Except as otherwise provided in NRS 239.0115, a plan submitted to the

Commissioner pursuant to subsection 1 is privileged and confidential, not a

public record and not subject to discovery or subpoena in a civil action or

criminal prosecution.

      (Added to NRS by 2001, 2178; A 2007, 2158)

      NRS 688C.500  Statement required on application or contract for settlement.  An application or contract for a viatical

settlement, however transmitted, must contain a statement substantially as

follows: “A person who knowingly presents false information in an application

for a viatical settlement is guilty of insurance fraud and subject to fine and

imprisonment.” The lack of such a statement is not a defense in a prosecution

for violation of NRS 688C.450.

      (Added to NRS by 2001, 2177)

      NRS 688C.510  Injunctive and other relief; administrative fine; restitution;

civil action; rescission.

      1.  In addition to the penalties and other

means of enforcement provided under this chapter:

      (a) If a person violates a provision of this

chapter or of a regulation adopted under this chapter, the Commissioner may

seek an injunction and apply for temporary and permanent orders the

Commissioner determines to be necessary to restrain the violator.

      (b) A person who violates a provision of this

chapter is subject to an administrative fine of not more than $1,000 for each

violation.

      (c) In addition to a criminal penalty imposed,

the court shall order restitution to the person aggrieved by the violation.

      2.  A person aggrieved by a violation of

this chapter may bring a civil action against the violator to recover the

damages suffered.

      3.  A violation of this chapter attendant

to the signing of an agreement to purchase a viatical settlement renders the

agreement voidable and subject to rescission by the purchaser of viatical

settlements, upon tender of the viaticated policy by the purchaser of viatical

settlements to the provider of viatical settlements. Suit for rescission may be

brought:

      (a) In a court of competent jurisdiction;

      (b) In the jurisdiction where the alleged

violator resides;

      (c) In the jurisdiction where the alleged

violator has a principal place of business; or

      (d) In the jurisdiction where the alleged

violation occurred.

      (Added to NRS by 2001, 2179; A 2009, 1806)