[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.
_________
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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)
