An Act To Govern and Regulate Life Settlements
Maine Legislature, Session 121, LD 1907
Committee: Insurance and Financial Services
Sponsors: O'NEIL, MAYO
Amends: 24-A MRSA §6803, 24-A MRSA §6804, 24-A MRSA §6805, 24-A MRSA §6816

Legislative Document 
No. 1907 
H.P.1411 
House of Representatives, March 4,2004 
An Act To Govern and Regulate Life Settlements 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Ii/~ 
/J7.11!II£~ 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative O'NEIL of Saco. (GOVERNOR'S BILL) 
Cosponsored by Senator MAYO of Sagadahoc. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. I. 24·A MRSA §601, sub·§27 is enacted to read: 
27. 
Viatical or life settlement provider. 
Settlement 
provider license issuance fees and renewal fees may not exceed: 
A. 
Original license issuance fee 
$400; and 
B. 
Annual renewal fee 
Sec. 2. 24·A MRSA c. 85, as amended, is further amended by 
repealing the chapter headnote and enacting the following in its 
place: 
CHAPTER 85 
VIATICAL .AND LIFE SETTLEMENTS ACT 
Sec. 3. 24·A MRSA §6801, as enacted by PL 1997, c. 430, §1 
and affected by §2, is amended to read: 
§6801. 
Short title 
This chapter may be known and cited as the "Viatical and 
Life Settlements Act." 
Sec. 4. 24·A MRSA §6802, as enacted by PL 1997, c. 430, §1 
and affected by §2, is repealed. 
Sec. 5. 24·A MRSA §6802·A is enacted to read: 
§6802-A. 
Definitions 
As 
used in this 
chapter, 
unless 
the 
context 
otherwise 
indicates. the following terms have the following meanings. 
1. 
Ad~rtising. 
"Advertising" 
means 
any 
written, 
electronic or printed communication or any communication by means 
of 
recorded 
telephone 
messages 
or 
transmitted 
on 
radio. 
television. 
the Internet or 
a 
similar 
communications 
medium. 
including film strips. motion pictures and videos, published, 
disseminated, circulated or placed before the public, directly or 
indirectly, 
for 
the 
purpose 
of creating 
an 
interest in or 
inducing a person to sell a life insurance policy pursuant to a 
viatical or life settlement contract. 
2. 
Business of 
settlements. 
"Business 
of settlements" 
means any activity involved in, but not limited to, the offering, 
solicitation, 
negotiation, 
procurement. 
effectuation, 
purchasing, 
financing, 
monitoring, 
tracking, 
underwriting, 
selling, transferring, assigning, pledging, hypothecating or in 
any other manner engaging in the business of settlement contracts. 
3. 
Chronically ill. "Chronically ill" means: 
A. 
Being unable to perform at least 2 activities of daily 
living, including, but not limited to, eating, moving from 
one 
place 
to 
another, 
bathing, 
dressing, 
voiding 
the 
bladder, eliminating the bowel or maintaining continence; 
B. 
Requiring 
substantial 
superv~s~on 
to 
protect 
the 
individual from threats to health and safety due to severe 
cognitive impairment; or 
C. 
Having a level of disability similar to that described 
in paragraph A, as determined by the United States Secretary 
of Health and Human Services. 
4. 
Financing 
entity. 
"Financing 
entity" 
means 
an 
underwr iter, placement agent, 
lender, purchaser of securities, 
purchaser of a policy or certificate from a settlement provider, 
credit enhancer or any entity that has a direct ownership in a 
policy or 
certificate that is 
the 
subject of 
a 
settlement 
contract: 
A. 
Whose principal activity related to the transaction is 
providing funds to effect the settlement or purchase of one 
or more purchased policies or to provide credit enhancement: 
and 
B. 
Who 
has 
an 
agreement in writing with one or more 
licensed settlement providers to finance the acquisition of 
settlement contracts or to provide stop loss insurance. 
"Financing entity" does not include a nonaccredited investor. 
5. Financing transaction. 
"Financing transaction" means any 
transaction in which 
a 
licensed settlement provider 
obtains 
financing 
for 
the 
purchase, 
acquisition, 
transfer 
or 
other 
assignment 
of 
one 
or 
more 
settlement 
contracts 
or policies 
acquired pursuant to a settlement contract or interests therein, 
including, 
without 
limitation, 
any 
secured 
or 
unsecured 
financing, 
securitization transaction or 
securities offering, 
either registered or exempt from registration under federal and 
state securities law, 
or otherwise sells, assigns, transfers, 
pledges, 
hypothecates 
or 
otherwise 
disposes 
of 
a 
settlement 
contract or policy acquired pursuant to a settlement contract or 
interest therein. 
6. 
Fraudulent yiatical or life settlement act. 
"Fraudulent 
viatical or life settlement act" includes: 
At 
Acts or omissions committed by any person who, knowingly 
or with intent to defraud, 
for the purpose of depriving 
another of property or for 
pecuniary gain, 
commits, 
or 
permits its employees or its agents to engage in, 
acts 
including: 
(1) 
Presenting, causing to be presented or preparing 
with knowledge or belief that it will be presented to 
or 
by 
a 
settlement 
provider, 
settlement 
producer, 
financing entity, insurer, 
insurance producer or any 
other person false material information, or concealing 
material information, 
as part of, 
in support of or 
concerning 
a 
fact material to 
one 
or 
more 
of the 
following: 
(a) 
An 
application 
for 
the 
issuance 
of 
a 
settlement contract or insurance policy: 
(b) 
The underwriting of a settlement contract or 
insurance pOlicy: 
(c) 
A claim for payment or benefit pursuant to a 
settlement contract or insurance policy: 
(d) 
PremiumS paid on an insurance policy: 
(e) 
Payments 
and 
changes 
in 
ownership 
or 
beneficiary made in accordance with the terms of a 
settlement contract or insurance policy; 
(f) 
The 
reinstatement 
or 
conversion 
of 
an 
insurance policy: 
(g) 
The solicitation, offer, effectuation or sale 
of a settlement contract or insurance policy; 
(h) 
The 
issuance 
of 
written 
evidence 
of 
a 
settlement contract or insurance policy; or 
(i) 
A financing transaction: or 
(2) 
Employing 
any 
device, 
scheme 
or 
artifice 
to 
defraud related to policies acquired pursuant to 
a 
settlement contract: 
B. 
In the 
furtherance 
of 
a 
fraud or to prevent the 
detection 
of 
a 
fraud 
committing 
or 
permitting 
one I s 
employees or agents to: 
(1) 
Remove. conceal. alter. destroy or seguester from 
the superintendent the assets or records of a licensee 
or other person engaged in the business of settlements: 
(2) 
Misrepresent or conceal the financial condition of 
a licensee. financing entity. insurer or other person: 
(3) 
Transact the business of settlements in violation 
of laws reguiring a license. certificate of authority 
or other legal authority for the transaction of the 
business of settlements: or 
(4) 
File 
with 
the 
superintendent 
or 
the 
chief 
insurance regulatory official of another jurisdiction a 
document 
containing 
false 
information 
or 
otherwise 
concealing information about a material fact from the 
superintendent: 
C. 
Embezzlement. theft. misappropriation or conversion of 
money. 
funds. 
premiums. 
credits or other property of 
a 
settlement provider. 
insurer. 
insured. 
viator. 
insurance 
policyowner or any other person engaged in the business of 
settlements or insurance: 
D. 
Recklessly entering into. brokering or otherwise dealing 
in a settlement contract. the subject of which is a life 
insurance policy that was 
obtained by presenting false 
information concerning any fact material to the policy or by 
concealing. 
for 
the 
purpose 
of 
misleading 
another. 
information concerning any fact material to the policy. when 
the viator or the viator I s agent intended to defraud the 
policy I s 
issuer. 
For 
the 
purposes 
of 
this 
paragraph. 
"recklessly" means engaging in conduct in consciously and 
clearly unjustifiable disregard of a substantial likelihood 
of the existence of the relevant facts 
or risks. 
such 
disregard 
involving 
a 
gross 
deviation 
from 
acceptable 
standards of conduct: or 
E. 
Attempting to commit: assisting. aiding or abetting in 
the commission of; or conspiring to commit the acts or 
omissions specified in this subsection. 
7. 
Policy. 
"Policy" means an individual or group policy. 
group certificate. 
contract or arrangement of life insurance 
affecting the rights of a resident of this State or bearing a 
reasonable 
relation 
to 
this 
State. 
regardless 
of 
whether 
delivered or issued for delivery in this State. 
8. 
Related provider trust. 
"Related provider trust" means 
a 
titling trust or 
other 
trust established 
by 
a 
licensed 
settlement provider or a financing entity for the sole purpose of 
holding 
the 
ownership 
or 
beneficial 
interest 
in 
purchased 
policies in connection with a financing transaction. The trust 
must 
have 
a 
written agreement 
with the 
licensed settlement 
provider 
under 
which 
the 
licensed 
settlement 
provider 
is 
responsible 
for 
ensuring 
compliance 
with all 
statutory 
and 
regulatory requirements and under which the trust agrees to make 
all 
records 
and 
files 
related 
to 
settlement 
transactions 
available to the superintendent as if those records and files 
were maintained directly by the licensed settlement provider. 
9. 
Settle-nt contract. 
"Settlement contract" means: 
A. 
A written agreement establishing the terms under which 
compensation or 
anything of value will 
be 
paid. 
which 
compensation or value 
is 
less 
than 
the 
expected death 
benefit of the insurance policy or certificate. in return 
for 
the viator's 
assignment. 
transfer, 
sale, 
devise 
or 
bequest of the death benefit or ownership of any portion of 
the insurance policy or certificate of insurance: 
B. 
A contract for a loan or other financing transaction 
with a viator secured primarily by an individual or group 
life insurance policy other than a loan by a life insurance 
company pursuant to the terms of the life insurance contract 
or a loan secured by the cash value of a policy: or 
C. 
An 
agreement with a viator to transfer ownership or 
change 
the 
beneficiary 
designation 
at 
a 
later 
date 
regardless of the date that compensation is paid to the 
viator. 
For purposes of this chapter, the individual insured who is the 
subject of the insurance policy or certificate of insurance does 
not have to be diagnosed as terminally ill or chronically ill at 
the time a settlement contract is executed. 
10. Settleept producer. 
"Settlement producer" means 
any 
person who has life insurance producer authority, who acts or 
aids in any manner in the soliciting of a settlement on behalf of 
a 
viator 
and 
for 
a 
fee, 
commission 
or 
other 
valuable 
consideration 
offers 
or 
attempts 
to 
negotiate 
settlement 
contracts between a viator and one or more settlement providers. 
"Settlement producer" does not include an attorney, accountant, 
financing 
entity or 
person 
exercising 
a 
power 
of 
attorney 
granted by the viator retained to represent the viator and whose 
compensation is paid solely by the viator without regard to 
whether the settlement is effected. "Settlement producer" does 
not include a credit union or an employer or association that 
makes its employees or members aware of settlement contracts. 
Irrespective of the manner in which the settlement producer is 
compensated, a settlement producer is deemed to represent only 
the interests of the viator and owes a fiduciary duty to the 
viator. 
11. 
Settlement provider. 
"Settlement provider" 
means 
a 
person other than the viator that enters into or effectuates a 
settlement contract. 
"Settlement provider" does not include: 
A. 
A bank, 
savings bank, 
savings and loan association, 
credit union or other licensed lending institution that 
takes an assignment of a life insurance policy as collateral 
for a loan; 
B. 
The 
issuer 
of 
a 
life 
insurance 
policy 
providing 
accelerated benefits under section 2555 and pursuant to the 
contract; 
C. 
An 
authorized 
or 
eligible 
insurer 
that 
provides 
stop-loss 
coverage 
to 
a 
settlement provider, 
purchaser, 
financing entity, special purpose entity or related provider 
trust: 
D. 
A viator I s 
friend or family member or other natural 
person who enters into no more than one agreement in a 
calendar year for the assignment, transfer, sale, devise or 
bequest of a life insurance policy for any value less than 
the expected death benefit; 
E. 
A financing entity; 
F. 
A special purpose entity; 
G. 
A related provider trust; 
H. 
A settlement purcha§!er; or 
I. 
An accredited investor or qualified institutional buyer 
as defined respectively in Regulation D, Rule 501 and Rule 
144A of the Federal Securities Act of 1933, a§! amended, and 
who acquires a policy from a settlement provider. 
12. 
Special purpose entity. 
"Special purpose entity" means 
a corporation, partnership, trust, limited liability company or 
similar entity 
formed 
§!olely 
to 
provide either directly or 
indirectly 
access 
to 
institutional 
capital 
markets 
for 
a 
financing entity or licensed settlement provider. 
13. 
Termina11y ilL 
"Terminally ill" means 
having 
an 
illness or sickness that can reasonably be expected to result in 
death within 24 months or less. 
14. Viator. 
"Viator" means a person who assigns, transfers, 
sells, devises or bequeaths or seeks to assign, transfer, sell, 
devise or bequeath 
a 
death benefit or 
ownership of 
a 
life 
insurance policy or certificate under 
a 
settlement contract. 
"Viator" does not include: 
A. 
A settlement provider licensed under this chapter: 
B. 
An accredited investor or qualified institutional buyer 
as defined respectively in Regulation D, Rule 501 and Rule 
144A of the Federal Securities Act of 1933, as amended: 
C. 
A financing entity: 
D. 
A special purpose entity: or 
E. 
A related provider trust. 
Sec. 6. 24-A MRSA §6803, as amended by PL 1997, c. 592, §§76 
to 80, is further amended to read: 
§6803. 
Settlement provider and producer license; license 
requirements 
1. 
License required. 
Licenses are required in accordance 
with this subsection. 
A. 
A person may not act as a 
¥ia~ieal settlement provider 
without a license from the superintendent issued pursuant to 
this section and subject to the provisions of this chapter. 
B. 
A person may not perform the functions of, or otherwise 
act aSL 
a 
¥ia~ieal settlement producer without a license 
from 
the 
superintendent as 
a 
life 
aRe--heal~R insurance 
producer. 
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C 1. 
If there is more than one viator on a single policy 
and the viators are residents of different states, 
the 
settlement contract is governed by the law of the state in 
which the viator haying the largest percentage ownership 
resides or, if the viators hold egual ownership, the state 
of residence of one viator agreed upon in writing by all 
viators. 
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2. 
Application; fee. 
Application for a 
v~a~~ea~ settlement 
provider license must 
be 
made 
to 
the 
superintendent 
by the 
applicant 
on 
a 
form 
prescribed 
by 
the 
superintendent. 
The 
application must be accompanied by a fee 9~ not to exceed $400 in 
accordance with section 601. 
3. 
Renewal. 
A license for a 
v~a~~ea~ settlement provider 
is continuous se as long as the licensee remains qualified. 
The 
v~a~~ea~ settlement provider must pay an annual fee 
9~ not to 
exceed $400 in accordance with section 601. 
Failure to pay the 
fee within the terms prescribed may result in the revocation of 
the license unless cured within 5 days of written notice of 
failure to pay to the principal office of the licensee. 
4. 
Information required. 
The applicant for a settlement 
provider 
license 
shall 
provide 
such 
information 
as 
the 
superintendent requires and the information must be submitted on 
forms 
pFepaFea 
required 
by 
the 
superintendent. 
The 
superintendent may at any time require the applicant to disclose 
fully the identity of all stockholders except stockholders owning 
less than 5% of the shares of an applicant whose shares are 
publicly 
traded, 
partners, 
officers, 
directors, 
members 
and 
employees and the superintendent may, 
in the exercise of the 
superintendent's discretion, 
refuse to issue a 
license to an 
applicant 
if 
not 
satisfied 
that 
any 
stockholder, 
partnerL 
~irector, member or employee of the applicant who may materially 
influence the applicant's conduct meets the criteria set forth in 
subsection 
6. 
A 
settlement 
provider 
shall 
provide 
to 
the 
superintendent 
new 
or 
revised 
information 
about 
officers, 
stockholders 
controlling 
10% 
or 
more 
of 
stock, 
partners, 
directors, members or designated employees within 30 days of the 
change. 
5. 
Authority under license. 
A settlement provider license 
issued 
to 
any 
person 
authorizes 
all 
officers, 
partners.L 
directors, members and key management personnel of that person to 
act on behalf of the viat:ieal settlement provider, unless such 
activity requires 
a 
license under another provision of this 
Title. 
All 
officers, 
partners, 
directors, 
members 
and 
key 
management 
personnel 
of 
the 
person 
must 
be 
named 
in 
the 
application and any supplements to the application. 
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6. 
Investiqation. 
Upon the filing of an application 
the 
payment 
of 
the 
settlement 
provider 
license 
fee, 
superintendent shall make an investigation of the applicant 
shall issue 
a 
license if the superintendent finds 
that 
applicant: 
A. 
Has provided a detailed plan of operation; 
and 
the 
and 
the 
B. 
Is competent and trustworthy and intends to act in good 
faith 
in 
the 
capacity 
Fe~Q~Eee--~-~~--lieease of 
a 
settlement provider; 
c. 
Has a good business reputation and has had experience, 
training or education so as to be qualified ~a-~he-~£iRess 
t:e-whieh-t:he-lieease-Felat:es as a settlement provider; 
D. 
If organized under the laws of this State, has provided 
a certificate of good standing from this State. 
If the 
applicant is a foreign entity, it must provide a certificate 
of good standing 
from its state of organization and 
a 
certificate of good standing from this State; aae 
E. 
QF-aay Has no officer, partner, director, member or key 
management personnel of the applicant ~ 
has 
ae~--geea 
eeaviet:ee-~-a-~~~~~-wh4€h--~~-wa£-~-elemeat:T ~ 
found guilty of. or has pleaded guilty or nolo contendere 
to, any crime involving fraud or moral turpitude, regardless 
of whether a judgment of conviction has been entered by the 
court; and 
F. 
Has 
provided 
an 
antifraud 
plan 
that 
meets 
the 
requirements of section 6818. 
7. 
Financial 
responsibility. 
~b.e--...f-o-1-~--evideliee 
Evidence of financial responsibility must be provided to the 
superintendent Be~eFe-a-~~~~-&&-issQed in accordance with 
this subsection. 
A. 
A via~ieal settlement provider shall provide evidence of 
financial accountability. 
Such evidence may include, but is 
not limited to, a binding and committed lending facility of 
at least $1,000,000 with a term of at least one year or a 
net worth in excess of $100,000. 
8. 
Nonresidents. 
The 
superintendent 
may 
not 
issue 
a 
settlement provider license to a nonresident applicant unless a 
written designation of an agent for service of process is filed 
and maintained with the superintendent or the applicant has filed 
with 
the 
superintendent 
the 
applicant's 
written 
irrevocable 
consent that any action against the applicant may be commenced 
against the applicant by service of process on the superintendent. 
9. 
List. 
The superintendent shall maintain a complete list 
of all 
via~ieal settlement providers licensed or with license 
pending in this State. 
The list must be available upon request 
to the general public. 
Sec. 7. 24-A MRSA §6804, as amended by PL 1997, c. 562, Pt. 
D, §5, is further amended to read: 
§6804. 
License revocation and administrative assessments 
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A. 
Superintendent· s 
authority. 
The superintendent may 
deny, 
suspend, 
revoke 
or 
refuse 
to 
renew 
the 
license of 
a 
settlement provider if the superintendent finds just cause to do 
so, which may include, but is not limited to, a finding that: 
A. 
There 
was 
any 
material 
misrepresentation 
in 
the 
application for the license or other information submitted 
to the superintendent; 
B. 
The licensee or any officer, partner, director, member 
or 
key 
management 
personnel 
of 
the 
licensee 
has 
been 
convicted of fraudulent or dishonest practices, is subject 
to a 
final administrative action to suspend or revoke 
a 
settlement provider license or is otherwise shown to be 
untrustworthy or incompetent to act as a settlement provider; 
C. 
The licensee as a settlement provider demonstrates an 
unreasonable pattern of payments to viators; 
D. 
The licensee or any officer, partner, director, member 
or key management personnel of the licensee has been found 
guilty of, or has pleaded guilty or nolo contendere to, any 
crime 
involving fraud or moral 
turpitude, 
regardless of 
whether a 
judgment of conviction has been entered by the 
court; 
E. 
The settlement provider has entered into any settlement 
contract that has not been approved pursuant to this chapter; 
F. 
The settlement provider has failed to honor contractual 
obligations set out in a settlement contract; 
G. 
The settlement provider no longer meets the requirements 
for initial licensure; 
H. 
The settlement provider has assigned, transferred or 
pledged a policy acquired pursuant to a settlement contract 
to a person other than a settlement provider licensed in 
this 
State, 
an 
accredited 
investor 
or 
qualified 
institutional buyer as defined respectively in Regulation D, 
Rule 501 and Rule 144A of the Federal Securities Act of 
1933, 
as 
amended, 
a 
financing entity, 
a 
special purpose 
entity or a related provider trust: or 
I. 
The licensee has violated any of the provisions of this 
chapter or any rules adopted pursuant to this chapter. 
2. 
Hearing. 
Before the superintendent may deny a license 
application or suspend, revoke or refuse to renew the license of 
a viatieal settlement provider, the licensee or applicant has an 
opportunity for a hearing in accordance with Title 5, chapter 
375, subchapter ~v ~. 
3. 
Administrative penalty. 
The 
superintendent 
may, 
in 
addition to denying 
a 
license application 
or 
suspending or 
reVOking a license, assess an administrative civil forfeiture of 
$500 for each willful violation of this chapter. 
This section 
may not be construed to diminish the penalties available for any 
violation of chapter 23, in addition to any penalties authorized 
under section 12-A. 
Sec. 8. 24-A MRSA §6805, as enacted by PL 1997, c. 430, §1 
and affected by §2, is amended to read: 
§6805. 
Approval of settlements contracts; disclosure statements 
and applications 
A 
viatieal--~e~~lemeB~--~~~--~---~BG&~BG&&~--viatieal 
pFee~eeF person may not use any contract, disclosure statement or 
application form is with a viator who is a resident of this State 
wbes--dea-1-ing--witb--a--viat.eF 
unless it has been filed with and 
approved by the superintendent, pursuant to sections 2412 and 
2413. 
The superintendent shall disapprove a settlement contract 
form or disclosure statement form if, in the superintendent IS 
opinion, 
the 
contract 
or 
provisions 
contained 
therein 
are 
unreasonable, 
contrary 
to 
the 
interests 
of 
the 
public 
or 
otherwise misleading or unfair to the viator. 
All such forms 
must 
be 
approved or denied by 
the 
superintendent within 
calendar 
days 
following 
receipt 
of 
submission 
by 
the 
superintendent. 
Sec. 9. 24-A MRS A §6806, as amended by PL 1997, c. 592, §81, 
is further amended to read: 
§6806. 
Reporting requirements; confidentiality of infonmation 
1. 
Annual report. A settlement provider licensee shall file 
with the superintendent by March 1st of each year an annual 
statement 
containing 
such 
information 
as 
the 
superintendent 
Page l2-LR2724(1) 
prescribes by rule. 
The superintendent may not adopt any rule 
that requires the submission of information that permits the 
identification of a viator or relates to transactions when the 
viator is not a resident of this State. 
The superintendent may 
not 
request, 
collect 
or 
compile 
personal 
information 
that 
identifies any viator or insured except in connection with the 
investigation of a specific complaint and with the prior written 
permission of the viator or insured or the viator's or insured's 
estate or representative to collect that information. 
I-A. 
Fee for filing annual report. 
The fee for filing the 
annual report is the same 
as for an insurer as provided in 
section 
601. 
On 
or 
before 
July 
1st 
of 
each 
year, 
the 
superintendent shall forward to each viatieal settlement provider 
an itemized bill for the amount due for the filing of the annual 
statement and the amount due for the certificate of authority 
annual fee. 
2. 
Privacy protection. 
Except as otherwise required or 
permitted 
by 
law, 
a 
viatieal 
settlement 
provider, 
viatieal 
settlement producer, 
iReepeReeBt-~~~~~-~~rr-iRstit~ti9Ral 
iRvest9FT 
insurance 
company, 
insurance 
producer, 
independent 
insurance producer, 
information bureau, 
rating company or any 
other person with actual knowledge of the identity of a viator, 
or of the insured if other than the viator, may not disclose that 
identity, or the insured's financial or medical information, to 
any other person unless the viat9FT-9~-~~-~~~~-&tA&~-tBaR 
the-~~~~--p~¥iG9s-~~~~~~R&&R&-~9-~~-ei6e196QFe-~-the 
disclosure: 
A. 
Is 
maee-~~-a-~~~~~~--&&&&~R&-p~9¥iQe~7-~-viatieal 
pFge~eeFT-aB-i~-~~~~~~r~rr-aR-iBstit~ti9Ral 
iBvest9F-9F-~h~-~~~~~~~-~~-aRG-is-ReeessaFY 
t9-effeet-~he-¥i~~~~-~~~~-~~~~-¥ia~~-aRa-the 
viatieal--settlemeRt--pF9vieeF 
necessary 
to 
effectuate 
a 
settlement contract between the viator and 
a 
settlement 
provider and the viator and the insured have provided prior 
written consent to the disclosure; 
B. 
Is 
provided 
in 
response 
to 
an 
investigation 
or 
examination by the s upe r in tenden t 
.!.!o..!,.r_2a~n~y_.!.!o..!.t±hlSe~r~~gl.J.oLlvue;;.,r,,-,nm~~eMn~t 
officer or agency pursuant to section 6807; 9F 
c. Is necessary to ~aeilitate permit a financing tFaBsaeti9R 
aRe--i6--maee--~~~--~~-~--~~RseG--¥iati9al--settlemeRt 
pF9vieeF-~--~9-~R-~~~~~~~--iRvest9FT entity, related 
provider trust or special purpose entity to finance the 
purchase of pOlicies by a settlement provider and the viator 
and 
insured have provided prior written consent to 
the 
disclosure; 
D. 
Is a term or condition to the transfer of a policy by 
one settlement provider to another settlement provider: 
E. 
Is 
necessary 
to 
allow 
the 
settlement 
provider 
or 
insurance producer or an authorized representative to make 
contacts for the purpose of determining health status: or 
F. 
Is reguired to purchase stop-loss coverage. 
~y-gale-e~-~~aa6~e~Y--A-¥~~~~~-~~~~~~~~a~-Be~ 
sell-e£-~~~~-~-¥~a~iGa~-peliey-~e-~~-~~~&~~~~-e~Re~ 
~RaB-~£-~~~~~~~-~&¥&~~~-e~-~-~~~-¥~~iGa~-se~~leffieB~ 
p~eyiEle~..-
Sec. 10. 24-A MRSA §§6807 and 6808, as enacted by PL 1997, c. 
430, §1 and affected by §2, are amended to read: 
§6807. 
Examinations and investigations 
ly---GemplaiB~y---~~-~~-~e--a-~~~-~~~~~--a 
lieeBsee-e£-~~~~-w~~h-aB-~ppJJ€~~Jen-~~-~-~i&&&&&r-SRe 
Sype~iBseBEleBs--ffiay--eHaffiiBe--SRe--9ysiBeSs--aBEl--a~~ai~s--e~--aBY 
lieeBsee-~-~~~-~eF-~-~~r--SY9jee~-~~~~-p~eyisieBS 
e~--~~iG&-~r-~~-6ypeF4B~eBEleB~--may-~~~-~-~J€en6ee--eF 
applieaBs-~~-~~~-Fe€eFEl67-~r-~i~es-~-~~-iB~eFffia~ieB 
~easeBa9ly--~€6~~y--~~--aseeF~a~B--wRe~ReF--~~--~~--e~ 
applieaB~-J6-~~~~--aas-aeseEl-4B-¥~~~~~~-~~~-ehap~F-e~ 
Fy±es--aElep~eEl--~aGe~-~~~-~~~---~~-e~pen~e~--4BeYFFeEl--iB 
eeBElyesiB~--aB--eHaffiiBasieB--ffiYSS--ge--paiEl--9Y--~Re--lieeBsee--e~ 
applieaBs..-
I-A. 
Examinations. 
The 
superintendent 
may 
conduct 
examinations in accordance with this subsection. 
A. 
The superintendent may conduct an examination under this 
chapter of a licensee as often as the superintendent in the 
superintendent's sole discretion considers appropriate. 
B. 
For purposes of completing an examination of a licensee 
under this chapter, subject to the provisions of section 
6806, 
the 
superintendent may 
examine 
or 
investigate 
any 
person, 
or 
the business of 
any 
person, 
insofar 
as 
the 
examination or investigation is, in the sole discretion of 
the superintendent, considered necessary or material to the 
examination of the licensee. 
C. 
In lieu of an examination under this chapter of any 
foreign 
or 
alien 
licensee 
licensed 
in this State, 
the 
superintendent 
may, 
at 
the 
superintendent's 
discretion, 
accept an examination report on the licensee as prepared by 
the superintendent of insurance for the licensee's state of 
domicile or port-of-entry state. 
3T----Ge.fide.~ial---i.fe~a~ie.T----NaMes---aBe---~Be~y~eQa~ 
~eeB~~f~ea~~eB-~~~--a~~-v4a~e~6-~~~~~&~~-~Bf9~ffia~~9B 
aBe-ffiay-~e~-~~~~~~~~~~~&-~&~&&-Fe~QiFee-BY 
~awT 
3. 
Records. Records of all y~a~~ea~ settlement transactions 
must 
be maintained by the settlement provider licensee 
aBeT 
SQB~ee~-~~~~-pFeyisieBS-e~-~~~-~~~r-ffiQS~-~~~~~-~e 
~Re--6~~~£~eB~e£~--~~---~--yea~s--a~~e£--~~~-~&~~~&~--feF 
~Bspee~ieB-.ffiH'--inE}--Feas9BaBle--bus-in&&s--ReQFs in accordance with 
this subsection. 
A. 
A settlement provider reguired to be licensed by this 
chapter shall retain for 5 years copies of all: 
(1) 
Proposed, 
offered 
or 
executed 
settlement 
contracts, settlement purchase agreements, underwriting 
documents, policy forms and applications from the date 
of the proposal, offer or execution of the settlement 
contract or settlement purchase agreement, whichever is 
later; 
(2) 
Checks, drafts or other evidence and documentation 
related to the payment, transfer, deposit or release of 
funds from the date of the transaction; and 
(3) 
Other 
records 
and 
documents 
related 
to 
the 
reguirements of this chapter. 
B. 
This subsection does not relieve a settlement provider 
licensee of the obligation to produce these documents to the 
superintendent after the retention period has expired if the 
person has retained the documents. 
C. 
Subject to 
the provisions of section 6806, 
records 
reguired to be retained by this subsection must be legible 
and complete and may be retained in paper, photographic, 
microprocess, magnetic, mechanical or electronic media or by 
any process that accurately reproduces or forms a durable 
medium for the reproduction of a record. 
4. 
IlIIIIlunity. 
A--~~--r~-nq--~e--aB-~-de-r---&f--~Re 
SQpeF~B~eBeeB~-~SSQee-~~6~a~~-~~~~~~~~-~-~~a&-~Feffi-aBY 
e~y~1-a€~~e~-~~~-nq-~~~-eeffipliaBee-w4~a-~~~-de-r-~-i&-Be~ 
Fe~Q~Fee-~e-€aaJJe~~e-~ae-~~~~y-~-~I~~~~~-~~~FG&F-as-a 
p~e~e~Qisi~e-~~-~~~~~-iffiffiQRi~y Immunity from liability is 
determined in accordance with this subsection. 
A. 
A 
cause 
of 
action 
may 
not 
arise 
against 
the 
superintendent, 
. the 
superintendent's 
authorized 
representatives 
or 
any 
examiner 
appointed 
by 
the 
superintendent for any statements made or conduct performed 
in good faith while carrying out the provisions of this 
chapter. 
B. 
A cause of action may not arise against any person for 
the act of communicating or delivering information or data 
to 
the 
superintendent or the superintendent's authorized 
representative or examiner pursuant to an examination made 
under this chapter if the act of communication or delivery 
was performed in good faith and without fraudulent intent or 
the intent to deceiye. This paragraph does not abrogate or 
modify in any way any common law or statutory privilege or 
immunity heretofore enjoyed by 
any person identified in 
paragraph A. 
C. 
A person identified in paragraph A or B is entitled to 
an award of attorney's fees and costs if that person is the 
prevailing party in 
a 
civil cause of action for libel, 
slander or any other relevant tort arising out of activities 
in carrying out the provisions of this chapter and the party 
bringing the action was not substantially justified in doing 
so. 
For 
purposes 
of 
this 
paragraph, 
a 
proceeding 
is 
"substantially justified" if the proceeQing had a reasonable 
basis in law or fact at the time that it was initiated. 
5. 
Conduct of examinations. The following provisions govern 
the conduct of examinations. 
A. 
Upon 
determining 
that 
an 
examination 
should 
be 
conQucted, 
the superintendent shall issue 
an examination 
warrant appointing one or more 
examiners to perform the 
examination and instructing them as to the scope of the 
examination. 
In conducting the examination, 
the examiner 
shall 
observe 
those 
guidelines 
and 
procedures 
as 
the 
superintendent considers appropriate. 
B. 
Every licensee or person from whom information is sought 
and its officers, directors and agents shall provide to the 
examiners 
timely, 
convenient 
and 
free 
access 
at 
all 
reasonable 
hours 
at its offices 
to all books, 
records, 
accounts, papers, 
documents, assets and computer or other 
recordings relating to the property, assets, business and 
affairs of 
the 
licensee or person being examined. 
The 
officers, directors, employees and agents of the licensee or 
person shall facilitate the examination and aid in the 
examination insofar as it is in their power to do so. 
The 
refusal of a licensee, by its officers, directors, employees 
or agents, to submi t 
to examination or to comply with any 
reasonable written request of the superintendent is grounds 
for suspension or refusal of, or nonrenewal of, any license 
or authority held by the licensee to engage in the business 
of 
settlements 
or 
other 
business 
subject 
to 
the 
superintendent's 
jurisdiction. 
Any 
proceedings 
for 
suspension, 
revocation 
or 
refusal 
of 
any 
license 
or 
authority must be conducted pursuant to Title 5, 
chapter 
375, subchapter 4. 
C. 
The superintendent has the power to issue subpoenas, to 
administer oaths and to examine under oath any person as to 
any matter pertinent to the examination. 
Upon the failure 
or 
refusal 
of 
a 
person 
to 
obey 
a 
subpoena, 
the 
superintendent 
may 
petition 
a 
court 
of 
competent 
jurisdiction and, upon proper showing, the court may enter 
an order compelling the witness to appear and testify or 
produce documentary evidence. 
Failure to obey the court 
order is punishable as contempt of court. 
D. 
When 
making 
an 
examination under 
this 
chapter, 
the 
superintendent may retain attorneys, appraisers, independent 
actuaries, independent certified public accountants or other 
professionals or specialists as examiners, 
the reasonable 
cost of which must be borne by the licensee that is the 
subject of the examination. 
E. 
This 
chapter 
may 
not 
be 
construed 
to 
limit 
the 
superintendent's 
authority 
to 
terminate 
or 
suspend 
an 
examination in order to pursue other legal or regulatory 
action 
pursuant 
to 
the 
insurance 
laws 
of 
this 
State. 
Findings 
of 
fact 
and 
conclusions 
made 
pursuant 
to 
any 
examination 
are 
prima 
facie 
evidence 
in 
any 
legal 
or 
regulatory action. 
F. 
This 
chapter 
may 
not 
be 
construed 
to 
limit 
the 
superintendent's authority to use and, if appropriate, to 
make public any final or preliminary examination report, any 
examiner or licensee workpapers or other documents or any 
other information discovered or developed during the course 
of 
any examination in the 
furtherance 
of 
any 
legal or 
regulatory 
action 
that 
the 
superintendent 
may, 
in 
the 
superintendent's sole discretion, consider appropriate. 
6. 
Examination reports. Examination reports may be composed 
only 
of 
facts 
appearing 
upon 
the 
books, 
records 
or 
other 
documents of the licensee or its agents or other persons examined 
or as ascertained from the testimony of its officers or agents or 
other 
persons 
examined 
concerning 
its 
affairs 
and 
of 
such 
conclusions and recommendations as the examiners find reasonably 
warranted 
from 
the facts. 
No 
later than 
days 
following 
completion of the examination, the examiner in charge shall file 
under oath with the superintendent a verified written report of 
examination. 
Upon 
receipt 
of 
the 
verified 
report, 
the 
superintendent 
shall 
transmit 
the 
report 
to 
the 
licensee 
examined, 
together with 
a 
notice that affords 
the 
licensee 
examined a reasonable opportunity of not more than 30 days to 
make a written submission or rebuttal with respect to any matters 
contained 
in 
the 
examination 
report. 
In 
the 
event 
the 
superintendent determines that regulatory action is appropriate 
as a result of an examination, the superintendent may initiate 
any proceedings or actions provided by law. 
7. 
Confidentiality 
of 
examination 
information. 
The 
disclosure of information is governed by this subsection. 
A. 
Names and individual identification data for all viators 
and insured persons are considered private and confidential 
information and may not be disclosed by the superintendent, 
unless required by law. 
B. 
Except 
as 
otherwise 
provided 
in this 
chapter, 
all 
examination 
reports, 
workpapers, 
recorded 
information, 
documents and copies thereof produced by, obtained by or 
disclosed to the superintendent or any other person in the 
course of an examination made under this chapter, or in the 
course of analysis or investigation by the superintendent of 
the financial condition or market conduct of a licensee, are 
confidential by 
law 
and privileged, 
are not subject to 
subpoena and are not subject to discovery or admissible in 
evidence in any private civil action. 
The superintendent is 
authorized 
to 
use 
the 
documents, 
materials 
or 
other 
information in the furtherance of any regulatory or legal 
action brought 
as part of the 
superintendent's official 
duties. 
For 
the 
purposes 
of 
this 
paragraph 
and 
paragraph 
C, 
"chapter" includes the law of another state or jurisdiction 
that is substantially similar to this chapter. 
C. 
Documents, materials or other information, 
including, 
but not limited to, all workpapers and copies thereof, in 
the possession or control of the National Association of 
Insurance Commissioners, or its successor organization, and 
its affiliates and subsidiaries are confidential by law and 
privileged, are not subject to subpoena and are not subject 
to discovery or admissible in evidence in any priyate ciyil 
action if they are: 
(1) 
Created, produced or obtained by or disclosed to 
the National Association of Insurance Commissioners, or 
its successor 
organization, 
and its affiliates 
and 
subsidiaries in the course of assisting an examination 
made under this chapter or assisting a superintendent 
in the 
analysis 
or 
investigation of 
the 
financial 
condition or market conduct of a licensee; or 
(2) Disclosed to the National Association of Insurance 
Commissioners, or its successor organization, and its 
affiliates and subsidiaries under paragraph D by 
a 
superintend!;!nt. 
D. 
The 
superintendent 
and 
any 
person 
that 
receives 
documents, material or other information while acting und!;!r 
the authority of the superintendent, including the National 
Association of Insurance Commissioners, 
or its successor 
organization, and its affiliates and subsidiaries, may not 
t!;!stify 
in 
any 
private 
civil 
action 
concerning 
any 
confidential documents, materials or information subject to 
paragraph A. 
E. 
In 
order 
to 
assist 
in 
the 
performance 
of 
the 
superintendent's duties, the superintendent: 
(1) 
May 
share 
documents, 
materials 
or 
other 
information, including the confide_ntial and privileged 
documents, 
materials 
or 
information 
subject 
to 
paragraph 
A, 
with 
other 
state, 
federal 
and 
international regulatory agencies, 
with the National 
Association 
of 
Insurance 
Commissioners, 
or 
its 
successor 
organization, 
and 
its 
affiliates 
and 
subsidiar ies and with state, federal and international 
law enforc!;!ment authoriti!;!s, as long as th!;! recipi!;!nt 
agrees to maintain the confidentiality and privileged 
status of the documents, materials, 
communication or 
other information; and 
(2) May receive docum!;!nts, materials, communications or 
information, 
including 
otherwise 
confidential 
and 
privileged documents, 
materials or information, 
from 
the National Association of Insuranc!;! Commissioners, or 
its successor organization, 
and its affiliat!;!s 
and 
subsidiaries and from regulatory and law enforcement 
officials of foreign or other domestic jurisdictions 
and shall maintain as confidential or privileged any 
document, material or information received with notice 
or 
the 
understanding 
that 
it is 
confidential 
or 
privileged under the laws of the jurisdiction that is 
the source of the document, material, or information. 
F. 
A waiver 
of 
any 
applicable privilege or 
claim of 
confidentiality in the documents, materials or information 
does 
not 
occur 
as 
a 
result 
of 
disclosure 
to 
the 
superintendent under this section or as a result of sharing 
as authorized in paragraph E. 
G. 
A privilege established under the law of any state or 
jurisdiction that is substantially similar to the privilege 
established under this subsection is available and enforced 
in any proceeding in, and in any court of, this State. 
H. 
This 
chapter 
may 
not 
prevent 
or 
be 
construed 
as 
prohibiting the superintendent from disclosing the content 
of an examination report or preliminary examination report 
or 
results, 
or 
any 
matter 
relating 
thereto, 
to 
the 
superintendent of insurance of any other state or country or 
to law enforcement officials of this State or any other 
state or an agency of the Federal Government at any time or 
to the National Association of Insurance Commissioners, or 
its successor organization, as long as such agency or office 
receiving the report or matters relating thereto agrees in 
writing to hold it confidential and in a manner consistent 
with this chapter. 
8. 
Conflict of interest. The following provisions apply. 
A. 
An examiner may not be appointed by the superintendent 
if the 
examiner, 
either directly or 
indirectly, 
has 
a 
conflict of interest or is affiliated with the management of 
or 
owns 
a 
pecuniary interest in 
any 
person subject to 
examination under this chapter. 
This section may not be 
construed to automatically preclude an examiner from being: 
(1) A viator; 
(2) An insured in an insurance policy acquired pursuant 
to a settlement contract; or 
(3) 
A beneficiary in 
an 
insurance 
policy that is 
proposed 
to 
be 
acquired 
pursuant 
to 
a 
settlement 
contract. 
B. 
Notwithstanding the requirements of this subsection, the 
super intendent 
may 
retain 
from 
time 
to 
time, 
on 
an 
individual 
basis, 
qualified 
actuaries, 
certified 
public 
accountants or similar individuals 
who 
are independently 
practicing their professions. even though these persons may 
from time to time be similarly employed or retained by 
persons subject to examination under this chapter. 
9. 
Inv~atiye authority of s.Yperintendent. In addition 
to 
the 
authority 
granted 
pursuant 
to 
section 
220, 
the 
superintendent may investigate persons engaged in the business of 
settlements 
and 
persons 
suspected of 
engaging in fraudulent 
viatical or life settlement acts. 
§6808. 
Disclosure 
A--Yia~iea± With 
each 
application 
for 
a 
settlement, 
a 
settlement 
provider 
eF--~~--~~~~--pFeQyeeF shall 
disclose 
in 
writing 
at 
least 
the 
following 
iR~eFma~ieR 
~losures to 
the--Yia~e£--~~~--~~-~~-~~--~Se--yiatiea± 
sett±emeRt-€e~~£a€~-~~~~-&y-the ~ viator+. 
Disclosure to a 
viator must include distribution of a brochure, approved by the 
superintendent, 
describing 
the 
process 
of 
settlements. 
The 
disclosures must be provided 
to the viator no later than the 
time the application for the settlement contract is signed by all 
parties and must be signed by the viator and the settlement 
provider and provide the following information: 
1. 
Alternatives or options. 
Possible alternatives to or 
options that can be used in conjunction with yiatieal settlement 
contracts 
~eF--pe£5e~5--~~~-~~~~~-~F--li~e-thFeateRiR~ 
i±±Resses, 
including, 
but 
not 
limited to, 
accelerated death 
benefits or policy loans offered by the issuer of the life 
insurance pOlicy; 
2. 
Federal tax implications. 
The fact that some or all of 
the proceeds of the Yia~ieal settlement contract may be free from 
federal income tax under the federal Health Insurance Portability 
and Accountability Act of 1996, Public Law 104-191; 
and that 
restrictions, qualifications and other tax 
laws, 
particularly 
those of the state in which the viator resides, may apply and 
assistance should be sought from a professional tax advisor; 
3. 
State tax implications. 
The fact that some or all of 
the proceeds of the 
Yia~iea± settlement may be free from state 
income 
tax 
under 
section 
6809~ 
and 
that 
restrictions, 
qualifications and other tax laws, including those of the 
g~a~e 
state in which the viator resides, 
may 
apply and assistance 
should be sought from a professional tax advisor; 
4. 
Claims of creditors. 
The fact that proceeds of the 
Yia~iea± settlement could be subject to the claims of creditors; 
5. 
Effect on government benefits. 
The fact that Feee:i:pts 
receipt of v:i:atiee.-±--se-1:-1:-1effieB1;s the proceeds of the settlement 
may adversely affect the recipient's eligibility for Medicaid or 
other means-based government programs, benefits or entitlements 
and that advice should be obtained from the appropriate agencies; 
6. 
Right to rescind. 
The 
peJ::i:ey---GWne-:r;:..~--E>-r--eeF1;:i:~:i:eate 
heJ:aeF~s fact that the viator has the right to rescind a v:i:at:i:eaJ: 
settlement 
contract before 
the earlier of 
the--69th--aay lQ 
calendar days after the date upon which the v:i:at:i:eaJ: settlement 
contract is executed by geth all parties or the--J:.O..t-h--aay .l5. 
calendar days after the date upon which payment is received by 
the viator as provided in section 6809t-aRa. 
If exercised by the 
viator, 
rescission is effective only if both notice of 
the 
rescission is giyenq.nd 
repayment 
of all 
proceeds 
and 
any 
premiums, loans and loan interest to the settlement provider is 
made within the rescission period. 
If the insured dies during 
the rescission period, the settlement contract is deemed to have 
been rescinded, 
subject to repayment of all proceeds and any 
premiums, loans and loan interest to the settlement provider; 
1. 
Potential reduction or loss of benefits to beneficiary. 
The fact that 
a-~-e-f.--the--¥ia-1:-i-ea-1--6e~~-±emeR-t--:w-i-1-1--ge 
the-~~~~-seme-~-~1-1--e{--the-~~-geRefit-~~~~:r;:..-the 
±i{e-~~~~-¥9-1-iGy-e±-~~~~~~~-1;e---t~e-~:r;:..r~-geRefie:i:aFY 
eF-~~~~~~~-e-~-~Re-~l~~-e-F-£e±-t~~~£~-te-~~-viatieateaT 
entering into a settlement contract may cause other rights or 
benefits, 
including 
conversion 
rights 
and 
waiver 
of 
premium 
benefits that may exist under the policy or certificate, to be 
forfeited by the viator and that assistance should be sought from 
a financial adviser; 
8. Funds. 
The fact that funds will be sent to the viator 
within 3 business days after the settlement provider has received 
the 
insurer's 
or 
group 
administrator's 
acknowledgment 
that 
ownership of the policy or interest in the certificate has been 
transferred and the beneficiary has been designated; and 
9. 
Privacy 
disclosure. 
A 
statement 
containing 
the 
following 
language: 
"All 
medical, 
financial 
or 
personal 
information solicited or obtained by a 
settlement provider or 
settlement producer about an insured, 
including the insured's 
identity or 
the identity of 
family 
members, 
a 
spouse 
or 
a 
significant other, may be disclosed as necessary to effect the 
settlement 
contract 
between 
the 
viator 
and 
the 
settlement 
provider. If you are asked to provide this information, you will 
be asked to consent to the disclosure. The information may be 
provided to someone who buys the policy or provides funds for the 
purchase. 
You may be asked to renew your permission to share 
information every 2 years." 
Sec. II. 24·A MRSA §6808·A is enacted to read: 
§6808-A. 
Contact with insured: additional disclosures 
1.. 
Contact with insured. The insured may be contacted by 
either the settlement provider or its authorized representative 
for the purpose of determining the insured's health status. This 
contact is limited to once every 3 months if the insured has a 
life expectancy of more than one year and no more than once per 
month if the insured has a life expectancy of one year or less. 
2. 
Additional disclosures. 
A 
settlement provider 
shall 
provide the viator with at least the following disclosures no 
later than the date the settlement contract is signed by all 
Qarties. 
The disclosures must be conspicuously displayed in the 
settlement contract or in a 
separate document signed by the 
viator and the settlement provider or settlement producer and 
must provide the following information: 
A. 
The affiliation, if any, between the settlement provider 
and 
the issuer of 
the 
insurance policy to be 
ac~uired 
pursuant to a settlement contract; 
B. 
The name, address and telephone number of the settlement 
provider; 
C. 
If an insurance policy to be purchased has been issued 
as a joint policy or involves family riders or any coverage 
of a life other than the insured's under the policy to be 
purchased, 
information 
regarding 
the 
possible 
loss 
of 
coverage on the other lives under the policy and advice to 
consult with the viator's insurance producer or the insurer 
issuing the policy for advice on the proposed settlement; 
D. 
The dollar amount of the current death benefit payable 
to the settlement provider under the policy or certificate. 
If known, 
the settlement provider shall also disclose the 
availability 
of 
any 
additional 
guaranteed 
insurance 
benefits, 
the dollar amount of any accidental death and 
dismemberment benefits under the policy or certificate and 
the settlement provider's interest in those benefits; and 
E. 
The name, business address and telephone number of the 
independent 3rd-party escrow agent and the fact that the 
viator may inspect or receive copies of the relevant escrow 
or trust agreements or documents. 
3. 
Notice of change in ownership or beneficiillY. If the 
settlement 
provider 
transfers 
ownership 
or 
changes 
the 
beneficiary of the 
insurance policy, 
the settlement provider 
shall communicate the change in ownership or beneficiary to the 
insured within 20 days after the change. 
Sec. 12. 24-A MRS A §6809, as amended by PL 2003, c. 320, §l, 
is further amended to read: 
§6809. 
General provisions for settlement contracts 
1. 
Prior 
conditions. 
A 
via~ieal 
settlement 
provider 
entering into a 
via~ieal settlement contract with a viator 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 contract; 
B. 
--A-
Prior 
to 
or at the 
time 
of execution of 
the 
settlement 
contract, 
a 
witnessed 
document 
in which 
the 
viator 
consents 
to 
the 
via~ieal 
settlement 
contract, 
ae*sewlea~es--~~--~h&--~~~~~-~--a--~~~~~--eF 
li~e-~a~ea~&BiB~-illsessT represents that the issQ~ea viator 
has 
a 
full 
and 
complete 
understanding of 
the viatieal 
settlement contract and that the 
issQ~ea viator has a full 
and 
complete 
understanding of 
the benefits of 
the life 
insurance policy asaL 
acknowledges that the iSSQFea viator 
has entered into the via~ieal settlement contract freely and 
voluntarily and, 
for 
persons 
who 
are terminally ill or 
chronically ill, acknowledges that the insured is terminally 
ill or chronically ill and that the terminal or chronic 
illness was diagnosed after the life insurance policy was 
issued; and 
C. 
Notwithstanding section 2159, subsection 3 or any other 
provisions of state law, a witsessea document in which the 
insured consents to the release of the insured's medical 
records to a settlement provider and, if the life insurance 
policy was 
issued less 
than 
years 
from 
the 
date 
of 
application 
for 
a 
settlement contract 
to 
the 
insurance 
company that issued the life insurance policy covering the 
life of the insured. 
The 
insurer shall 
respond 
to 
a 
request for verification of 
coverage submitted by a settlement provider not later than 30 
calendar days of the date the request is received. The request 
for verification of coverage must be made on a form approved by 
the superintendent. In its response, the insurer shall indicate 
whether, based on the medical evidence and documents provided, 
the insurer intends to pursue an investigation regarding the 
validity of the insurance contract. 
2. 
Confidentiality of medical information. 
information solicited or obtained by any licensee 
the 
applicable 
provisions 
of 
state 
law 
confidentiality of medical information. 
All medical 
is subject to 
relating 
to 
3. 
Unconditional 
rescission. 
All 
viatiea;b 
settlement 
contracts 
eRteFee--iRte--iR--tBis--State--eF--eRteFee--iRte--witB 
FesieeRts--~--~~~--State must 
contain 
a 
provision 
~eF--aR 
~ReeReitieRa;b-~~~~-peFiee-~~-~he-~~~i&~-~--~ae-~~-eay 
a~teF-~~-Qa~e-~-wh~£h--~ae-~~~~~--sett;lemeRt;-~~~-is 
eHee~tee-~-seth-~~~-e£-~~-~~£--Gay-~~~--t;ae-~~-~peR 
whieB-~--~-Feeeiyee--by-~~-viateF that the viator has the 
right to rescind a settlement contract before the earlier of 30 
calendar days after the date upon which the settlement contract 
is executed by all parties or 15 calendar days after the date 
upon which payment is received by the viator as provided in 
section 6808. 
aeeissieR Rescission if exercised by the viator is 
effective only if both notice of the Fee:i:ssieR rescission is 
given and a full Fet~FR-~~-~~-~-the-~£~~~ee-~-~&G~-a~eRt 
repayment 
of all proceeds 
and 
any 
premiums, 
loans 
and 
loan 
interest to the settlement provider is made within the Feeiss:i:eR 
rescission period. 
If the insured dies during the rescission 
period, the settlement contract is deemed to have been rescinded, 
subject to repayment of all proceeds and any premiums, loans and 
loan interest to the settlement provider. 
4. 
Transfer of insurance policy. IFRFReeiate;by--up<m--Feeeipt; 
~FeFR--~ae-~iat~--~--Qe£~me~~£--te-~~~Gt;-~~-~~~~--e~--t;Be 
iRs~FaRee-~~~~7-~~-viat;iea;b The settlement provider shall pay 
t;Be-~~-e~--~ae-~~~~--te-~-e£€£ew-~~-~~~-aeee~Rt; 
FRaRa~ee---by--~--iReepeReeH~--~~~£~~-~~--esa~ew--~---~--a 
st;at;e-eBaFt;eFee--eF--{eeeFa;b;by--ehaFt;eFee--~:i:HaRe:i:a;b--:i:Rst;:i:t;~t;ieRT 
wBese--aepesi~s-~~--~r~-~-~~-Fe£e~a~--Qepesit--*Rs~FaRae 
beFpeFat;ieR--eF--it;s--s~eeesseFT--peReiR~--ae*Rew;bee~FReRt;--e~--t;Be 
t;FaRs~eF-By-~~~~-~~-t;ae-pe;b:i:ey instruct the viator to send 
the executed documents required to effect the change in ownership 
or 
assignment 
or 
change 
in 
beneficiary 
directly 
to 
the 
independent escrow agent. Within 3 business days after the date 
the escrow agent receives the document, or from the date the 
settlement 
provider 
receives 
the 
documents, 
if 
the 
viator 
erroneously provides the documents directly to the provider, the 
settlement provider shall payor transfer the proceeds of the 
settlement into an escrow or trust account maintained in a state 
or federally chartered financial institution whose deposits are 
insured by 
the 
Federal Deposit 
Insurance Corporation or its 
successor. 
Upon 
payment of 
the 
settlement proceeds 
into the 
escrow account, 
the escrow agent shall deliver the original 
change in ownership or assignment or change in beneficiary forms 
to the settlement provider or related provider trust. Upon the 
escrow agent' s 
receipt of the acknowledgment of the properly 
completed transfer of ownership or assignment or designation of 
beneficiary from the insurance company, the escrow agent shall 
pay the settlement proceeds to the viator. 
~he-~~Qs~ee-e~-e6e~ew 
a~eR~-~ha~~-~~~~-~~-~~&-aQe-~e-~~~1at~~~-e~he~wise 
aeeeFaiR~-~~-~he-~~~~~~~~~~~-JB~~£~€~JeB~--~1at~~-Q~eR 
~eeei~~-e~-aekRew~ea~eR~-e~-~he-~~aRs~e~-~~em-~he-iRSQ~e~T 
5. 
Effect of failure to tender consideration. 
Failure to 
tender consideration for the via~iea~ settlement under the terms 
of the via~iea~ settlement contract renders the contract voidable 
for 
lack 
of 
consideration until 
the 
time 
consideration is 
tendered to and accepted by the viator. 
fiT--~~-p~9vide~T--~-iRae~eRaeR~-~~~-~~eaQee~ 
eF-~~~~~~-~~--maY-Be~-~~~-a-~ee7-~~~~~-e~heF 
va~Qab~e-~id&r~-~-~e£-~~iG&&-~£~-a-~~~~-se~~~emeR~ 
~FeviseF-~-~~~-iR--~~-~~~-as-~-~~~~--se~~~emeR~ 
~FeviseF-wi~h-Fes~ee~-~e-via~iea~-se~~~emeR~s-iR-~his-S~a~eT 
'1T---IBe9l1Kh--.:r-fl-€-eme--i:'~Wed--&y-t.He-~~"9'i~-pG-1-iG-yGWQe-~-ef' 
eFi~iRa~-~~~~~~~-h&lee~-~£~~-vJat.J€al-~~~-eeR~f'ae~ 
is-~~~€€~-~~-&~&&-iReeme-~a~-~l~-~-~he-€~~€B~-~~-~~-is 
sQb~ee~-~e-~eaef'a~-iReeme-~aHT 
8T--Adve~t.iGiB~-Gt.aada~dGT--~H€-~~~~~-~~~a~&-app~y 
~e-asveF~isiR~T 
AT--Aave£t.J6JR~-ffiH~~-~~~~~~-~~-~&~~&l&aG-by-~ae~ 
eF-imp~iea~ieRT 
8T---~-~-e~--lieeRseS-~~~1--~~~~--~~eviaeFsT 
via~iea~-~~~-aRa-~~--viatiea~-~~~-mQst 
Be-€~€a£~y-~~~~~-~a-a~~-a~~€£~J~€ffieB~~-~~~y-~hese 
eRtitiesT 
9. 
Contacts with the insured. 
An insured may designate one 
or more adult individuals in regular contact with the insured as 
the individual for all inquiries regarding the insured' s health 
status and, if that designation is made, 
a 
via~iea~ settlement 
providerT-~~~~~-~~~-eF-J~-~~~1--~~esQeeF may 
not make these inqu1r1es to the insured unless the settlement 
providerT-~~--eF--1ndependent.--pFeaQeeF is unable, for more 
than 30 days, to contact the designee after diligent effort. 
The 
insured may change this designation at any time upon written 
notice 
to 
the 
settlement 
providerT--iRse~eRaeR~--~f'eaQeeF--eF 
pFeSQeeF. 
Contacts 
with 
the 
insured 
for 
the 
purpose 
of 
determining the health status of the insured after the 
via~ieal 
settlement has occurred are limited to once every 3 months for 
insureds with an estimated life expectancy of more than one year 
and once per month for insureds with a life expectancy of one 
year or less. 
The viatieal settlement provider 
9~--viatieal 
se66leffieB6-9~9keF shall explain to the insured the procedure for 
these contacts prior to the time 6ae--i-nsu-Fed--ent.-e-r-s--iB69 the 
v4atieal settlement contract is entered into. 
The limitation in 
this rule on contacts does not apply to contacts made for reasons 
other than determining the insured's health status or necessary 
to maintain 
the policy 
in 
force. 
Settlement providers 
are 
responsible for the actions of their authorized representatives. 
Sec. 13. 24-A MRSA §§6810 to 6812, as enacted by PL 1997, c. 
430, §1 and affected by §2, are amended to read: 
§6810. 
Rules 
The 
superintendent 
may 
adopt 
rules 
implementing 
this 
chapterT-~~~-es6a91isaiB~-~~~-~eF-~~~-e~ 
paYffieR~s-~~-~ia~9Fs-~~-~-viatiea±-~~-~-e9R6ae6. 
These 
rules are routine technical rules under Title 5, chapter 375, 
subchapter II-A 2-A. 
Rules may be adopted to: 
I. 
Standards for 
eval~ating reasonableness of 
pa~nts. 
Establish standards for evaluating the reasonableness of payments 
to yiators under a viatical settlement contract only when the 
insured in the policy that is the subject of 
a 
settlement 
contract is terminally ill or chronically ill. 
This authority 
includes, but is not limited to, regulation of discount rates 
used to determine the amount paid in exchange for assignment, 
transfer, sale, devise or beguest of a benefit under a life 
insurance policy: 
2. 
LicensiJlg 
requir~ments 
and 
standards. 
Establish 
appropriate licensing reguirements and standards for continued 
licensure for settlement providers; 
3. 
Mechanism for financial accountability. 
Regui re a bond 
or other mechanism for financial accountability for settlement 
providers; 
4. 
Govern relationship and responsibilities. 
Gove rn the 
relationship and responsibilities of both insurers and settlement 
providers and settlement producers and others in the business of 
settlement during the period of consideration or effectuation of 
a settlement contract; and 
5. 
Implement 
other 
requirements. 
Implement 
any 
other 
reguirements of this chapter. 
§68ll. 
Prohibited practices and provisions under policies 
1. 
Assignment. 
The following provisions govern assignment. 
A. 
A policy of individual or group life insurance that 
permits assignment issued or delivered in this State may 
not, in any way, restrict the-~~6~Ee~ a person from making 
an 
absolute 
assignment 
of 
rights 
for 
consideration. 
Prohibited restrictions include, 
but are not limited to, 
assignments 
only 
as 
a 
gift 
and 
without 
consideration, 
assignments 
only 
to 
a 
limited 
class 
of 
persons 
and 
assignments only to a natural person and not to a 
legal 
entity. 
B. 
A life insurance company that acknowledges and records 
an absolute assignment of life insurance policy or rights 
under a group life insurance policy may rely solely on the 
authorization of the assignor to make the assignment and the 
life insurance company is not obligated to inquire into the 
validity, 
sufficiency 
or 
terms 
of 
the 
assignment. 
In 
acknowledging and recording an assignment, a life insurance 
company 
acting 
in 
good 
faith 
and 
reliance 
on 
the 
presentation 
of 
the 
absolute 
assignment, 
acts 
in 
a 
ministerial capacity and may exhibit no discretion as to 
whether an assignor may make the assignment or whether the 
assignment conforms with applicable law. 
2. 
Rights under an assignment. 
apply to an assignment. 
The following provisions 
A. 
For life insurance contracts that permit assignment: 
(1) 
AH--ias~Fe~ A person has 
the right to assign, 
transfer, sell or bequeath the ownership of or death 
benefit 
payable 
under 
a 
life 
insurance 
policy 
or 
certificate at any time for any remaining portion of 
that 
coverage 
after 
exercising 
any 
option 
for 
accelerated benefits; 
(2) 
AH-JH6~Ee~ A person also has the right to assign, 
transfer, sell, devise or bequeath the ownership of or 
death benefit payable under a life insurance policy or 
certificate if that coverage is on disability waiver of 
premium at any time; and 
(3) 
The 
absolute 
assignee 
of 
an 
individual 
life 
insurance policy or of all rights under a group life 
insurance policy has all rights at law or in equity as 
the assignor held under that policy, including, but not 
limited to, the right to convert the coverage to an 
individual policy, the right to timely notice of the 
right 
to 
that 
conversion 
at 
the 
time 
that 
right 
accrues, the right to make premium payments or take 
such other action as may be necessary under the policy 
in 
order 
to 
preserve 
the 
value 
of 
the 
coverage 
assigned, the right to receive information concerning 
the coverage, the right to receive notice of a lapse or 
discontinuation of coverage, 
the exclusive right to 
exercise any options concerning the assigned coverage 
during an open enrollment period and all such other 
rights and privileges initially granted to 
~Re-4~6~~ee 
a person under the terms of the individual or group 
life insurance pOlicy. 
B. 
AR-4R6~~ee ~e~n has the right to exercise 
for accelerated benefits under the terms of any 
or 
group 
life 
insurance 
policy 
at 
any 
time 
unassigned portion of that policy or certificate. 
any option 
individual 
for 
any 
3. 
Failure to give notice under 
group life insurance 
policy. 
If the rights under a group life insurance policy have 
been assigned and the administrator of the policy fails to give 
notice to the assignee that ~Re-4R6~~ee a person is no longer a 
covered person under the group and of the right to convert the 
policy to an individual life insurance policy, the period of time 
during which the assignee must make application for conversion 
under the terms of the group life insurance policy begins from 
the date the notice is given to the assignee. 
4. 
Riders and postsettlement increases or additions. 
With 
respect 
to 
policies 
containing 
a 
provision 
for 
double 
or 
additional indemnity for accidental death or any other riders or 
additional death benefits, including the increase in the death 
benefit in excess of the amount of the death benefits of the date 
the 
via~iea± settlement contract is effected at the time the 
policy is assigned, transferred, 
sold, devised or bequeathed, 
unless otherwise mutually agreed to in writing by the viator and 
the 
via~iea± settlement provider, the addi tional amount remains 
payable to the beneficiary last named by the viator prior to 
entering into the 
via~iea± settlement contract or to such other 
beneficiary other than the 
via~iea± settlement provider as the 
viator 
may 
thereafter 
designate 
or, 
in 
the 
absence 
of 
a 
designation, to the estate of the viator. 
5. 
Prohibition on settlements. 
It is a violation of this 
chapter for any person to enter into a settlement contract within 
a 
2-year period commencing with the date of issuance of the 
insurance policy or certificate unless the viator certifies to 
the 
settlement provider 
that 
one 
or 
more 
of 
the 
following 
conditions have been met within the 2-year period: 
A. 
The policy was issued upon the viator's exercise of 
conversion rights arising out of 
a 
group or individual 
policy, as long as the total of the time covered under the 
conversion policy plus the time covered under the prior 
policy is at least 24 months. The time covered under a group 
policy must be calculated without regard to any change in 
insurance 
carriers, 
as 
long 
as 
the 
coverage 
has 
been 
continuous and under the Same group sponsorship: and 
B. 
The 
viator 
sul;!mits 
independent 
evidence 
tQ 
the 
settlement 
prQvider 
thQt 
Qne 
or 
more 
Qf 
the 
fQllQwing 
CQnditiQns hQve l;!een met within the 2-year pedQdi 
(1) 
The 
viQtor 
or 
insured 
is 
terminally ill 
or 
chroniCQlly ill: or 
(2) 
The viQtor or insured disPQses of the viatQr's 
entire ownership interest in a closely held CQrpQration 
pursuant tQ the terms of a 
bUYQut 
Qr Qther similQr 
agreement in effect at the time the insurance PQlicy 
was initially issued. 
6. 
Submission of certification. 
If the settlement provider 
sul;!mits 
to 
the 
insurer 
a 
copy 
of 
the 
owner 
or 
insured's 
certification descril;!ed 
in subsection 
when 
the 
settlement 
provider submits a reguest to the insurer to effect the transfer 
of the policy or certificate to the settlement provider, the copy 
is deemed to conclusively establish that the settlement cQntract 
satisfies the reguirements Qf this section and the insurer shQII 
timely respond to the reguest. 
§6812. 
Insurance company practices 
1. 
Duty to provide information. 
AB 
In additiQn tQ the 
provisions in section 6809, an insurance company that is licensed 
to do business in this State shall promptly respond to reasonable 
requests 
for 
policy 
information 
from 
a 
viaeieal 
settlement 
providerr-v4ae4eal or settlement producer e~-4RQepeRQeBe-viaeieal 
p~eQyee~ upon the receipt of the following documents in the 
office of the insurance company: 
A. 
An 
authorization 
signed 
by 
the 
viator 
to 
release 
specified information regarding the policy or certificate to 
a 
named 
licensed viaeieal 
settlement providerr--viaeieal 
seeelemeRt--a~eBe or viaeieal settlement 
B~e*e~ prQducer: 
and 
B. 
A request in writing from the 8aH1eEi--l-i-0ense4--viat:ieal 
settlement 
providerT--v-i-a-t-i-£-a-l--se-t;.t;.~-a~eRt: or viat:ieal 
settlement 
BFekeF 
producer 
for 
the 
specified policy or 
certificate information. 
Requests 
for 
the 
following 
items 
related to 
the 
policy or 
certificate Bei8~-v4at4eateEi that is the subject of a settlement 
transaction are deemed to be reasonable: ownership of and death 
benefits under the policy or certificate; premium information on 
the policy or certificate; 
liens, 
assignments 
and additional 
benefits; 
waiver 
of 
premium; 
and 
ownership 
and 
assignment 
provisions. 
The information provided must be the most recent 
information on file. 
By rule, the superintendent may specify 
additional criteria for information requests deemed reasonable 
under this section by 
a 
viatieal settlement provider eF--aR 
iRseFe8seRt-viatieal-FFeSQeeF. 
2. 
Conversion of group insurance. 
An issuer or 3rd-party 
administrator of a group life insurance policy shall promptly 
issue an individual conversion policy if the conversion is being 
requested for the purpose of entering into a viatieal settlement 
contract. 
For the purposes of this section, issuance of such a 
policy is 
deemed timely if it meets 
relevant 
standards 
for 
timeliness 
under 
chapter 
23. 
This 
subsection 
may 
not 
be 
construed to create any new conversion rights not already granted 
by the policy or certificate being viatieateEi acquired pursuant 
to a settlement contract. 
3. 
Right to assign rights or benefits. 
Subsection 1 or 2 
does not prohibit a viator under a group life insurance policy 
from assigning rights or benefits under the policy to a licensed 
viatieal settlement provider or converting the coverage to an 
individual life insurance pOlicy. 
4. 
Assignment restrictions prohibited. 
A policy of group 
life insurance issued or in existence in this State that permits 
any assignment of a viator I s rights may not restrict the viator 
from making assignments other than by gift. 
5. 
Purchase of securities. 
This chapter does not require 
notice to the superintendent of, or restrict an insurance company 
from 
investing 
in, 
or 
participating 
in, 
or 
purchasing 
any 
securities issued in any transaction including without limitation 
any financing, securitization transaction or securities offering 
in 
which 
the 
licensed 
viatieal 
settlement 
provider 
sells, 
assigns, transfers, pledges, hypothecates or otherwise disposes 
of viatieal settlement contracts, viatieates policies acquired 
pursuant to settlement contracts or any interest therein. 
Sec. 14. 24·A MRSA §6813, as enacted by PL 1997, c. 430, §1 
and affected by §2, is repealed. 
Sec. 15. 24·A MRSA §6815, as enacted by PL 1997, c. 430, §1 
and affected by §2, is amended to read: 
§6815. 
Assignment or resale of policies 
1. 
Prohibited transfers. 
A 
Yia~ieal settlement provider 
may not sell, assign, transfer or pledge a 
Yia~iea~eg policy 
acquired pursuant to a settlement contract except to a licensed 
Yia~ieal settlement provider or a person exempt from licensing 
under section 6803 9F-a81~. 
2. 
Securities 
reqistration. 
Any 
sale 
by 
a 
Yia~ieal 
settlement provider of 
Yia~ieal settlement contracts, 
Yia,=iea~eg 
policies acquired pursuant to settlement contracts or interests 
ia- -a--Yia~ieal---se-t-t.J.-ement- ~&t,.F-aG-t,. - 9£- -¥-i-a-t;...i-oat.-e4--peliey therein 
that constitute a "security" within the meaning of the United 
States Securities Act of 1933, as amended, or the Revised Maine 
Securities Act, 
as 
amended, 
must 
be 
registered 
under 
those 
statutes unless there is an available exemption from registration 
under those statutes. 
Sec. 16. 24-A MRSA §6816, as enacted by PL 1997, c. 430, §1 
and affected by §2, is repealed. 
Sec. 17. 24·A MRSA §§6817 to 6819 are enacted to read: 
§6817. 
Adyertising of settlements 
1. 
Advertising for settlements. Every settlement provider 
licensee shall establish and at all times maintain a system of 
control over the content, form and method of dissemination of all 
advertisements 
of its contracts, 
products 
and 
services. 
All 
advertisements, regardless of by whom written, created, designed 
or presented, are the responsibility of the settlement provider 
licensee, as well as the individual who created or presented the 
advertisement. 
A 
system 
of 
control 
must 
include 
providing 
regular routine notification, at least once a year, to agents and 
others 
authorized 
by 
the 
settlement licensee 
to 
disseminate 
advertisements; the notification must include the requirements 
and procedures for approval of any advertisements not furnished 
by the settlement provider licensee prior to the advertisements' 
use. 
2. 
Form and content. Advertisements must be truthful and 
not misleading in fact or by implication. The form and content of 
an advertisement of a settlement contract must be sufficiently 
complete and clear so as to avoid deception. It may not have the 
~acity or 
tendency 
to 
mislead 
or 
deceive. 
Whether 
an 
advertisement has the capacity or tendency to mislead or deceive 
must 
be 
determined 
by 
the 
superintendent 
from 
the 
overall 
impression that the advertisement may be reasonably expected to 
create upon a person of average education or intelligence within 
the segment of the public to which it is directed. 
3. 
Stamlards for disclosure. 
An advertisement must comply 
with 
standards 
for 
disclosure 
determined 
by 
rule 
by 
the 
superintendent. 
4. 
Applicabil~ty. This section applies to any advertisement 
of settlement contracts or related products or services intended 
for dissemination in this State, including advertising on the 
Internet viewed by persons located in this State. If disclosure 
requirements are established pursuant to federal regulation, this 
section must 
be 
interpreted so 
as 
to 
m~n~m~ze or eliminate 
conflict with federal regulation whenever possible. 
§6818. 
Fraud prevention and control 
1. 
Fraudulent viatical or life settlement acts prohibited. 
NQtwithstanding any other provision of law to the contrary: 
A. 
A person may not commit a fraudulent viatical or life 
settlement act; 
B. 
A person may not knowingly or intentionally interfere 
with the enforcement of the provisions of this chapter or 
investigations of suspected or actual violations of this 
chapter; and 
C. 
A 
person 
in 
the 
business 
of 
settlements 
may 
not 
knowingly or intentionally permit any person convicted of a 
crime involving dishonesty or breach of trust to participate 
in the business of settlements. 
2. 
Fraud 
warning 
required. 
Settlement 
contracts 
and 
applications 
for 
settlements, 
regardless 
of 
the 
form 
of 
transmission, 
must 
contain 
the 
following 
statement 
or 
a 
substantially 
similar 
statement: 
"Any 
person 
who 
knowingly 
presents false information in an application for insurance or a 
settlement contract is guilty of a crime and may be subject to 
fines and confinement in prison." The lack of a 
statement as 
required in this subsection does not constitute a defense in any 
prosecution for a fraudulent viatical or life settlement act. 
~3~. __ ~Man~~d~a~t~o~r~y __ ~r~e~ting 
settlement 
acts. 
Any 
person 
of 
fraudulent viatical or life 
engaged 
in 
the 
business 
of 
settlements 
having 
knowledge 
or 
a 
reasonable 
belief that 
a 
fraudulent viatical or life settlement act is being, will be or 
has 
been 
committed shall provide 
to 
the 
superintendent the 
information reguired by, 
and in a 
manner prescribed by, 
the 
superintendent. 
Any 
other 
person 
haying 
knowledge 
or 
a 
reasonable belief that a fraudulent yiatical or life settlement 
act is being, will be or has been committed may proyide to the 
superintendent the information reguired by, 
and in a 
manner 
prescribed by, the superintendent. 
4. 
I_unity 
from 
liability. 
Except 
as 
proyided 
in 
subsection 5, civil liability may not be imposed on and a cause 
of action may not arise from a person's furnishing information 
concerning 
suspected, 
anticipated 
or 
completed 
fraudulent 
yiatical or life settlement acts 
or 
suspected or 
completed 
fraudulent insurance acts if the information is provided to or 
received from: 
A. 
The 
superintendent or the superintendent's employees, 
agents or representatives; 
B. 
FederaL state or local law enforcement or regulatory 
officials or their employees, agents or representatives; 
C. 
The National Association of Insurance Commissioners or 
its 
successor 
organization. 
National 
Association 
of 
Securities Dealers or its successor organization, the North 
American 
Securities 
Administrators 
Association 
or 
its 
successor 
organization, 
or 
their 
employees, 
agents 
or 
representatives of these organization, or other regulatory 
body overseeing life insurance, settlements securities or 
investment fraud; 
D. 
A person involved in the prevention and detection of 
fraudulent viatical or life settlement acts or that person's 
agents, employees or representatives; or 
E. 
The life insurer that issued the life insurance policy 
covering the life of the insured. 
5. 
Ezception. 
The 
following 
prov~s~ons apply 
to 
the 
imposition of civil liability arising from information proyided 
to or received from the superintendent or the superintendent's 
employees. agents or representatives. 
A. 
Subsection 4 
does not apply to statements made with 
actual malice. In an action brought against a person for 
filing a report or furnishing other information concerning a 
fraudulent viatical or life settlement act or a fraudulent 
insurance act. the party bringing the action shall plead 
specifically 
any 
allegation 
that 
subsection 
does not apply because the person filing the report or 
furnishing the information did so with actual malice. 
B. 
Subsection 4 does not apply to a person' s 
furnishing 
information 
concerning 
that 
person's 
own 
suspected, 
anticipated 
or 
completed 
fraudulent 
viatical 
or 
life 
settlement 
acts 
or 
suspected 
or 
completed 
fraudulent 
insurance acts. 
C. 
A person identified in subsection 4 is entitled to an 
award of attorney's fees and costs if that person is the 
prevailing party in a 
civil cause of action for libel, 
slander or any other relevant tort arising out of activities 
in carrying out the provisions of this chapter and the party 
bringing the action was not substantially justified in doing 
~. For 
purposes 
of 
this 
paragraph, 
a 
proceeding 
is 
"substantially justified" if it had a reasonable basis in 
law or fact at the time that it was initiated. 
D. 
This subsection does not abrogate or modify common law 
or statutory privileges or immunities enjoyed by a person 
described in subsection 4. 
6. 
Confidentiality. The following provisions apply. 
A. 
The 
documents 
and 
evidence 
provided 
pursuant 
to 
subsection 
or 
obtained 
by 
the 
superintendent 
in 
an 
investigation of suspected or actual fraudulent viatical or 
life settlement acts is privileged and confidential and is 
not a public record under Title It chapter 13 and is not 
subject to discovery or subpoena in a civil or criminal 
action. 
B. 
Paragraph 
A 
does 
not 
prohibit 
release 
by 
the 
superintendent of documents 
and evidence obtained in an 
investigation of suspected or actual fraudulent viatical or 
life settlement acts; 
(1) 
In 
administrative 
or 
judicial 
proceedings 
to 
enforce laws administered by the superintendent: 
(2) 
To 
federal, 
state or 
local 
law 
enforcement or 
regulatory agencies, to an organization established for 
the 
purpose 
of 
detecting 
and 
preventing 
fraudulent 
viatical or life settlement acts or to the National 
Association of Insurance Commissioners or its successor 
organization; or 
(3) 
At the discretion of the superintendent, 
to 
a 
person in the business of settlements that is aggrieved 
by a fraudulent viatical or life settlement act. 
c. 
Release of documents and evidence under paragraph B does 
not abrogate or modify the privilege granted in paragraph A. 
7. 
Other law enforCement or regulatory authority. This 
section does not: 
A. 
Preempt the authority or relieve the duty of other law 
enforcement or regulatory agencies to investigate, examine 
and prosecute suspected violations of law: 
B. 
Prevent or prohibit a person from disclosing voluntarily 
information concerning viatical or life settlement fraud to 
a 
law 
enforcement 
or 
regulatory 
agency other 
than 
the 
bureau: or 
c. 
Limit the powers granted elsewhere by the laws of this 
State to the superintendent or an insurance fraud unit to 
investigate and examine possible violations of law and to 
take appropriate action against wrongdoers. 
8. 
Viatical or life settlement antifraud initiatives. In 
accordance with this subsection, a settlement provider licensee 
must have in place antifraud initiatives reasonably calculated to 
detect. 
prosecute 
and 
prevent 
fraudulent 
viatical 
or 
life 
settlement acts. 
A. 
At 
the 
discretion 
of 
the 
superintendent, 
the 
superintendent may order, or a licensee may request and the 
superintendent may grant, such modifications of the required 
initiatives under paragraph B as necessary to ensure an 
effective antifraud program. The modifications may be more 
or less restrictive than the required initiatives as long as 
the modifications may reasonably be expected to accomplish 
the purpose of this subsection. 
B. 
Antifraud initiatives must include: 
(1) 
Fraud investigators, who may be employees of a 
settlement provider or independent contractors: and 
(2) 
An antifraud plan, which must be submitted to the 
superintendent. The antifraud plan must include, but is 
not limited to: 
(a) A description of the procedures for detecting 
and investigating possible fraudulent viatical or 
life settlement acts and procedures for resolving 
material inconsistencies between medical records 
and insurance applications; 
11;» 
A description of the procedures for reporting 
possible fraudulent viatical or life settlement 
acts to the superintendent; 
(c) 
A 
description 
of 
the 
plan 
for 
antifraud 
education and training of underwriters and other 
personnel; and 
(d) 
A 
description 
or 
chart 
outlining 
the 
organizational 
arrangement 
of 
the 
antifraud 
personneJ 
who 
are 
responsible 
for 
the 
investigation and r~orting of possible fraudulent 
viatical or life settlement acts and investigating 
unresolved 
material 
inconsistencies 
between 
medical records and insurance applications. 
C. 
Antifraud plans 
submitted to the 
superintendent are 
privileged and confidential and are not a 
public record 
under 
Title 1, 
chapter 
or 
subject 
to 
discovery 
or 
subpoena in a civil or criminal action. 
§68l9. 
Civil remedies; individual remedy 
1. 
Civil remedies 
and enfgrcement. 
In addition to 
the 
penalties available pursuant to section 6814, the superintendent 
may assess fines or take any other enforcement action permitted 
under section 12-A against any person who violates any provision 
of this chapter. 
2. Superior Court action. 
Any person who is injured by any 
action of a person in violation of this chapter may bring an 
action in Superior Court. The reguirements for notice and filing 
of a cause of action under this subsection are governed by the 
Maine Rules of Civil Procedure. The person may recover damages, 
together with costs and disbursements. 
3. 
No 
private right of 
provided in subsection 2 , this 
implied private right of action. 
action. 
chapter 
Except 
as 
specifically 
provides no express or 
SUMMARY 
This bill is submitted pursuant to Public Law 2003, chapter 
320, which directed the Superintendent of Insurance to convene a 
working 
group 
to 
review current 
law 
on viatical 
settlement 
contracts and to submit recommended legislation to specifically 
permit life settlement contracts and to make any other necessary 
changes to the laws regulating viatical settlement contracts. 
Maine law currently permits the use of viatical settlements but 
does not permit life settlements. 
While both settlements involve 
the 
sale 
of 
a 
life 
insurance 
policy 
or 
certificate 
for 
consideration, viatical settlements may be entered into only when 
the insured is either chronically or terminally ill, whereas, 
under a life settlement contract, these criteria need not be 
present. 
This bill 
amends 
Maine's 
current 
law 
on viatical 
settlement 
contracts 
to 
expressly 
permit 
life 
settlement 
contracts 
in 
accordance 
with 
requirements 
similar 
to 
those 
applicable to viatical settlements. 
The proposed amendments are 
consistent with the most recently adopted National Association of 
Insurance Commissioners Viatical Settlements Model Act.