Terms Used In Rhode Island General Laws 27-72-16

• Broker: means a person who, on behalf of an owner and for a fee, commission or other valuable consideration, offers or attempts to negotiate life settlement contracts between an owner and provider. See Rhode Island General Laws 27-72-2
• Business of life settlements: means an activity involved in, but not limited to, offering to enter into, soliciting, negotiating, procuring, effectuating, monitoring, or tracking, of life settlement contracts. See Rhode Island General Laws 27-72-2
• Commissioner: means the director of the department of business regulation or his or her designee. See Rhode Island General Laws 27-72-2
• Fraud: Intentional deception resulting in injury to another.
• Fraudulent life settlement act: includes :

  (i)  Acts or omissions committed by any person who, knowingly and 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, but not limited to:

  (A)  Presenting, causing to be presented or preparing with knowledge and belief that it will be presented to or by a provider, premium finance lender, broker, 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:

  (I)  An application for the issuance of a life settlement contract or insurance policy;

  (II)  The underwriting of a life settlement contract or insurance policy;

  (III)  A claim for payment or benefit pursuant to a life settlement contract or insurance policy;

  (IV)  Premiums paid on an insurance policy;

  (V)  Payments and changes in ownership or beneficiary made in accordance with the terms of a life settlement contract or insurance policy;

  (VI)  The reinstatement or conversion of an insurance policy;

  (VII)  In the solicitation, offer to enter into, or effectuation of a life settlement contract, or insurance policy;

  (VIII)  The issuance of written evidence of life settlement contract or insurance;

  (IX)  Any application for or the existence of or any payments related to a loan secured directly or indirectly by any interest in a life insurance policy; or

  (X)  Enter into any practice or plan which involves stranger originated life insurance (STOLI). See Rhode Island General Laws 27-72-2

• Person: means any natural person or legal entity including, but not limited to, a partnership, limited liability company, association, trust or corporation. See Rhode Island General Laws 27-72-2
• Provider: means a person, other than an owner, who enters into or effectuates a life settlement contract with an owner, a provider does not include:

  (i)  Any bank, savings bank, savings and loan association, credit union;

  (ii)  A licensed lending institution or creditor or secured party pursuant to a premium finance loan agreement which takes an assignment of a life insurance policy or certificate issued pursuant to a group life insurance policy as collateral for a loan;

  (iii)  The insurer of a life insurance policy or rider to the extent of providing accelerated death benefits or riders or cash surrender value;

  (iv)  Any natural person who enters into or effectuates no more than one agreement in a calendar year for the transfer of a life insurance policy or certificate issued pursuant to a group life insurance policy, for compensation or anything of value less than the expected death benefit payable under the policy;

  (v)  A purchaser;

  (vi)  Any authorized or eligible insurer that provides stop loss coverage to a provider; purchaser, financing entity, special purpose entity, or related provider trust;

  (vii)  A financing entity;

  (viii)  A special purpose entity;

  (ix)  A related provider trust;

  (x)  A broker; or

  (xi)  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, who purchases a life settlement policy from a provider. See Rhode Island General Laws 27-72-2

• Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.

History of Section.
P.L. 2009, ch. 195, § 1; P.L. 2009, ch. 262, § 1.