(a)  For any policy settled within five (5) years of policy issuance, each provider shall file with the commissioner on or before March 1 of each year an annual statement containing such information as the commissioner may prescribe by regulation. In addition to any other requirements, the annual statement shall specify the total number, aggregate face amount and life settlement proceeds of policies settled during the immediately preceding calendar year, together with a breakdown of the information by policy issue year. The annual statement shall also include the names of the insurance companies whose policies have been settled and the brokers that have settled said policies.

(1)  Such information shall be limited to only those transactions where the insured is a resident of this state and shall not include individual transaction data regarding the business of life settlements or information that there is a reasonable basis to believe could be used to identify the owner or the insured.

(2)  Every provider that willfully fails to file an annual statement as required in this section, or willfully fails to reply within thirty (30) days to a written inquiry by the commissioner in connection therewith, shall, in addition to other penalties provided by this chapter, be subject, upon due notice and opportunity to be heard, to a penalty of up to two hundred fifty dollars ($250) per day of delay, not to exceed twenty-five thousand dollars ($25,000) in the aggregate, for each such failure.

(3)  The department may have this annual report reviewed and analyzed by outside consultant(s) and the total cost of that review shall be borne by, billed directly to, and paid by the provider filing the annual statement.

Terms Used In Rhode Island General Laws 27-72-6

  • 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
  • Contract: A legal written agreement that becomes binding when signed.
  • Financing entity: means an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a provider, credit enhancer, or any entity that has a direct ownership in a policy or certificate that is the subject of a life settlement contract, but:

    (i)  Whose principal activity related to the transaction is providing funds to effect the life settlement contract or purchase of one or more policies; and

    (ii)  Who has an agreement in writing with one or more providers to finance the acquisition of life settlement contracts. See Rhode Island General Laws 27-72-2

  • in writing: include printing, engraving, lithographing, and photo-lithographing, and all other representations of words in letters of the usual form. See Rhode Island General Laws 43-3-16
  • Insured: means the person covered under the policy being considered for sale in a life settlement contract. See Rhode Island General Laws 27-72-2
  • Life settlement contract: means a written agreement entered into between a provider and an owner, establishing the terms under which compensation or any thing of value will be paid, which compensation or thing of value is less than the expected death benefit of the insurance policy or certificate, in return for the owner's assignment, transfer, sale, devise or bequest of the death benefit or any portion of an insurance policy or certificate of insurance for compensation; provided, however, that the minimum value for a life settlement contract shall be greater than a cash surrender value or accelerated death benefit available at the time of an application for a life settlement contract. See Rhode Island General Laws 27-72-2
  • Owner: means the owner of a life insurance policy or a certificate holder under a group policy, with or without a terminal illness, who enters or seeks to enter into a life settlement contract. 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
  • Policy: means an individual or group policy, group certificate, contract or arrangement of life insurance owned by a resident of this state, regardless of whether delivered or issued for delivery in this state. 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.
  • Special purpose entity: means a corporation, partnership, trust, limited liability company, or other legal entity formed solely to provide either directly or indirectly access to institutional capital markets:

    (i)  For a financing entity or provider; or

    (ii)  In connection with a transaction in which the securities in the special purpose entity are acquired by the owner or by a "qualified institutional buyer" as defined in Rule 144 promulgated under the Federal Securities Act of 1933, as amended; or

    (iii)  The securities pay a fixed rate of return commensurate with established asset-backed institutional capital markets. See Rhode Island General Laws 27-72-2

(b)  Except as otherwise allowed or required by law, a provider, broker, insurance company, insurance producer, information bureau, rating agency or company, or any other person with actual knowledge of an insured’s identity, shall not disclose the identity of an insured or information that there is a reasonable basis to believe could be used to identify the insured or the insured’s financial or medical information to any other person unless the disclosure:

(1)  Is necessary to effect a life settlement contract between the owner and a provider and the owner and insured have provided prior written consent to the disclosure;

(2)  Is necessary to effectuate the sale of life settlement contracts, or interests therein, as investments, provided the sale is conducted in accordance with applicable state and federal securities law and provided further that the owner and the insured have both provided prior written consent to the disclosure;

(3)  Is provided in response to an investigation or examination by the commissioner or any other governmental officer or agency or pursuant to the requirements of this chapter;

(4)  Is a term or condition to the transfer of a policy by one provider to another provider, in which case the receiving provider shall be required to comply with the confidentiality requirements of this chapter;

(5)  Is necessary to allow the provider or its authorized representatives to make contacts for the purpose of determining health status. For the purposes of this section, the term “authorized representative ” shall not include any person who has or may have any financial interest in the settlement contract other than a provider, licensed broker, financing entity, related provider trust or special purpose entity; further, a provider or broker shall require its authorized representative to agree in writing to adhere to the privacy provisions of this chapter; or

(6)  Is required to purchase stop loss coverage.

(c)  Non-public personal information solicited or obtained in connection with a proposed or actual life settlement contract shall be subject to the provisions applicable to financial institutions under the federal Gramm Leach Bliley Act, Pub. L. No. 106-102 (1999), and all other state and federal laws relating to confidentiality of non-public personal information.

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