(a) It shall be a violation of this part for any person to:

Terms Used In Connecticut General Statutes 38a-465i

  • Commissioner: means the Insurance Commissioner. See Connecticut General Statutes 38a-1
  • Contract: A legal written agreement that becomes binding when signed.
  • Insurance: means any agreement to pay a sum of money, provide services or any other thing of value on the happening of a particular event or contingency or to provide indemnity for loss in respect to a specified subject by specified perils in return for a consideration. See Connecticut General Statutes 38a-1
  • insurance company: includes any person or combination of persons doing any kind or form of insurance business other than a fraternal benefit society, and shall include a receiver of any insurer when the context reasonably permits. See Connecticut General Statutes 38a-1
  • Life insurance: means insurance on human lives and insurances pertaining to or connected with human life. See Connecticut General Statutes 38a-1
  • Person: means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a business trust, an unincorporated organization or other legal entity. See Connecticut General Statutes 38a-1
  • Policy: means any document, including attached endorsements and riders, purporting to be an enforceable contract, which memorializes in writing some or all of the terms of an insurance contract. See Connecticut General Statutes 38a-1
  • 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.
  • State: means any state, district, or territory of the United States. See Connecticut General Statutes 38a-1
  • under common control with: means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with the person. See Connecticut General Statutes 38a-1

(1) Enter into a life settlement contract if such person knows or reasonably should have known that the life insurance policy was obtained by means of a false, deceptive or misleading application for such policy;

(2) Engage in any transaction, practice or course of business if such person knows or reasonably should have known that the intent was to avoid the notice requirements of this section;

(3) Engage in any fraudulent act or practice in connection with any transaction relating to any settlement involving an owner who is a resident of this state;

(4) Issue, solicit, market or otherwise promote the purchase of an insurance policy for the purpose of or with the emphasis on settling the policy;

(5) Receive, if providing premium financing, any proceeds, fees or other consideration from the policy or policy owner that are in addition to the amounts required to pay principal, interest or any costs or expenses, which are reasonable in type and amount, incurred by the lender or borrower in connection with such premium finance agreement, except in the event of a default, provided neither default on such loan nor the transfer of the policy, in connection with such default, is pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this part. Any payments, charges, fees or other amounts received by a person or entity providing premium financing in violation of this subdivision shall be remitted to the original owner of the policy or to such owner’s estate if said original owner is not living at the time of the determination of the overpayment;

(6) With respect to any settlement contract or insurance policy and a broker, to knowingly solicit an offer from, effectuate a life settlement contract with or make a sale to any provider, financing entity or related provider trust that is controlling, controlled by or under common control with such broker, unless such relationship is disclosed to the owner;

(7) With respect to any life settlement contract or insurance policy and a provider, to knowingly enter into a life settlement contract with an owner if, in connection with such life settlement contract, anything of value will be paid to a broker that is controlling, controlled by or under common control with such provider, financing entity or related provider trust that is involved in such settlement contract, unless such relationship is disclosed to the owner;

(8) With respect to a provider, to enter into a life settlement contract unless the life settlement promotional, advertising and marketing materials, as may be prescribed by regulation, have been filed with the commissioner. In no event shall any marketing materials expressly reference that the insurance is free for any period of time. The inclusion of any reference in the marketing materials that would cause an owner to reasonably believe the insurance is free for any period of time shall be considered a violation of this part; or

(9) With respect to any life insurance producer, insurance company, broker or provider, to make any statement or representation to the applicant or policyholder in connection with the sale or financing of a life insurance policy to the effect that the insurance is free or without cost to the policyholder for any period of time unless so provided in the policy.

(b) A violation of this section shall be deemed a fraudulent life settlement act, as specified in § 38a-465j.

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