Section R590-222-5 - License Requirements(1) Life Settlement Provider License.(a) A person may not perform or advertise a service as a life settlement provider without a valid license.(b) A life settlement provider license is issued on an annual basis upon: (i) the submission of a complete initial or renewal application; and(ii) the payment of any applicable fee under Section 31A-3-103.(c) An initial or renewal applicant for a life settlement provider license shall:(i) submit: (A) Appendix A for an initial application; or(B) Appendix B for a renewal application;(ii) for an initial application, provide a copy of the applicant's plan of operation that: (A) describes the market the applicant intends to target;(B) explains who will produce business for the applicant and how they will be recruited, trained, and compensated;(C) estimates the applicant's projected Utah business over the next 5 years;(D) describes the corporate organizational structure of the applicant, its parent company, and each affiliate;(E) describes the procedures used by the applicant to ensure that life settlement proceeds will be sent to the owner within three business days under Subsection 31A-36-110(3); and(F) describes the procedures used by the applicant to ensure that the identity, financial information, and medical information of an insured are not disclosed except as authorized under Section 31A-36-106;(iii) for an initial application, provide an antifraud plan required by Section 31A-36-117;(iv) for both an initial application and a renewal application, provide evidence of financial responsibility in the amount of $250,000 in the form of a surety bond issued by an insurer authorized in this state, according to the following terms: (A) the surety bond shall be in the favor of the state and shall specifically authorize recovery by the commissioner on behalf of any person in this state who sustained damages as the result of erroneous acts, failure to act, conviction of fraud, or conviction of unfair practices by the life settlement provider;(B) the evidence of financial responsibility shall remain in force for as long as the licensee is active;(C) the bond may not be terminated or reduced without 30 days prior written notice to the licensee and the commissioner; and(D) the commissioner may accept as evidence of financial responsibility proof that a surety bond is filed with the commissioner of any other state where the life settlement provider is licensed as a life settlement provider as long as the benefits provided by the surety bond extend to this state; and(v) provide other information required by the commissioner.(d) A new or renewal application may be denied if an officer holding more than 10% of the provider's stock, a partner, or a director fails to comply with Title 31A, Chapter 36, Life Settlements Act.(e) Failure to pay the renewal fee, submit the renewal application, or submit the annual report under Section R590-222-6 shall:(i) result in lapse of the license; and(ii) subject the life settlement provider to administrative penalty and forfeiture.(f) If a life settlement provider has, at the time of license renewal, life settlements where the insured has not died, the life settlement provider shall:(i) renew or maintain its current license status until the earlier of: (A) the date the life settlement provider properly assigns, sells, or otherwise transfers the life settlements where the insured has not died; or(B) the date that the last insured covered by a life settlement transaction has died; and(ii) designate, in writing, either the life settlement provider that entered into the life settlement or the life settlement producer who received commission from the life settlement, or a life settlement provider or life settlement producer licensed in this state, to make all inquiries to the owner, or the owner's designee, regarding health status of the insured and any other matters.(g) A license may not be issued to a nonresident life settlement provider unless a written designation of an agent for service of process is filed and maintained with the commissioner.(2) Life Settlement Producer license. A life settlement producer shall be licensed under Title 31A, Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries, with a life insurance line of authority.Utah Admin. Code R590-222-5
Amended by Utah State Bulletin Number 2023-15, effective 7/25/2023