2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 508E - VIATICAL SETTLEMENT CONTRACTS
508E.15 - FRAUD PREVENTION AND CONTROL.

        508E.15  FRAUD PREVENTION AND CONTROL.
         1.  Fraudulent viatical settlement acts -- interference, and
      participation of convicted felons prohibited.
         a.  A person shall not commit a fraudulent viatical settlement
      act.
         b.  A person shall not knowingly or intentionally interfere
      with the enforcement of the provisions of this chapter or
      investigations of suspected or actual violations of this chapter.
         c.  A person in the business of viatical settlements shall not
      knowingly or intentionally permit any person convicted of a felony
      involving dishonesty or breach of trust to participate in the
      business of viatical settlements.
         2.  Fraud warning required.
         a.  A viatical settlement contract and application for a
      viatical settlement, regardless of the form of transmission, shall
      contain the following statement or a substantially similar statement:


         "Any person who knowingly presents false information in an
      application for insurance or viatical settlement contract is guilty
      of a crime and may be subject to fines and confinement in prison."

         b.  The lack of a statement as required in paragraph "a"
      does not constitute a defense in any prosecution for a fraudulent
      viatical settlement act.
         3.  Mandatory reporting of fraudulent viatical settlement
      acts.
         a.  Any person engaged in the business of viatical settlements
      having knowledge or a reasonable suspicion that a fraudulent viatical
      settlement act is being, will be, or has been committed shall provide
      to the commissioner such information as required by and in a manner
      prescribed by rules adopted by the commissioner.
         b.  Any other person having knowledge or a reasonable belief
      that a fraudulent viatical settlement act is being, will be, or has
      been committed may provide to the commissioner the information
      required by and in a manner prescribed by rules adopted by the
      commissioner.
         4.  Immunity from liability.
         a.  No civil liability shall be imposed on and no cause of
      action shall arise from a person who, acting reasonably and in good
      faith, furnishes information concerning suspected, anticipated, or
      completed fraudulent viatical settlement acts or suspected or
      completed fraudulent insurance acts, if the information is provided
      to or received from any of the following:
         (1)  The commissioner or the commissioner's employees, agents, or
      representatives.
         (2)  A federal, state, or local law enforcement or regulatory
      official or the official's employees, agents, or representatives.
         (3)  A person involved in the prevention and detection of
      fraudulent viatical settlement acts or that person's agents,
      employees, or representatives.
         (4)  The national association of insurance commissioners; the
      national association of securities dealers; the North American
      securities administrators association; their employees, agents, or
      representatives; or other regulatory body overseeing life insurance,
      viatical settlements, securities, or investment fraud.
         (5)  A life insurer that issued the life insurance policy covering
      the life of the insured.
         b.  Paragraph "a" does not apply to a statement made in
      bad faith or with actual malice.  In an action brought against a
      person for filing a report or furnishing other information concerning
      a fraudulent viatical settlement act, the party bringing the action
      shall plead specifically any allegation that paragraph "a" does
      not apply because the person filing the report or furnishing the
      information did so in bad faith or with actual malice.
         c.  A person furnishing information as identified in paragraph
      "a" shall be entitled to an award of attorney fees and costs if
      the person is the prevailing party in a civil cause of action for
      libel, slander, or any other relevant tort arising out of an activity
      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 it had
      a reasonable basis in law or fact at the time that it was initiated.
      However, such an award does not apply to any person furnishing
      information concerning the person's own fraudulent viatical
      settlement act.
         d.  This section does not abrogate or modify a common law or
      statutory privilege or immunity enjoyed by a person described in
      paragraph "a".
         5.  Confidentiality.
         a.  A document or evidence provided pursuant to subsection 4
      or obtained by the commissioner in an investigation of a suspected or
      actual fraudulent viatical settlement act shall be privileged and
      confidential, notwithstanding chapter 22, shall not be a public
      record, and shall not be subject to discovery or subpoena in a civil
      or criminal action.
         b.  Paragraph "a" does not prohibit the release by the
      commissioner of a document or evidence obtained in an investigation
      of a suspected or actual fraudulent viatical settlement act if any of
      the following applies:
         (1)  In an administrative or judicial proceeding to enforce laws
      administered by the commissioner.
         (2)  To a federal, state, or local law enforcement or regulatory
      agency, to an organization established for the purpose of detecting
      and preventing fraudulent viatical settlement acts, or to the
      national association of insurance commissioners.
         (3)  At the discretion of the commissioner, to a person in the
      business of viatical settlements that is aggrieved by a fraudulent
      viatical settlement act.
         c.  Release of a document or evidence under paragraph "b"
      does not abrogate or modify the privilege granted in paragraph
      "a".
         6.  Other law enforcement or regulatory authority.  This
      chapter shall not do any of the following:
         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 settlement fraud to a law enforcement
      or regulatory agency other than the commissioner.
         c.  Limit the powers granted elsewhere by the laws of this
      state to the commissioner or an insurance fraud unit to investigate
      and examine possible violations of law and to take appropriate action
      against wrongdoers.
         7.  Viatical settlement antifraud initiatives.
         a.  A viatical settlement provider or viatical settlement
      broker shall have in place antifraud initiatives reasonably
      calculated to detect, prosecute, and prevent fraudulent viatical
      settlement acts.  At the discretion of the commissioner, the
      commissioner may order, or a licensee may request and the
      commissioner may grant, such modifications of the following required
      initiatives as necessary to ensure an effective antifraud program.
      The modifications may be more or less restrictive than the required
      initiatives so long as the modifications may reasonably be expected
      to accomplish the purpose of this section.
         b.  Antifraud initiatives shall include all of the following:
         (1)  A fraud investigator, who may be a viatical settlement
      provider, viatical settlement broker, a viatical settlement
      provider's or viatical settlement broker's employee, or an
      independent contractor.
         (2)  An antifraud plan, which shall be submitted to the
      commissioner.  The antifraud plan shall include, but is not limited
      to all of the following:
         (a)  A description of the procedures for detecting and
      investigating possible fraudulent viatical settlement acts and
      procedures for resolving material inconsistencies between medical
      records and insurance applications.
         (b)  A description of the procedures for reporting possible
      fraudulent viatical settlement acts to the commissioner.
         (c)  A description of the plan for antifraud education and
      training of underwriters and other personnel.
         (d)  A description or chart outlining the organizational
      arrangement of the antifraud personnel who are responsible for the
      investigation and reporting of possible fraudulent viatical
      settlement acts and investigating unresolved material inconsistencies
      between medical records and insurance applications.
         c.  An antifraud plan submitted to the commissioner shall be
      privileged and confidential, notwithstanding chapter 22, shall not be
      a public record, and shall not be subject to discovery or subpoena in
      a civil or criminal action.  

         2008 Acts, ch 1155, §15
         Referred to in § 508E.3, 508E.5, 508E.6