2006 Utah Code - 31A-36-102 — Definitions.

     31A-36-102.   Definitions.
     As used in this chapter:
     (1) (a) "Advertising" means any communication placed before the public to:
     (i) create an interest in viatical settlements; or
     (ii) induce a person to sell a policy or an interest in a policy pursuant to a viatical settlement.
     (b) "Advertising" includes the following, if the requirements of Subsection (1)(a) are met:
     (i) any written, electronic, or printed communication;
     (ii) any communication by means of recorded telephone messages;
     (iii) any communication transmitted on radio, television, the Internet, or similar communications media; and
     (iv) film strips, motion pictures, and videos.
     (2) "Business of viatical settlements" includes the following:
     (a) offering a viatical settlement;
     (b) solicitation of a viatical settlement;
     (c) negotiation of a viatical settlement;
     (d) procurement of a viatical settlement;
     (e) effectuation of a viatical settlement;
     (f) purchasing a viatical settlement;
     (g) investing in a viatical settlement;
     (h) financing a viatical settlement;
     (i) monitoring a viatical settlement;
     (j) tracking a viatical settlement;
     (k) underwriting a viatical settlement;
     (l) selling a viatical settlement;
     (m) transferring a viatical settlement;
     (n) assigning a viatical settlement;
     (o) pledging a viatical settlement; and
     (p) otherwise hypothecating viatical settlements.
     (3) "Chronically ill" means:
     (a) being unable to perform at least two activities of daily living, such as eating, toileting, moving from one place to another, bathing, dressing, or continence;
     (b) requiring substantial supervision for protection from threats to health and safety because of severe cognitive impairment; or
     (c) having a level of disability similar to that described in Subsection (3)(a).
     (4) (a) "Financing entity" means a person:
     (i) that has direct ownership in a policy that is the subject of the viatical settlement;
     (ii) whose principal activity related to the transaction is providing money to effect the viatical settlement; and
     (iii) that has an agreement in writing with one or more licensed providers of viatical settlements to finance the acquisition of one or more viatical settlements.
     (b) "Financing entity" includes, if the requirements of Subsection (4)(a) are met, the following:
     (i) an underwriter;

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     (ii) a placement agent;
     (iii) an enhancer of credit;
     (iv) a lender;
     (v) a purchaser of securities; and
     (vi) a purchaser of a policy from a provider of viatical settlements.
     (c) "Financing entity" does not include a nonaccredited investor or a purchaser of viatical settlements.
     (5) "Policy" means:
     (a) an individual or group policy;
     (b) a group certificate; or
     (c) a contract or arrangement of life insurance, whether or not delivered or issued for delivery in Utah:
     (i) affecting the rights of a resident of Utah; or
     (ii) bearing a reasonable relation to Utah.
     (6) (a) "Producer of viatical settlements" means a person that on behalf of a viator and for consideration offers or attempts to negotiate a viatical settlement between the viator and one or more providers of viatical settlements.
     (b) "Producer of viatical settlements" does not include an attorney licensed to practice law in any state, certified public accountant, or financial planner accredited by a nationally recognized accrediting agency:
     (i) that is retained by the viator; and
     (ii) whose compensation is not paid directly or indirectly by a provider or purchaser of viatical settlements.
     (7) (a) "Provider of viatical settlements" means a person other than a viator that enters into or effectuates a viatical settlement.
     (b) "Provider of viatical settlements" does not include:
     (i) a licensed lender that takes an assignment of a policy as security for a loan, including a:
     (A) bank;
     (B) savings bank;
     (C) savings and loan association;
     (D) credit union; or
     (E) other licensed lender;
     (ii) the issuer of a policy providing accelerated benefits pursuant to the policy;
     (iii) an authorized or eligible insurer that provides stop-loss coverage to:
     (A) a provider of viatical settlements;
     (B) a purchaser of viatical settlements;
     (C) a financing entity;
     (D) a special purpose entity; or
     (E) a related provider trust;
     (iv) a natural person that enters or effectuates no more than one agreement in a calendar year for the transfer of policies for a value less than the expected death benefit;
     (v) a financing entity;
     (vi) a special purpose entity;
     (vii) a related provider trust;

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     (viii) a purchaser of viatical settlements; or
     (ix) any of the following that purchases a viaticated policy from a provider of viatical settlements:
     (A) an accredited investor as defined in Regulation D, Rule 501, 17 C.F.R. Sec. 230.501; or
     (B) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A.
     (8) (a) "Purchaser of viatical settlements" means a person that, to derive an economic benefit:
     (i) gives a sum of money as consideration for a policy or an interest in the death benefits of a policy; or
     (ii) owns, acquires, or is entitled to a beneficial interest in a trust that:
     (A) owns a viatical settlement contract; or
     (B) is the beneficiary of a policy that has been or will be the subject of a viatical settlement.
     (b) "Purchaser of viatical settlements" does not include:
     (i) a licensee under this chapter;
     (ii) an accredited investor as defined in Regulation D, Rule 501, 17 C.F.R. Sec. 230.501;
     (iii) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A;
     (iv) a financing entity;
     (v) a special purpose entity; or
     (vi) a related provider trust.
     (9) "Related provider trust" means a trust established by a licensed provider of viatical settlements or a financing entity solely to hold the ownership of or beneficial interests in purchased policies in connection with financing.
     (10) "Special purpose entity" means an organization formed by a licensed provider of viatical settlements solely to enable the provider to gain access to institutional markets for capital.
     (11) "Terminally ill" means having a condition that reasonably may be expected to result in death within 24 months.
     (12) (a) "Viatical settlement" means a written agreement for the payment of anything of value, which is less than the expected death benefit of the policy, in exchange for the viator's assignment, sale, transfer, devise, or bequest of the death benefit or ownership of any portion of a policy.
     (b) "Viatical settlement" includes:
     (i) an agreement with a viator for a loan or other financing secured primarily by a policy; and
     (ii) an agreement with a viator to transfer ownership or change the beneficiary in the future, regardless of the date of payment to the viator.
     (c) "Viatical settlement" does not include:
     (i) a loan by an insurer pursuant to the terms of a policy; or
     (ii) a loan secured by the cash value of a policy.
     (13) "Viaticated policy" means a policy that has been acquired by a provider of viatical settlements pursuant to a viatical settlement.
     (14) (a) "Viator" means any of the following that seeks to enter into a viatical settlement:
     (i) the owner of a policy; or

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     (ii) the holder of a certificate of insurance under a policy of group insurance.
     (b) "Viator" is not limited to a person that is terminally ill or chronically ill except where that limitation is expressly provided.
     (c) "Viator" does not include:
     (i) a licensee under this chapter;
     (ii) an accredited investor as defined in Regulation D, Rule 501, 17 C.F.R. Sec. 230.501;
     (iii) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A;
     (iv) a financing entity;
     (v) a special purpose entity; or
     (vi) a related provider trust.

Enacted by Chapter 81, 2003 General Session