SB513,8,8
1551.102 (17) (e) With respect to a viatical life settlement investment that is not
2a fractional or pool interest, "issuer" means the viatical settlement provider, as
3defined in s. 632.68 (1) (e) 632.69 (1) (p), or the person who purchases or otherwise
4acquires the viatical life settlement from a viatical settlement provider and then
5offers or sells viatical life settlement investments therein except that, under this
6paragraph, "issuer" does not include a broker-dealer or agent registered under this
7chapter and does not include the viator owner of the insurance policy, certificate of
8insurance, or death benefit underlying the viatical life settlement investment.
SB513, s. 9 9Section 9. 551.102 (28) (intro.) of the statutes is amended to read:
SB513,8,2210 551.102 (28) (intro.) "Security" means a note; stock; treasury stock; security
11future; bond; debenture; evidence of indebtedness; limited partnership interest;
12viatical life settlement investment or similar agreement; certificate of interest or
13participation in a profit-sharing agreement; collateral trust certificate;
14preorganization certificate or subscription; transferable share; investment contract;
15voting trust certificate; certificate of deposit for a security; fractional undivided
16interest in oil, gas, or other mineral rights; put, call, straddle, option, or privilege on
17a security, certificate of deposit, or group or index of securities, including an interest
18therein or based on the value thereof; put, call, straddle, option, or privilege entered
19into on a national securities exchange relating to foreign currency; or, in general, an
20interest or instrument commonly known as a "security"; or a certificate of interest
21or participation in, temporary or interim certificate for, receipt for, guarantee of, or
22warrant or right to subscribe to or purchase, any of the foregoing. The term:
SB513, s. 10 23Section 10. 551.102 (32) of the statutes is renumbered 551.102 (17m), and
24551.102 (17m) (intro.) and (a), as renumbered, are amended to read:
SB513,9,5
1551.102 (17m) (intro.) "Viatical Life settlement investment" means the entire
2interest or any fractional or pool interest in a life insurance policy or certificate of
3insurance or in the death benefit thereunder that is the subject of a viatical life
4settlement, as defined in s. 632.68 (1) (b) 632.69 (1) (j), but does not include any of
5the following:
SB513,9,86 (a) The assignment, transfer, sale, devise or bequest of a death benefit, life
7insurance policy, or certificate of insurance by the viator owner to a viatical
8settlement
provider pursuant to s. 632.68 632.69.
SB513, s. 11 9Section 11. 601.31 (1) (mm) of the statutes is amended to read:
SB513,9,1110 601.31 (1) (mm) For initial issuance of a license as a viatical settlement
11provider under s. 632.68 (2) 632.69 (2) (b), $750.
SB513, s. 12 12Section 12. 601.31 (1) (mp) of the statutes is amended to read:
SB513,9,1413 601.31 (1) (mp) For each annual renewal of a license as a viatical settlement
14provider under s. 632.68 (2) 632.69 (2) (j), $250.
SB513, s. 13 15Section 13. 601.31 (1) (mr) of the statutes is amended to read:
SB513,9,1716 601.31 (1) (mr) For initial issuance of a license as a viatical settlement broker
17under s. 632.68 (4) 632.69 (2) (b), $750.
SB513, s. 14 18Section 14. 601.31 (1) (ms) of the statutes is amended to read:
SB513,9,2019 601.31 (1) (ms) For each annual renewal of a license as a viatical settlement
20broker under s. 632.68 (4) 632.69 (2) (j), $250.
SB513, s. 15 21Section 15. 632.68 of the statutes is repealed.
SB513, s. 16 22Section 16. 632.69 of the statutes is created to read:
SB513,9,23 23632.69 Life settlements. (1) Definitions. In this section:
SB513,9,2524 (a) "Advertisement" means any written, electronic, or printed communication
25or any communication made by means of recorded telephone messages or

1transmitted on radio, television, the Internet, or similar communications media,
2including film strips, motion pictures, and videos, published, disseminated,
3circulated, or placed, directly or indirectly, before the public in this state for the
4purpose of creating an interest in or inducing a person to purchase or sell, assign,
5devise, bequeath, or transfer the death benefit or ownership of a policy or an interest
6in a policy pursuant to a life settlement contract.
SB513,10,127 (b) "Broker" means a person who, on behalf of an owner and for a fee,
8commission, or other valuable consideration, offers or attempts to negotiate life
9settlement contracts between an owner and one or more providers, or one or more
10brokers. "Broker" does not include an attorney or certified public accountant who is
11retained to represent the owner and whose compensation is not paid directly or
12indirectly by the provider or purchaser.
SB513,10,1713 (c) "Business of life settlements" means an activity involved in the offering
14soliciting, negotiating, procuring, effectuating, purchasing, investing in, financing,
15monitoring, tracking, underwriting, selling, transferring, assigning, pledging,
16hypothicating, or in any other manner, acquiring an interest in a policy by means of
17a life settlement contract.
SB513,10,1818 (d) "Chronically ill" means any of the following:
SB513,10,2019 1. Being unable to perform at least 2 activities of daily living, including eating,
20toileting, transferring, bathing, dressing, or continence.
SB513,10,2221 2. Requiring substantial supervision to monitor the health and safety of the
22individual due to his or her severe cognitive impairment.
SB513,10,2423 3. Having a level of disability similar to that described in subd. 1., as defined
24by the U.S. department of health and human services.
SB513,11,9
1(e) "Financing entity" means a person whose principal activity related to a life
2settlement is providing funds to effect the life settlement contract or purchase of one
3or more policies and who has an agreement in writing with one or more providers to
4finance the acquisition of life settlement contracts, including an underwriter,
5placement agent, lender, purchaser of securities, purchaser of a policy from a life
6settlement provider, credit enhancer, or any entity that has a direct ownership in a
7policy that is the subject of a life settlement contract. "Financing entity" does not
8include an investor that is not an accredited investor, as defined in 17 CFR 230.501
9(a), or a purchaser.
SB513,11,1310 (f) "Financing transaction" means a transaction in which a licensed provider
11obtains financing from a financing entity including any secured or unsecured
12financing, any securitization transaction, or any securities offering which is either
13registered or exempt from registration under federal and state securities law.
SB513,11,1414 (g) "Fraudulent life settlement act" includes all of the following:
SB513,11,1715 1. Acts or omissions that are committed by any person, or that a person permits
16its employees or its agents to engage in, for the purpose of pecuniary gain, including
17any of the following:
SB513,12,418 a. Presenting, causing to be presented, or preparing with the knowledge or
19belief that it will be presented to or by a provider, broker, purchaser, financing entity,
20insurer, insurance producer, or any other person, false material information, or
21concealing material information, as part of, in support of, or concerning a fact
22material to an application for the issuance of a life settlement contract or a policy;
23the underwriting of a life settlement contract or a policy; a claim for payment or
24benefit under a life settlement contract or a policy; premiums paid on an insurance
25policy; payments and changes in ownership or beneficiary made in accordance with

1the terms of a life settlement contract or a policy; the reinstatement or conversion of
2a policy; the solicitation, offer, effectuation, or sale of a life settlement contract or a
3policy; the issuance of written evidence of a life settlement contract or a policy; or a
4financing transaction.
SB513,12,65 b. Employing any plan, device, scheme, or artifice to defraud in the business
6of life settlements.
SB513,12,107 c. Failing to disclose to an insurer, if the request for such disclosure has been
8made by the insurer, that the prospective owner has undergone a life expectancy
9evaluation by any person or entity other than the insurer or its authorized
10representatives in connection with the issuance of the policy.
SB513,12,1211 2. Any of the following acts that any person does, or permits its employees or
12agents to do, in the furtherance of a fraud or to prevent the detection of a fraud:
SB513,12,1513 a. Removing, concealing, altering, destroying, or sequestering from the
14commissioner the assets or records of a licensee or other person engaged in the
15business of life settlements.
SB513,12,1716 b. Misrepresenting or concealing the financial condition of a licensee, financing
17entity, insurer, or other person.
SB513,12,2018 c. Transacting the business of life settlements in violation of laws requiring a
19license, certificate of authority, or other legal authority for the transaction of the
20business of life settlements.
SB513,12,2321 d. Filing with the commissioner or the chief insurance regulatory official of
22another jurisdiction a document containing false information or otherwise
23concealing information about a material fact from the commissioner or official.
SB513,13,3
13. Embezzlement, theft, misappropriation, or conversion of monies, funds,
2premiums, credits, or other property of a life settlement provider, insurer, insured,
3owner, or any other person engaged in the business of life settlements or insurance.
SB513,13,94 4. Recklessly entering into, negotiating, brokering, or otherwise dealing in a
5life settlement contract, the subject of which is a life insurance policy that was
6obtained by presenting false information concerning any fact material to the policy
7or by concealing for the purpose of misleading another information concerning any
8fact material to the policy, where the person or persons intended to defraud the
9policy's issuer, the provider, or the owner.
SB513,13,1110 5. Attempting to commit; assisting, aiding, or abetting in the commission of;
11or conspiring to commit the acts or omissions specified in this paragraph.
SB513,13,1412 6. Misrepresenting the state of residence of an owner to be a state that does not
13have a law substantially similar to this section for the purpose of evading or avoiding
14the provisions of this section.
SB513,13,1515 7. STOLI.
SB513,13,1616 (h) "Licensee" means a provider or broker that holds a license under sub. (2).
SB513,13,1917 (i) "Life expectancy" means the arithmetic mean, considering medical records
18and appropriate experiential data, of the number of months an insured under the
19policy to be settled can be expected to live.
SB513,14,220 (j) 1. "Life settlement" means an agreement regarding the terms under which
21compensation or any thing of value will be paid, which compensation or thing of value
22is less than the expected death benefit of the policy but greater than the cash
23surrender value or accelerated death benefit available under the policy at the time
24of the application for the life settlement, in return for the owner's present or future

1assignment, transfer, sale, devise, or bequest of the death benefit or any interest in
2a policy. "Life settlement" includes all of the following:
SB513,14,63 a. The transfer for compensation or value of ownership or beneficial interest
4in a trust or other entity that owns a policy that insures the life of a person residing
5in this state, if the trust or other entity was formed or availed of for the principal
6purpose of acquiring one or more policies or certificates of insurance.
SB513,14,87 b. A written agreement for a loan or other lending transaction, secured
8primarily by an individual or group policy.
SB513,14,159 c. A premium finance loan made for a policy on, before, or after the date of
10issuance of the policy but only if the loan proceeds are not used solely to pay
11premiums for the policy and any costs or expenses incurred by the lender or the
12borrower in connection with the financing, or if the owner receives on the date of the
13premium finance loan a guarantee of the future life settlement value of the policy,
14or if the owner agrees on the date of the premium finance loan to sell the policy or
15any interest in its death benefit on any date following the issuance of the policy.
SB513,14,1616 2. "Life settlement" does not include any of the following:
SB513,14,1917 a. A policy loan by a life insurance company pursuant to the terms of the policy
18or accelerated death provisions contained in the policy, whether issued with the
19original policy or as a rider.
SB513,14,2420 b. Except as provided in subd. 1. c., a premium finance loan or any loan made
21by a bank or other licensed financial institution, provided that neither default on
22such loan nor the transfer of the policy in connection with such default is pursuant
23to an agreement or understanding with any other person for the purpose of evading
24regulation under this section.
SB513,14,2525 c. A collateral assignment of a policy by an owner.
SB513,15,2
1d. A loan made by a lender that does not violate s. 138.12, if the loan is not
2described in subd. 1. c. and is not otherwise a life settlement contract.
SB513,15,63 e. An agreement where all the parties are closely related to the insured by blood
4or law, or have a lawful substantial economic interest in the continued life, health,
5and bodily safety of the person insured, or are trusts or other entities established
6primarily for the benefit of such parties.
SB513,15,97 f. Any designation, consent, or agreement by an insured who is an employee
8of an employer in connection with the purchase by the employer, or trust established
9by the employer, of life insurance on the life of the employee.
SB513,15,1710 g. A bona fide business succession planning arrangement between one or more
11shareholders in a corporation or between a corporation and one or more of its
12shareholders or one or more trusts established by or for the benefit of its
13shareholders; between one or more partners in a partnership or between a
14partnership and one or more of its partners or one or more trusts established by or
15for the benefit of its partners; or between one or more members in a limited liability
16company or between a limited liability company and one or more of its members or
17one or more trusts established by or for the benefit of its members.
SB513,15,2018 h. An agreement, contract, or transaction that the commissioner excludes by
19rule under sub. (20) (a) after determining that the agreement, contract, or
20transaction is not intended to be regulated by this section.
SB513,15,2221 (k) "Life settlement contract" means a written document providing for and
22establishing the terms of a life settlement.
SB513,16,223 (L) "Owner" means the owner of a policy or a certificate holder under a group
24policy who resides in this state, unless the context requires otherwise, and enters or

1seeks to enter into a life settlement contract. "Owner" does not include any of the
2following:
SB513,16,43 1. A licensee under this section, including a producer acting as a broker under
4this section.
SB513,16,552. A qualified institutional buyer, as defined in 17 CFR 230.144A (a) (1).
SB513,16,66 3. A financing entity.
SB513,16,77 4. A special purpose entity.
SB513,16,88 5. A related provider trust.
SB513,16,119 (m) "Policy" means an individual or group policy, certificate, contract, or
10arrangement of life insurance owned by a resident of this state, regardless of whether
11delivered or issued for delivery in this state.
SB513,16,1312 (n) "Premium finance loan" means a loan made primarily for the purpose of
13making premium payments on a policy that is secured by an interest in the policy.
SB513,16,1614 (o) "Producer" means any person licensed in this state as a resident or
15nonresident insurance intermediary or agent who has received qualification or
16authority for life insurance coverage or a life line of coverage pursuant to s. 628.04.
SB513,16,1817 (p) "Provider" means a person, other than an owner, that enters into or
18effectuates a life settlement contract with an owner. "Provider" does not include:
SB513,16,2119 1. A bank, savings bank, savings and loan association, credit union, or other
20licensed lending institution that takes an assignment of a policy solely as collateral
21for a loan.
SB513,16,2422 2. A premium finance company making premium finance loans and exempted
23by the commissioner from the licensing requirement under the premium finance law
24under s. 138.12 that takes an assignment of a policy solely as collateral for a loan.
SB513,16,2525 3. The issuer of a policy.
SB513,17,3
14. An authorized or eligible insurer that provides stop loss coverage or financial
2guaranty insurance to a provider, purchaser, financing entity, special purpose entity,
3or related provider trust.
SB513,17,64 5. Any natural person who enters into or effectuates no more than one
5agreement in a calendar year for the transfer of a policy for any value less than the
6expected death benefit.
SB513,17,77 6. A special purpose entity.
SB513,17,88 7. A related provider trust.
SB513,17,99 8. A purchaser.
SB513,17,1110 9. A person that the commissioner excludes by rule under sub. (20) (a) after
11determining that the definition is not intended to cover the person.
SB513,17,1412 (q) "Purchase agreement" means a contract or agreement entered into by a
13purchaser, to which the owner is not a party, to purchase a settled policy or an interest
14in a settled policy for the purpose of deriving an economic benefit.
SB513,17,2015 (r) "Purchaser" means a person who provides a sum of money as consideration
16for a policy or an interest in the death benefits of a policy, or a person who owns or
17acquires or is entitled to a beneficial interest in a trust that owns a life settlement
18contract or is the beneficiary of a policy that has been or will be the subject of a life
19settlement contract, for the purpose of deriving an economic benefit. "Purchaser"
20does not include any of the following:
SB513,17,2121 1. A licensee.
SB513,17,23222. An accredited investor, as defined in 17 CFR 230.501 (a), or qualified
23institutional buyer, as defined in 17 CFR 230.114A (a) (1).
SB513,17,2424 3. A financing entity.
SB513,17,2525 4. A special purpose entity.
SB513,18,1
15. A related provider trust.
SB513,18,42 (s) "Recklessly" means in conscious and clearly unjustifiable disregard of a
3substantial likelihood of the existence of the relevant facts or risks, the disregard
4involving a gross deviation from acceptable standards of conduct.
SB513,18,125 (t) "Related provider trust" means a trust that is established by a licensed
6provider or a financing entity for the sole purpose of holding the ownership or
7beneficial interest in purchased policies in connection with a financing transaction
8and that has a written agreement with the licensed provider under which the
9licensed provider is responsible for ensuring compliance with all statutory and
10regulatory requirements and under which the trust agrees to make all records and
11files relating to life settlement transactions available to the commissioner as if those
12records were maintained directly by the licensed provider.
SB513,18,1413 (u) "Settled" means, with respect to a policy, acquired by a provider under a life
14settlement contract.
SB513,18,2115 (v) "Special purpose entity" means a corporation, partnership, trust, limited
16liability company, or other similar entity formed solely to provide either direct or
17indirect access to institutional capital markets either for a financing entity or
18provider or in connection with a transaction in which the securities in the special
19purpose entity are either acquired by the owner or by a qualified institutional buyer,
20as defined in 17 CFR 230.114A (a) (1) or pay a fixed rate of return commensurate with
21established asset-backed institutional capital markets.
SB513,19,922 (w) "Stranger-originated life insurance" or "STOLI" means an act, practice,
23plan, or arrangement, individually or in concert with others, to initiate a life
24insurance policy for the benefit of a 3rd-party investor who, at the time of policy
25origination, has no insurable interest in the insured. STOLI includes cases in which

1life insurance is purchased with resources or guarantees from or through a person
2or entity who, at the time of policy inception, could not lawfully initiate the policy by
3the person or entity, and in which, at the time of inception, there is an arrangement
4or agreement, whether verbal or written, to directly or indirectly transfer the
5ownership of the policy or the policy benefits to a 3rd party. Trusts that are created
6to give the appearance of insurable interest, and are used to initiate policies for
7investors, violate insurable interest laws under s. 631.07 and the common law
8prohibition against wagering on life. STOLI does not include a loan, agreement,
9assignment, arrangement, or transaction set forth in sub. (1) (j) 2.
SB513,19,1110 (x) "Terminally ill" means having an illness or sickness that can reasonably be
11expected to result in death in 24 months or less.
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