Report Title:

Life Settlements Model Act; Stranger-Originated Life Insurance

 

Description:

Makes various clarifying and technical amendments, and corrects inadvertent errors, in the Life Settlements Model Act, chapter 431E, HRS, which establishes consumer protections in life settlement transactions. Effective 01/01/2020. (SB53 HD1)

 


THE SENATE

S.B. NO.

53

TWENTY-FIFTH LEGISLATURE, 2009

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO INSURANCE.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. Section 431E-2, Hawaii Revised Statutes, is amended by amending the definitions of "advertisement," "life expectancy," "life settlement contact," and "stranger-originated life insurance" to read as follows:

""Advertisement" means any written, electronic, or printed communication or any communication by means of recorded telephone messages or transmitted on radio, television, the Internet, or similar communications media, including film strips, motion pictures, and videos, which are published, disseminated, circulated, or placed [before the public,] directly [or indirectly,] before the public in this state, for the purpose of creating an interest in or inducing a person to purchase or sell, assign, devise, bequest, or transfer the death benefit or ownership of a policy or an interest in a policy pursuant to a life settlement contract.

"Life expectancy" means the arithmetic mean of the number of months the insured under the policy to be settled can be expected to live [as determined by a life expectancy company] considering medical records and appropriate experiential data.

"Life settlement contract" [means]:

(1) Means:

[(a)(1)] (A) A written agreement entered into between a provider and an owner, establishing the terms under which compensation or anything of value will be paid, which compensation or thing of value is less than the expected death benefit of the owner's policy or certificate, in return for the owner's assignment, transfer, sale, devise, or bequest of the death benefit or any portion of the policy or certificate for compensation, where the minimum value of the contract is greater than a cash surrender value or accelerated death benefit available under the policy or certificate at the time of an application for a life settlement contract;

[(2)] (B) The transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns such policy or certificate if the trust or other entity was formed or availed of for the principal purpose of acquiring one or more life insurance contracts, which life insurance contract [insures the life of a] is owned by a person residing in this [State;] state; or

[(3) (A) A written agreement for a loan or other lending transaction, secured primarily by an individual or group policy; or

(B)] (C) A premium finance loan made for a policy on or before the date of issuance of the policy where:

(i) The loan proceeds are not used solely to pay premiums for the policy and any costs or expenses incurred by the lender or the borrower in connection with the financing;

(ii) The owner receives on the date of the premium finance loan a guarantee of the future life settlement value of the policy; or

(iii) The owner agrees on the date of the premium finance loan to sell the policy or any portion of its death benefit on any date following the issuance of the policy[.]; and

["Life settlement contract" does] (2) Does not include:

[(b)(1)] (A) A policy loan by a life insurance company pursuant to the terms of the policy or accelerated death provisions contained in the policy, whether issued with the original policy or as a rider;

[(2)] (B) A premium finance loan, as defined herein, or any loan made by a bank or other licensed financial institution, so long as 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 chapter;

[(3)] (C) A collateral assignment of a policy by an owner;

[(4)] (D) A loan made by a lender that does not violate any insurance premium finance law of this State; provided that the loan does not qualify as a life settlement contract;

[(5)] (E) An agreement where all the parties:

[(A)] (i) Are closely related to the insured by blood or law; or

[(B)] (ii) Have a lawful substantial economic interest in the continued life, health, and bodily safety of the person insured, or are trusts established primarily for the benefit of such parties;

[(6)] (F) Any designation, consent, or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee;

[(7)] (G) A bona fide business succession planning arrangement:

[(A)] (i) Between one or more shareholders in a corporation or between a corporation and one or more of its shareholders or one or more trusts established by its shareholders;

[(B)] (ii) Between one or more partners in a partnership or between a partnership and one or more of its partners or one or more trusts established by its partners; or

[(C)](iii) Between one or more members in a limited liability company or between a limited liability company and one or more of its members or one or more trusts established by its members;

[(8)] (H) An agreement entered into by a service recipient, or a trust established by the service recipient, and a service provider, or a trust established by the service provider, who performs significant services for the service recipient's trade or business; or

[(9)] (I) Any other contract, transaction, or arrangement [that is a life settlement contract and] that the commissioner determines is not of the type intended to be regulated by this chapter.

"Stranger-originated life insurance" or "STOLI" [means a practice or plan to initiate a policy for the benefit of a third party investor who, at the time of policy origination, has no insurable interest in the insured, and includes:

(1) Arrangements in which life insurance is purchased with resources or guarantees from or through a person or entity who at the time of policy inception, could not lawfully initiate the policy by oneself or itself, and where, at the time of inception, there is an arrangement or agreement, whether verbal or written, to directly or indirectly transfer the ownership of the policy, the policy benefits, or both, to a third party; and

(2) Trusts created to give the appearance of insurable interest and used to initiate policies for investors.

"STOLI" does not include those practices set forth in subsection (b) of the definition of "life settlement contract".]:

(1) Means the procurement of new life insurance by persons or entities that lack insurable interest on the insured and, at policy inception, the person or entity owns or controls the policy or the majority of the death benefit in the policy and the insured or insured's beneficiaries receive little or none of the proceeds of the death benefits of the policy. Trusts that are created to give the appearance of insurable interest and are used to initiate policies for investors violate insurable interest laws and the prohibition against wagering on life; and

(2) Does not include the lawful assignment of a life insurance including a life settlement contract as defined in this chapter, or those practices set forth in paragraph (2) of the definition of "life settlement contract"."

SECTION 2. Section 431E-3, Hawaii Revised Statutes, is amended as follows:

1. By amending subsections (a) and (b) to read:

"(a) No person, wherever located, shall act as a provider or broker with an owner who is a resident of this [State,] state, without first having obtained a license from the commissioner[.], except as provided for in subsection (c).

(b) Application for a provider license or a broker license, except as provided for in subsection (c), shall be made to the commissioner by the applicant on a form prescribed by the commissioner, and the application shall be accompanied by a fee in the amount provided by section 431:7-101."

2. By amending subsection (d) to read:

"(d) Not later than thirty days from the first day of operating as a broker, the life insurance producer shall notify the commissioner that the life insurance producer is acting as a broker [on a form prescribed by the commissioner,] and shall pay a fee in the amount provided by section 431:7-101. [Notification shall include an] The notification shall only require the following information:

(1) The name and address of the life insurance producer;

(2) The life insurance producer's Hawaii producer license number;

(3) If applicable, the life insurance producer's resident license of the life insurance producer's home state;

(4) The date of the producer's initial licensing as a resident life insurance producer in this state or the life insurance producer's home state;

(5) A statement that the life insurance producer has begun operating as a life settlement broker and the date of first operating as a life settlement broker, or a statement that the life insurance producer intends to operate as a life settlement broker; and

(6) An acknowledgment by the life insurance producer that the life insurance producer will operate as a broker in accordance with this chapter."

SECTION 3. Section 431E-4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The commissioner may suspend, revoke, or refuse to renew the license of any licensee if the commissioner finds that:

(1) There was any material misrepresentation in the application for the license;

(2) The licensee or any officer, partner, member, or director has been guilty of fraudulent or dishonest practices, is subject to a final administrative action, or is otherwise shown to be untrustworthy or incompetent to act as a licensee;

(3) The provider demonstrates a pattern of unreasonably withholding payments to policy owners;

(4) The licensee no longer meets the requirements for initial licensure;

(5) The licensee or any officer, partner, member, or director has been convicted of a felony, or of any misdemeanor of which criminal fraud is an element; or the licensee has pleaded guilty or nolo contendere with respect to any felony or any misdemeanor of which criminal fraud or moral turpitude is an element, regardless of whether a judgment of conviction has been entered by the court;

(6) The provider has entered into any life settlement contract using a form that has not been approved pursuant to this chapter;

(7) The provider has failed to honor contractual obligations set out in a life settlement contract;

(8) The provider has assigned, transferred, or pledged a settled policy to a person other than a provider licensed in this State, a purchaser, an accredited investor or qualified institutional buyer as defined respectively in Rule 501 of Regulation D or Rule 144A of the federal Securities Act of 1933, as amended, a financing entity, a special purpose entity, or a related provider trust; or

(9) The licensee or any officer, partner, member, or key management personnel has violated this chapter."

SECTION 4. Section 431E-6, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) For any policy settled within five years of policy issuance, each provider shall file with the commissioner on or before March 1 of each year an annual statement containing the information as the commissioner may prescribe by rule. In addition to any other requirements, the annual statement shall[:

(1) Specify] specify the total number, aggregate face amount, and life settlement proceeds of policies settled during the immediately preceding calendar year, together with a breakdown of the information by policy issue year[; and

(2) Include the names of the insurance companies whose policies have been settled and the brokers that have settled said policies].

The information shall be limited to only those transactions where the [insured] owner is a resident of this [State] state and shall not include individual transaction data regarding the business of life settlements or information that there is a reasonable basis to believe could be used to identify the owner or the insured.

Every provider that wilfully fails to file an annual statement as required in this section, or wilfully fails to reply within thirty days to a written inquiry by the commissioner in connection therewith, shall, in addition to other penalties provided by this chapter, be subject, upon due notice and opportunity to be heard, to a penalty of up to $250 per day of delay, not to exceed $25,000 in the aggregate, for each such failure."

SECTION 5. Section 431E-21, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) No person or trust shall:

(1) Directly or indirectly market, advertise, or solicit[, or otherwise promote] the purchase of a new policy for the sole purpose of [or with an emphasis on] settling the policy; or

(2) Use the words ["free", "no cost",] "free," "no cost," or words of similar import in the marketing, advertising, soliciting, or otherwise promoting of the purchase of a policy."

SECTION 6. Section 431E-31, Hawaii Revised Statutes, is amended to read as follows:

"[[]431E-31[]] Disclosures to owners. (a) The provider or broker shall provide in writing, in a separate document that is signed by the owner [and provider], the following information to the owner no later than the date [the life settlement contract is signed by all parties:] of application for a life settlement contract:

(1) The fact that possible alternatives to life settlement contracts exist, including [but not limited to] accelerated benefits offered by the issuer of the policy;

(2) The fact that some or all of the proceeds of a life settlement contract may be taxable and that assistance should be sought from a professional tax advisor;

(3) The fact that the proceeds from a life settlement contract could be subject to the claims of creditors;

(4) The fact that receipt of proceeds from a life settlement contract may adversely affect the recipients' eligibility for public assistance or other government benefits or entitlements and that advice should be obtained from the appropriate agencies;

(5) The fact that the owner has a right to terminate a life settlement contract within fifteen days of the date it is executed by all parties and the owner has received the disclosures contained herein. Rescission, if exercised by the owner, is effective only if both notice of the rescission is given, and the owner repays all proceeds and any premiums, loans, and loan interest paid on account of the provider within the rescission period. If the insured dies during the rescission period, the contract shall be deemed to have been rescinded subject to repayment by the owner or the owner's estate of all proceeds and any premiums, loans, and loan interest to the provider;

(6) The fact that proceeds will be sent to the owner within three business days after the provider has received the insurer or group administrator's acknowledgment that ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated in accordance with the terms of the life settlement contract;

(7) The fact that entering into a life settlement contract may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the policy or certificate, to be forfeited by the owner and that assistance should be sought from a professional financial advisor;

[(8) The amount and method of calculating the compensation paid or to be paid to the broker, or any other person acting for the owner in connection with the transaction, wherein the term compensation includes anything of value paid or given;

(9)] (8) The date by which the funds will be available to the owner and the transmitter of the funds;

[(10)] (9) The fact that the commissioner shall require delivery of a Buyer's Guide or a similar consumer advisory package in the form prescribed by the commissioner to owners during the solicitation process;

[(11)] (10) The following language:

"All medical, financial or personal information solicited or obtained by a provider or broker about an insured, including the insured's identity or the identity of family members, a spouse or a significant other may be disclosed as necessary to effect the life settlement contract between the owner and provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share information every two years.";

[(12)] (11) The fact that the commissioner shall require providers and brokers to print separate signed fraud warnings on their applications and on their life settlement contracts as follows:

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

[(13)] (12) The fact that the owner may be contacted by either the provider or broker or its authorized representative for the purpose of determining the owner's health status or to verify the owner's address;

[(14)] (13) The affiliation, if any, between the provider and the issuer of the policy to be settled;

[(15)] (14) That a broker represents exclusively the owner, and not the insurer or the provider or any other person, and owes a fiduciary duty to the owner, including a duty to act according to the owner's instructions and in the best interest of the owner;

[(16)] (15) The name, address, and telephone number of the provider;

[(17)] (16) The name, business address, and telephone number of the independent third party escrow agent, and the fact that the owner may inspect or receive copies of the relevant escrow or trust agreements or documents; and

[(18)] (17) The fact that a change of ownership could in the future limit the insured's ability to purchase future insurance on the insured's life because there is a limit to how much coverage insurers will issue on one life.

(b) The written disclosures shall be conspicuously displayed in any life settlement contract furnished to the owner by a provider, including any affiliations or contractual arrangements between the provider and the broker.

(c) A broker shall provide the owner and the provider with at least the following disclosures no later than the date the life settlement contract is signed by all parties. The disclosures shall be conspicuously displayed in the life settlement contract or in a separate document signed by the owner and provide the following information:

(1) The name, business address, and telephone number of the broker;

(2) A full, complete, and accurate description of all the offers, counter-offers, acceptances, and rejections relating to the proposed life settlement contract;

(3) A written disclosure of any affiliations or contractual arrangements between the broker and any person making an offer in connection with the proposed life settlement contract;

[(4) The name of each broker who receives compensation and the amount of compensation received by that broker, which compensation includes anything of value paid or given to the broker in connection with the life settlement contract;

(5)] (4) A complete reconciliation of the gross offer or bid by the provider to the net amount of proceeds or value to be received by the owner. For the purpose of this paragraph, "gross offer" or "bid" means the total amount or value offered by the provider for the purchase of one or more life insurance policies, inclusive of commissions and fees; and

[(6)] (5) The fact that the failure to provide the disclosures or rights described in this section shall be deemed an unfair trade practice under section 480-2."

SECTION 7. Section 431E-32, Hawaii Revised Statutes, is amended to read as follows:

"[[]431E-32[]] Disclosure to insurer. (a) [Without limiting the ability of an insurer from assessing the insurability of a policy applicant and determining whether or not to issue the policy, and in] In addition to other questions an insurance carrier may lawfully pose to a life insurance applicant, insurance carriers may inquire in the application for insurance whether the proposed owner intends to pay premiums with the assistance of financing from a lender that will use the policy as collateral to support the financing.

(b) If, as described in subsection (a)(3) of the definition of "life settlement contract" in section 431E-2, the premium finance loan provides funds that can be used for a purpose other than paying for the premiums, costs, and expenses associated with obtaining and maintaining the policy and loan, the application shall be rejected as a violation of the prohibited practices in section 431E-41.

(c) If the premium financing does not violate section 431E-41 in this manner, the insurance carrier[:] may not reject the life insurance application solely because the premiums will be financed, and the insurance carrier:

(1) May make disclosures to the applicant and the insured, either on the application or an amendment to the application to be completed no later than the delivery of the policy, including the following:

"If you have entered into a loan arrangement where the policy is used as collateral, and the policy does change ownership at some point in the future in satisfaction of the loan, the following may be true:

(1) A change of ownership could lead to a stranger owning an interest in the insured's life;

(2) A change of ownership could in the future limit your ability to purchase future insurance on the insured's life because there is a limit to how much coverage insurers will issue on one life;

(3) Should there be a change of ownership and you wish to obtain more insurance coverage on the insured's life in the future, the insured's higher issue age, a change in health status, and/or other factors may reduce the ability to obtain coverage and/or may result in significantly higher premiums; and

(4) You should consult a professional advisor, since a change in ownership in satisfaction of the loan may result in tax consequences to the owner, depending on the structure of the loan";

and

(2) May require certifications, such as the following, from the applicant [and/or] or the insured[:], or both:

"(1) I have not entered into any agreement or arrangement providing for the future sale of this life insurance policy;

(2) My loan arrangement for this policy provides funds sufficient to pay for some or all of the premiums, costs, and expenses associated with obtaining and maintaining my life insurance policy, but I have not entered into any agreement by which I am to receive consideration in exchange for procuring this policy; and

(3) The borrower has an insurable interest in the insured.".

(d) With respect to each policy issued by an insurance company, the insurance company shall send written notice to the owner of an individual life insurance policy, or a certificate holder under a group life insurance policy, where the insured person under the policy is age sixty or older or is known to be terminally ill or chronically ill, that a life settlement is an alternative transaction available to the owner at the time of each of the following:

(1) When a life insurance company receives from the owner a request to surrender, in whole or in part, an individual life insurance policy, or a certificate under a group life insurance policy;

(2) When a life insurance company receives from the owner a request to receive an accelerated death benefit under an individual life insurance policy, or a certificate under a group life insurance policy;

(3) When a life insurance company receives from the owner a request to collaterally assign an individual life insurance policy, or a certificate under a group life insurance policy as security for a loan;

(4) When a life insurance company sends to the owner a notice of lapse of an individual life insurance policy, or a certificate under a group life insurance policy; or

(5) At any other time that the commissioner may require by rule or regulation."

SECTION 8. Section 431E-41, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) It is unlawful for any person to:

(1) Enter into a life settlement contract if the person knows or reasonably should have known that the 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 the person knows or reasonably should have known that the intent was to avoid the notice requirements of this chapter;

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

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

(5) Enter into a premium finance agreement with any person or agency, or any person affiliated with the person or agency, pursuant to which the person shall receive any proceeds, fees, or other consideration, directly or indirectly, from the policy or owner of the policy or any other person with respect to the premium finance agreement or any life settlement contract or other transaction related to such policy that are in addition to the amounts required to pay the principal, interest, and service charges related to policy premiums pursuant to the premium finance agreement or subsequent sale of such agreement; provided that any payments, charges, fees or other amounts in addition to the amounts required to pay the principal, interest, and service charges related to policy premiums paid under the premium finance agreement shall be remitted to the original owner of the policy or to the owner's estate if the owner [is] not living at the time of the determination of the overpayment;]

(4) If providing premium financing, receive any proceeds, fees, or other consideration from the policy or owner of the policy that are in addition to the amounts required to pay principal, interest, and any reasonable costs or expenses incurred by the lender or borrower in connection with the premium finance agreement, except in the event of a default, unless either the default on the loan or transfer of the policy occurs pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this chapter;

[(6)] (5) With respect to any policy or life settlement contract and a broker, 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] the broker[;] unless the relationship is disclosed to the owner;

[(7)] (6) With respect to any policy or life settlement contract and a provider, 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 or the financing entity or related provider trust that is involved in such life settlement contract[;] unless the relationship is disclosed to the owner;

[(8)] (7) With respect to a provider, enter into a life settlement contract unless the life settlement contract promotional, advertising, and marketing materials, as may be prescribed by rule, 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 that the insurance is free for any period of time shall be considered a violation of this chapter;

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

[(10)] (9) Knowingly and intentionally interfere with the enforcement of the provisions of this chapter or investigations of suspected or actual violations of this chapter; [and]

[(11)] (10) With respect to a person in the business of life settlements, knowingly or intentionally permit any person convicted of a felony involving dishonesty or breach of trust to participate in the business of life settlements[.]; and

(11) If an insurer, to:

(A) Prohibit, restrict, limit, or impair a life insurance producer from lawfully negotiating a life settlement contract on behalf of an owner, aiding and assisting an owner with a life settlement contract, or otherwise participating in a life settlement transaction under this chapter;

(B) Engage in or permit any discrimination between individuals of the same class, same policy amount, and equal expectation of life in the rates charged for any life insurance policy or annuity contract based upon an individual's having entered into a life settlement contract or being insured under a settled policy;

(C) Make any false or misleading statement as to the business of life settlements or financing premiums due for a policy or to any owner or insured for the purpose of inducing or tending to induce the owner or insured not to enter into a life settlement contract; or

(D) Engage in any transaction, act, practice or course of business or dealing which restricts, limits, or impairs in any way the lawful transfer of ownership, change of beneficiary, or assignment of a policy."

SECTION 9. Section 431E-42, Hawaii Revised Statutes, is amended to read as follows:

"[[]431E-42[]] Fraudulent life settlement acts prohibited. It is a violation of this chapter for any person, provider, broker, or any other party related to the business of life settlements, to commit a fraudulent life settlement act.

For the purposes of this section, "fraudulent life settlement act" includes:

(1) Acts or omissions committed by any person who, knowingly and with intent to defraud, for the purpose of depriving another of property or for pecuniary gain, commits, or permits its employees or agents to engage in acts including [but not limited to]:

(A) Presenting, causing to be presented, or preparing with knowledge and belief that it will be presented to or by a provider, premium finance lender, broker, insurer, insurance producer, or any other person, false material information, or concealing material information, as part of, in support of, or concerning a fact material to one or more of the following:

(i) An application for the issuance of a policy or life settlement contract;

(ii) The underwriting of a policy or life settlement contract;

(iii) A claim for payment or benefit pursuant to a policy or life settlement contract;

(iv) Premiums paid on a policy;

(v) Payments and changes in ownership or beneficiary made in accordance with the terms of a policy or life settlement contract;

(vi) The reinstatement or conversion of a policy;

(vii) In the solicitation, offer to enter into, or effectuation of a policy or life settlement contract;

(viii) The issuance of written evidence of a policy or life settlement contract;

(ix) Any application for or the existence of or any payments related to a loan secured directly or indirectly by any interest in a policy; or

(x) [Entering into any practice or plan that involves stranger-originated] Stranger-originated life insurance;

[(B) Failing to disclose to the insurer, where the insurer requests such disclosure, that the prospective insured has undergone a life expectancy evaluation by any person or entity other than the insurer or its authorized representatives in connection with the issuance of the policy;]

or

[(C)] (B) Employing any device, scheme, or artifice to defraud in the business of life settlements; [or

(D) In the solicitation, application, or issuance of a policy, employing any device, scheme, or artifice in violation of state insurable interest laws;]

(2) In the furtherance of a fraud or to prevent the detection of a fraud, any person commits or permits its employees or its agents to:

(A) Remove, conceal, alter, destroy, or sequester from the commissioner the assets or records of a licensee or other person engaged in the business of life settlements;

(B) Misrepresent or conceal the financial condition of a licensee, financing entity, insurer, or other person;

(C) Transact the business of life settlements in violation of laws requiring a license, certificate of authority, or other legal authority for the transaction of the business of life settlements;

(D) File with the commissioner or the chief insurance regulatory official of another jurisdiction a document containing false information or otherwise concealing information about a material fact from the commissioner;

(E) Engage in embezzlement, theft, misappropriation, or conversion of moneys, funds, premiums, credits, or other property of a provider, insurer, insured, owner, insurance, policy owner, or any other person engaged in the business of life settlements or insurance;

(F) Knowingly and with intent to defraud, enter into, broker, or otherwise deal in a life settlement contract, the subject of which is a policy that was obtained by presenting false information concerning any fact material to the policy or by concealing, for the purpose of misleading another, information concerning any fact material to the policy, where the owner or the owner's agent intended to defraud the policy's issuer;

(G) Attempt to commit, assist, aid, or abet in the commission of, or conspire to commit the acts or omissions specified in this definition; or

(H) Misrepresent the state of residence of an owner to be a state or jurisdiction that does not have a law substantially similar to this chapter for the purpose of evading or avoiding the provisions of this chapter."

SECTION 10. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 12. This Act shall take effect on January 1, 2020.