(1) (a) No person shall act on behalf of a viator or otherwise negotiate, as defined in section 10-2-103 (7.9), viatical settlement contracts between a viator and one or more viatical settlement providers unless such person is a life insurance producer and has been licensed as a resident producer with a life line of authority in his or her home state for at least one year.
(b) Not later than thirty days after the first day of negotiating a viatical settlement on behalf of a viator, the life insurance producer shall notify the commissioner of the activity on a form prescribed by the commissioner, and shall pay an applicable fee to be determined by the commissioner by rule. Notification shall include an acknowledgment by the life insurance producer that he or she will operate in accordance with this part 6.
(c) Irrespective of the manner in which the life insurance producer is compensated, a life insurance producer is deemed to represent only the viator, and the insurer that issued the policy being viaticated shall not be responsible for any act or omission of a life insurance producer or viatical settlement provider arising out of or in connection with the viatical settlement transaction, unless the insurer receives compensation from the viatical settlement provider or life insurance producer for the viatical settlement contract.
(d) Notwithstanding paragraph (a) of this subsection (1), a person licensed as an attorney, certified public accountant, or financial planner accredited by a nationally recognized accreditation agency, who is retained to represent the viator and whose compensation is not paid directly or indirectly by the viatical settlement provider may negotiate viatical settlement contracts without having to obtain a license as a life insurance producer.
(2) (a) No person may operate as a viatical settlement provider without first obtaining a viatical settlement provider license from the commissioner.
(b) Application for a viatical settlement provider license shall be made to the commissioner on a form prescribed by the commissioner, and an application shall be accompanied by a fee to be determined by the commissioner by rule.
(c) A license may be renewed from year to year, on the anniversary date of initial issuance, upon payment of an annual renewal fee as determined by the commissioner by rule. Failure to pay the fee by the renewal date shall result in expiration of the license.
(d) The applicant for a viatical settlement provider license shall provide information on forms prescribed by the commissioner. The commissioner may, at any time, require the applicant to fully disclose the identity of all stockholders, partners, officers, members, and employees, except stockholders owning fewer than five percent of the shares of an applicant whose shares are publicly traded, and the commissioner may refuse to issue a license in the name of a legal entity if not satisfied that any officer, employee, stockholder, partner, or member of the entity who may materially influence the entity's conduct meets the standards of this article.
(e) A license issued to a legal entity authorizes all partners, officers, members, and designated employees to act as viatical settlement providers, as applicable, under the license, if all of those persons are named in the application and any supplements to the application.
(f) Upon the filing of an application and the payment of the license fee, the commissioner shall make an investigation of each applicant and issue a license if the commissioner finds that the applicant:
(I) Has provided a detailed plan of operation;
(II) Is competent and trustworthy and intends to act in good faith in the capacity involved by the license for which an application was submitted;
(III) Has a good business reputation and has had experience, training, or education so as to be qualified in the business for the license for which an application was submitted;
(IV) If a legal entity, provides a certificate of good standing from the state of its domicile; and
(V) Has provided an anti-fraud plan that meets the requirements of this part 6.
(g) The commissioner may not issue a license to a nonresident applicant unless a written designation of an agent for service of process is filed and maintained with the commissioner or unless the applicant has filed with the commissioner the applicant's written, irrevocable consent that any action against the applicant may be commenced against the applicant by service of process on the commissioner.
(h) A viatical settlement provider shall provide to the commissioner new or revised information about officers, stockholders who own ten percent or more of the provider's stock, and all partners, directors, members, and designated employees within thirty days after the change.
Source: L. 2005: Entire part added, p. 1298, � 1, effective January 1, 2006.
10-7-604. Licensure - refusal to issue - suspension - revocation - refusal to renew. (1) The commissioner shall refuse to issue, suspend, revoke, or refuse to renew the license of a viatical settlement provider if the commissioner finds after compliance with subsection (3) of this section that:
(a) There was any material misrepresentation in the application for the license;
(b) The licensee or any of its officers, partners, members, or key management personnel has been convicted of fraudulent or dishonest practices, is subject to a final administrative action, or is otherwise shown to be untrustworthy or incompetent;
(c) The licensee demonstrates a pattern of unreasonable payments to viators;
(d) The licensee or any of its officers, partners, members, or key management personnel has been found guilty of, or has pleaded guilty or nolo contendere to, any felony, or to a misdemeanor involving fraud or moral turpitude, regardless of whether a judgment or conviction has been entered by the court;
(e) The licensee has entered into any viatical settlement contract that has not been approved pursuant to this part 6;
(f) The licensee has failed to honor contractual obligations set out in a viatical settlement contract;
(g) The licensee no longer meets the requirements for initial licensure;
(h) The licensee has assigned, transferred, or pledged a viaticated policy to a person other than a viatical settlement provider licensed in this state; an accredited investor or qualified institutional buyer as defined, respectively, in regulation D, rule 501, 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
(i) The applicant or licensee or any of its officers, partners, members, or key management personnel, or any life insurance producer acting on behalf of the applicant or licensee, has violated this part 6.
(2) The commissioner may suspend, revoke, or refuse to renew the license of a life insurance producer if the commissioner finds that such life insurance producer has violated this part 6.
(3) If the commissioner denies a license application or suspends, revokes, or refuses to renew the license of a viatical settlement provider, or suspends, revokes, or refuses to renew the license of a life insurance producer, the commissioner shall conduct a hearing in accordance with the State Administrative Procedure Act, article 4 of title 24, C.R.S., and may use a hearing officer pursuant to section 10-1-127.
Source: L. 2005: Entire part added, p. 1300, � 1, effective January 1, 2006.
Cross references: For regulation D, rule 501, see 17 CFR 230.501; for rule 144A, see 17 CFR 230.144A.