Determining governing law when multiple owners

(a) If there is more than one owner on a single policy, and the owners are residents of different states, the life settlement contract shall be 1029 33-59-13 governed by the law of the state in which the owner having the largest percentage ownership resides or, if the owners hold equal ownership, the state of residence of one owner agreed upon in writing by all of the owners. The law of the state of the insured shall govern in the event that equal owners fail to agree in writing upon a state of residence for jurisdictional purposes. (b) A provider from this state who enters into a life settlement contract with an owner who is a resident of another state that has enacted statutes or adopted regulations governing life settlement contracts shall be governed in the effectuation of that life settlement contract by the statutes and regulations of the owner’s state of residence. If the state in which the owner is a resident has not enacted statutes or regulations governing life settlement contracts, the provider shall give the owner notice that neither state regulates the transaction upon which he or she is entering. For transactions in those states, however, the provider is to maintain all records required if the transactions were executed in the state of residence. The forms used in those states need not be approved by the Commissioner. (c) If there is a conflict in the laws that apply to an owner and a purchaser in any individual transaction, the laws of the state that apply to the owner shall take precedence and the provider shall comply with those laws. History. — Code 1981, § 33-59-12, enacted by Ga. L. 2009, p. 370, § 1/SB 61; Ga. L. 2019, p. 533, § 1-24/HB 99. The 2019 amendment, effective July 1, 2019, deleted former subsection (a), which read: ‘‘The Commissioner may promulgate regulations implementing this chapter and regulating the activities and relationships of providers, life settlement brokers, insurers, and their agents subject to statutory limitations on administrative rule making.’’; and redesignated former paragraphs (b)(1) through (b)(3) as present subsections (a) through (c), respectively. Editor’s notes. — Ga. L. 2009, p. 370, § 1/SB 61, effective July 1, 2009, redesignated former Code Section 33-59-12 as present Code Section 33-59-14. 33-59-13. Unlawful activities deemed fraudulent life settlement act. (a) It shall be unlawful for any person to: (1) Enter into a life settlement contract if such person knows or reasonably should have known that the life insurance 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 such person knows or reasonably should have known that the intent was to avoid the notice requirements of this Code section; 1030 33-59-13 (3) Engage in any fraudulent act or practice in connection with any transaction relating to any settlement involving an owner who is a resident of this state; (4) Issue, solicit, market, or otherwise promote the purchase of an insurance 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 such person or agency, pursuant to which such 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 settlement contract or other transaction related to such policy that are in addition to the amounts required to pay the principal, interest, service charges, and any cost or expense incurred by the lender or borrower in connection with the premium finance agreement or subsequent sale of such agreement; provided, further, that any payments, charges, fees, or other amounts in addition to the amounts required to pay the principal, interest, service charges, and any cost or expense incurred by the lender or borrower in connection with the premium finance agreement shall be remitted to the original owner of the policy or to his or her estate if he or she is not living at the time of the determination of the overpayment; (6) With respect to any settlement contract or insurance policy and a life settlement 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 life settlement broker unless such relationship is disclosed to the owner in accordance with paragraph (3) of subsection (c) of Code Section 33-59-9; (7) With respect to any life settlement contract or insurance policy and a provider, knowingly enter into a life settlement contract with an owner, if, in connection with such life settlement contract, any thing of value will be paid to a life settlement 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 settlement contract unless such relationship is disclosed to the owner in accordance with paragraph (3) of subsection (c) of Code Section 33-59-9; (8) With respect to a provider, enter into a life settlement contract unless the life settlement promotional, advertisement, and marketing materials, as may be prescribed by rule or regulation, have been filed with the Commissioner. In no event shall any marketing materials expressly reference that the insurance is ‘‘free’’ for any 1031 33-59-14 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; or (9) With respect to any life insurance producer, insurance company, life settlement broker, or provider, make any statement or representation to the applicant or policyholder in connection with the sale or financing of a life insurance 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. (b) A violation of this Code section shall be deemed a fraudulent life settlement act. History. — Code 1981, § 33-59-13, enacted by Ga. L. 2009, p. 370, § 1/SB 61. Editor’s notes. — Ga. L. 2009, p. 370, § 1/SB 61, effective July 1, 2009, redesignated former Code Section 33-59-13 as present Code Section 33-59-15. 33-59-14. Violations; required statement; reporting of fraudulent acts to the Commissioner; immunity for providing information concerning fraudulent acts; confidentiality of documents and evidence; mandatory adoption of antifraud initiatives by providers. (a)(1) It shall be illegal for a person to commit a fraudulent life settlement act. (2) A person shall not knowingly and intentionally interfere with the enforcement of the provisions of this chapter or investigations of suspected or actual violations of this chapter. (3) A person in the business of life 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 life settlements. (b)(1) Life settlement contracts and applications for life settlement contracts, 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 life settlement contract is guilty of a crime and may be subject to fines or confinement in prison.’’ (2) The lack of a statement as required in paragraph (1) of this subsection does not constitute a defense in any prosecution for a fraudulent life settlement act. (c)(1) Any person engaged in the business of life settlements having knowledge or a reasonable belief that a fraudulent life settlement act 1032 33-59-14 is being, will be, or has been committed shall provide to the Commissioner the information required by, and in a manner prescribed by, the Commissioner. (2) Any other person having knowledge or a reasonable belief that a fraudulent life 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, the Commissioner. (d)(1) No civil liability shall be imposed on and no cause of action shall arise from a person’s furnishing information concerning suspected, anticipated, or completed fraudulent life settlement acts or suspected or completed fraudulent insurance acts if the information is provided to or received from: (A) The Commissioner or the Commissioner’s employees, agents, or representatives; (B) Federal, state, or local law enforcement or regulatory officials or their employees, agents, or representatives; (C) A person involved in the prevention and detection of fraudulent life settlement acts or that person’s agents, employees, or representatives; (D) Any regulatory body or their employees, agents, or representatives overseeing life insurance or life settlements, securities, or investment fraud; (E) The life insurer that issued the life insurance policy covering the life of the insured; or (F) The licensee and any agents, employees, or representatives. (2) Paragraph (1) of this subsection shall not apply to statements made with actual malice. In an action brought against a person for filing a report or furnishing other information concerning a fraudulent life settlement act or a fraudulent insurance act, the party bringing the action shall plead specifically any allegation that paragraph (1) of this subsection does not apply because the person filing the report or furnishing the information did so with actual malice. (3) A person identified in paragraph (1) of this subsection shall be entitled to an award of attorney’s fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander, or any other relevant tort arising out of activities 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. 1033 33-59-14 (4) This subsection does not abrogate or modify common law or statutory privileges or immunities enjoyed by a person described in paragraph (1) of this subsection. (e)(1) The documents and evidence provided pursuant to subsection (d) of this Code section or obtained by the Commissioner in an investigation of suspected or actual fraudulent life settlement acts shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action. (2) Paragraph (1) of this subsection shall not prohibit release by the Commissioner of documents and evidence obtained in an investigation of suspected or actual fraudulent life settlement acts: (A) In administrative or judicial proceedings to enforce laws administered by the Commissioner; (B) To federal, state, or local law enforcement or regulatory agencies, to an organization established for the purpose of detecting and preventing fraudulent life settlement acts, or to the National Association of Insurance Commissioners; or (C) At the discretion of the Commissioner, to a person in the business of life settlements that is aggrieved by a fraudulent life settlement act. (3) Release of documents and evidence under paragraph (2) of this subsection does not abrogate or modify the privilege granted in paragraph (1) of this subsection. (f ) This chapter shall not: (1) Preempt the authority or relieve the duty of other law enforcement or regulatory agencies to investigate, examine, and prosecute suspected violations of law; (2) Preempt, supersede, or limit any provision of any state securities law or any rule, order, or notice issued thereunder; (3) Prevent or prohibit a person from disclosing voluntarily information concerning life settlement fraud to a law enforcement or regulatory agency other than the department; or (4) 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. (g)(1) Providers and life settlement brokers shall have in place antifraud initiatives reasonably calculated to detect, prosecute, and prevent fraudulent life settlement acts. At the discretion of the 1034 33-59-15 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 subsection. Antifraud initiatives shall include: (A) Fraud investigators, who may be provider or life settlement broker employees or independent contractors; and (B) An antifraud plan, which shall be submitted to the Commissioner. The antifraud plan shall include, but not be limited to: (i) A description of the procedures for detecting and investigating possible fraudulent life settlement acts and procedures for resolving material inconsistencies between medical records and insurance applications; (ii) A description of the procedures for reporting possible fraudulent life settlement acts to the Commissioner; (iii) A description of the plan for antifraud education and training of underwriters and other personnel; and (iv) A description or chart outlining the organizational arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent life settlement acts and investigating unresolved material inconsistencies between medical records and insurance applications. (2) Antifraud plans submitted to the Commissioner shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action. History. — Code 1981, § 33-59-12, enacted by Ga. L. 2005, p. 998, § 1/SB 217; Code 1981, § 33-59-14, as redesignated by Ga. L. 2009, p. 370, § 1/SB 61. Editor’s notes. — Ga. L. 2009, p. 370, § 1/SB 61, effective July 1, 2009, redesignated former Code Section 33-59-14 as present Code Section 33-59-17. 33-59-15. Remedies and penalties for violations; procedural issues.