                                 CODE OF VIRGINIA

DEFINITIONS (§ 38.2-6000)

As used in this chapter:
		&#8220;Advertising&#8221; 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 published, disseminated,
circulated or placed before the public, directly or indirectly, for the purpose
of creating an interest in or inducing a person to sell a life insurance policy
pursuant to a viatical settlement contract.
		&#8220;Business of viatical settlements&#8221; means an activity involved in,
but not limited to, the offering, solicitation, negotiation, procurement,
effectuation, purchasing, investing, financing, monitoring, tracking,
underwriting, selling, transferring, assigning, pledging, or hypothecating in
any other manner, of viatical settlement contracts or purchase agreements.
		&#8220;Chronically ill&#8221; means (i) being unable to perform at least two
activities of daily living, which shall include eating, toileting, transferring,
bathing, dressing or continence, (ii) requiring substantial supervision by
another person to protect the individual from threats to health and safety due
to severe cognitive impairment, or (iii) having a level of disability similar to
that described in clause (i) as determined by the federal Secretary of Health
and Human Resources.
		&#8220;Financing entity&#8221; means an underwriter, placement agent, lender,
purchaser of securities, purchaser of a policy or certificate from a viatical
settlement provider, credit enhancer, or any entity that has a direct ownership
in a policy or certificate that is the subject of a viatical settlement
contract, but whose principal activity related to the transaction is providing
funds to effect the viatical settlement or purchase of one or more viaticated
policies and who has an agreement in writing with one or more licensed viatical
settlement providers to finance the acquisition of viatical settlement
contracts. Financing entity does not include a non-accredited investor or
viatical settlement purchaser.
		&#8220;Fraudulent viatical settlement act&#8221; includes:

1. Acts or omissions committed by any person who, knowingly or with intent to
defraud, for the purpose of depriving another of property or for pecuniary gain,
commits or permits its employees or its agents to engage in acts including:
			a. Presenting, causing to be presented or preparing with knowledge or belief
that it will be presented to or by a viatical settlement provider, viatical
settlement broker, viatical settlement purchaser, financing entity, 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 viatical settlement contract or insurance policy; (ii) the underwriting of a
viatical settlement contract or insurance policy; (iii) a claim for payment or
benefit pursuant to a viatical settlement contract or insurance policy; (iv)
premiums paid on an insurance policy; (v) payments and changes in ownership or
beneficiary made in accordance with the terms of a viatical settlement contract,
or insurance policy; (vi) the reinstatement or conversion of an insurance
policy; (vii) in the solicitation, offer, effectuation or sale of a viatical
settlement contract or insurance policy; (viii) the issuance of written evidence
of a viatical settlement contract or insurance policy; or (ix) a financing
transaction;
			b. Employing any device, scheme, or artifice to defraud related to viaticated
policies;

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: (i) remove, conceal,
alter, destroy, or sequester from the Commission the assets or records of a
licensee or other person engaged in the business of viatical settlements; (ii)
misrepresent or conceal the financial condition of a licensee, financing entity,
insurer, or other person; (iii) transact the business of viatical settlements in
violation of laws requiring a license, certificate of authority, or other legal
authority for the transaction of the business of viatical settlements; or (iv)
file with the Commission or the chief insurance regulatory official of another
jurisdiction a document containing false information or otherwise conceals
information about a material fact from the Commission;

3. Embezzlement, theft, misappropriation or conversion of moneys, funds,
premiums, credits, or other property of a viatical settlement provider, insurer,
insured, viator, insurance policyowner, or any other person engaged in the
business of viatical settlements or insurance;

4. Recklessly entering into, brokering, or otherwise dealing in a viatical
settlement contract, the subject of which is a life insurance 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 viator or the
viator&#8217;s agent intended to defraud the policy&#8217;s issuer.
&#8220;Recklessly&#8221; means engaging in the conduct in conscious and clearly
unjustifiable disregard of a substantial likelihood of the existence of the
relevant facts or risks, such disregard involving a gross deviation from
acceptable standards of conduct; or

5. Attempting to commit, assisting, aiding or abetting in the commission of, or
conspiracy to commit the acts or omissions specified in this subsection.
			&#8220;Licensee under this chapter&#8221; means a person licensed by the
Commission as a viatical settlement provider or viatical settlement broker.
			&#8220;NAIC&#8221; means National Association of Insurance Commissioners.
			&#8220;Policy&#8221; means an individual or group policy, group certificate,
contract or arrangement of life insurance affecting the rights of a resident of
this Commonwealth or bearing a reasonable relation to this Commonwealth,
regardless of whether delivered or issued for delivery in this Commonwealth.
			&#8220;Related provider trust&#8221; means a titling trust or other trust
established by a licensed viatical settlement provider or a financing entity for
the sole purpose of holding the ownership or beneficial interest in purchased
policies in connection with a financing transaction. The trust shall have a
written agreement with the licensed viatical settlement provider under which the
licensed viatical settlement provider is responsible for ensuring compliance
with all statutory and regulatory requirements and under which the trust agrees
to make all records and files related to viatical settlement transactions
available to the Commission as if those records and files were maintained
directly by the licensed viatical settlement provider.
			&#8220;Special purpose entity&#8221; means a corporation, partnership, trust,
limited liability company, or other similar entity formed solely to provide
either directly or indirectly access to institutional capital markets for a
financing entity or licensed viatical settlement provider.
			&#8220;Terminally ill&#8221; means having an illness or sickness that can
reasonably be expected to result in death in 24 months or less.
			&#8220;Viatical settlement broker&#8221; means a person that on behalf of
another and for a fee, commission or other valuable consideration introduces
viators to viatical settlement providers, or offers or attempts to negotiate
viatical settlement contracts between a viator and one or more viatical
settlement providers. A viatical settlement broker may act as agent for a
viatical settlement provider or on behalf of the viator, provided that a
viatical settlement broker shall not be deemed to act exclusively for the viator
unless, pursuant to written agreement between the parties, the broker agrees (i)
to disclose fully all interests in the viatical settlement contract and
relationships with the viatical settlement provider, including its affiliates
and appointed or contracted agents, and (ii) that compensation for services as a
viatical settlement broker shall be paid directly and only by the viator. The
term does not include an attorney, certified public accountant, or a 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 or viatical settlement purchaser.
			&#8220;Viatical settlement contract&#8221; means a written agreement
establishing the terms under which compensation or anything of value will be
paid, which compensation or value is less than the expected death benefit of the
insurance policy or certificate, in return for the viator&#8217;s assignment,
transfer, sale, devise or bequest of the death benefit or ownership of any
portion of the insurance policy or certificate of insurance. A viatical
settlement contract also includes a contract for a loan or other financing
transaction with a viator secured primarily by an individual or group life
insurance policy, other than a loan by a life insurance company pursuant to the
terms of the life insurance contract, or a loan secured by the cash value of a
policy. A viatical settlement contract includes an agreement with a viator to
transfer ownership or change the beneficiary designation at a later date
regardless of the date that compensation is paid to the viator. &#8220;Viatical
settlement contracts&#8221; do not include accelerated benefits provisions
contained in life insurance policies, whether issued with the original policy or
as a rider, according to the regulations promulgated by the Commission.
			&#8220;Viatical settlement provider&#8221; means a person, other than a
viator, that enters into or effectuates a viatical settlement contract. Viatical
settlement provider does not include: (i) a bank, savings bank, savings and loan
association, credit union, or other licensed lending institution that takes an
assignment of a life insurance policy as collateral for a loan; (ii) the issuer
of a life insurance policy providing accelerated benefits under &#xA7;
38.2-3115.1 and pursuant to the contract; (iii) an authorized or eligible
insurer that provides stop loss coverage to a viatical settlement provider,
viatical settlement purchaser, financing entity, special purpose entity or
related provider trust; (iv) a natural person who enters into or effectuates no
more than one agreement in a calendar year for the transfer of life insurance
policies for any value less than the expected death benefit; (v) a financing
entity; (vi) a special purpose entity; (vii) a related provider trust; (viii) a
viatical settlement purchaser; or (ix) 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, and who purchases a
viaticated policy from a viatical settlement provider and does not communicate
with the viator or insured who is a resident of this Commonwealth except through
a licensee under this chapter.
			&#8220;Viatical settlement purchaser&#8221; means a person who gives a sum of
money as consideration for a life insurance policy or an interest in the death
benefits of a life insurance policy, or a person who owns or acquires or is
entitled to a beneficial interest in a trust that owns a viatical settlement
contract or is the beneficiary of a life insurance policy that has been or will
be the subject of a viatical settlement contract, for the purpose of deriving an
economic benefit. Viatical settlement purchaser does not include (i) a licensee
under this chapter; (ii) 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; (iii) a financing entity; (iv) a special
purpose entity; or (v) a related provider trust.
			&#8220;Viaticated policy&#8221; means a life insurance policy or certificate
that has been acquired by a viatical settlement provider pursuant to a viatical
settlement contract.
			&#8220;Viator&#8221; means the owner of a life insurance policy or a
certificate holder under a group policy who enters or seeks to enter into a
viatical settlement contract. For the purposes of this chapter and the
application of Article 6.1 (&#xA7; 38.2-1865.1 et seq.) of Chapter 18 of this
title, a viator shall not be limited to an owner of a life insurance policy or a
certificate holder under a group policy insuring the life of an individual with
a terminal or chronic illness except where specifically addressed. Viator does
not include (i) a licensee under this chapter; (ii) 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; (iii) a
financing entity; (iv) a special purpose entity; or (v) a related provider
trust.

HISTORY: 1997, c. 814, § 38.2-5700; 2003, c. 717.