                                 CODE OF VIRGINIA

FRAUD PREVENTION AND CONTROL (§ 38.2-6011)

A. A person shall not commit a fraudulent viatical settlement act. A person
shall not knowingly or intentionally interfere with the enforcement of the
provisions of this chapter or Article 6.1 (&#xA7; 38.2-1865.1 et seq.) of
Chapter 18 of this title or investigations of suspected or actual violations of
this chapter or Article 6.1 (&#xA7; 38.2-1865.1 et seq.) of Chapter 18 of this
title. A person in the business of viatical 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 viatical settlements.

B. Viatical settlement contracts and applications for viatical settlements,
regardless of the form of transmission, shall contain the following statement or
a substantially similar statement: &#8220;Any person who knowingly presents
false information in an application for insurance or viatical settlement
contract may be guilty of a crime and subject to prosecution.&#8221; The lack of
the required statement does not constitute a defense in any prosecution for a
fraudulent viatical settlement act.

C. Any person engaged in the business of viatical settlements having knowledge
or a reasonable belief that a fraudulent viatical settlement act is being, will
be, or has been committed shall provide to the Commission the information
required by, and in a manner prescribed by, the Commission. Any other person
having knowledge or a reasonable belief that a fraudulent viatical settlement
act is being, will be, or has been committed may provide to the Commission the
information required by, and in a manner prescribed by, the Commission.

D. 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. Prevent or prohibit a person from disclosing voluntarily information
   concerning viatical settlement fraud to a law enforcement or regulatory agency
   other than the insurance department; or

   3. Limit the powers granted elsewhere by the laws of this Commonwealth to the
   Commission or an insurance fraud unit to investigate and examine possible
   violations of law and to take appropriate action against wrongdoers.

E. 1. A viatical settlement provider shall within 60 days of licensure and
annually thereafter by March 1 of each year certify to the Commission
implementation of anti-fraud initiatives reasonably calculated to detect,
prosecute, and prevent fraudulent viatical settlement acts.

   2. A viatical settlement broker shall within 60 days of licensure affirm to
   the Commission implementation of fraud initiatives reasonably calculated to
   detect, prosecute, and prevent fraudulent viatical settlement acts. Upon
   renewal of such license, a viatical settlement broker shall affirm to the
   Commission that such fraud initiatives remain in place. A viatical settlement
   broker shall make its anti-fraud plan available to the Commission upon
   request.

   3. Anti-fraud initiatives shall include:
   				a. Fraud investigators, who may be viatical settlement providers or
   viatical settlement broker employees or independent contractors; and
   				b. An anti-fraud plan that includes all of the following:

      1. A description of the procedures for detecting and investigating possible
      fraudulent viatical settlement acts and procedures for resolving material
      inconsistencies between medical records and insurance applications;

      2. A description of the procedures for reporting possible fraudulent
      viatical settlement acts to the Commission;

      3. A description of the plan for anti-fraud education and training of
      underwriters and other personnel; and

      4. A description or chart outlining the organizational arrangement of the
      anti-fraud personnel who are responsible for the investigation and reporting
      of possible fraudulent viatical settlement acts and investigating unresolved
      material inconsistencies between medical records and insurance applications.

F. Anti-fraud plans submitted to or obtained by the Commission and in the
control or possession of the Commission shall be privileged and confidential,
shall not be subject to inspection or review by the general public, shall not be
subject to subpoena, and shall not be subject to discovery or admissible in
evidence in any private civil or criminal action. However, the Commission is
authorized to use the anti-fraud plans in the furtherance of any regulatory or
legal action brought as a part of the Commission&#8217;s duties.

HISTORY: 2003, c. 717; 2023, c. 577.