Section 0780-01-71-.09 - DISCLOSURE(1) A disclosure document containing the disclosures required by the Life Settlements Act and this rule shall be provided before or concurrent with taking an application for a life settlement contract:(a) The disclosure document shall contain the following language: "All medical, financial, personal information solicited or obtained by a life settlement company or life settlement broker about an owner and insured, including the owner's and 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 between the owner and the life settlement 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 the funds for the purchase of this policy. You may be asked to renew your permission to share information every two years."(b) The information shall not be disclosed in any form to any person, unless disclosure: 1. Is requested by the commissioner or any other governmental officer or agency; or2. Is necessary to effect the life settlement between the owner and the life settlement provider, and the owner and insured have provided prior written consent to the disclosure; or3. Is a term of or condition to the transfer of a life policy by one life provider to another life settlement provider.(c) Notwithstanding any other provisions, for the purposes of complying with Paragraph (b) above, the use of this information by the life settlement provider or the life settlement broker or their authorized representatives in the following situations shall be deemed necessary to the completion of the life settlement contract or an acceptable term of or condition to the transfer of a life policy from one life settlement provider to another life settlement provider:1. To make contacts with the insured for the purpose of determining his or her health status;2. To detect fraud in accordance with the life settlement provider's or life settlement broker's anti-fraud plan;3. To effectuate institutional risk control within the life settlement provider or life settlement broker;4. To purchase stop loss coverage; or5. To permit a financing entity to finance the purchase of policies by a life settlement provider.(2) No later than the date on which the life settlement contract is signed by all parties, the life settlement provider shall provide the following disclosures displayed conspicuously in the life settlement contract or in a separate document signed by the owner and the life settlement provider or life settlement broker:(a) The name, address and telephone number of the life settlement provider;(b) The name, business address, and telephone number of any independent third party escrow agent involved in the transaction, the right of the owner to inspect or receive copies of the relevant escrow or trust agreements or documents;(c) If a life settlement broker is involved, the amount and method of calculating the broker's compensation. The term "compensation" includes anything of value paid or given to a life settlement broker for the placement of a policy.(d) If a life settlement broker is involved in the transaction, the broker shall disclose all settlement offers received by the broker for the owner's life policy.(3) Before or concurrent with taking an application for a life settlement contract and the date on which the life settlement contract is signed by all parties, the life settlement provider shall clearly provide in substance the following fraud warnings to the owner displayed conspicuously in the life settlement contract or in a separate document signed by the owner and the life settlement provider or life settlement broker: "It is a crime to knowingly provide false, incomplete or misleading information in an application for insurance or an application for a viatical or life settlement contract with an intent to defraud. Penalties include imprisonment, fines and denial of insurance benefits."
(4) If the life settlement provider transfers ownership or changes the beneficiary of the life policy, the provider shall communicate the change in ownership or beneficiary to the insured within twenty (20) days after the change.Tenn. Comp. R. & Regs. 0780-01-71-.09
Original rule filed February 7, 2003; effective April 23, 2003.Authority: T.C.A. §§ 56-50-105, 56-50-106, 56-50-108, 56-50-109, 56-50-110, 56-53-102, 56-53-104, and 5653-111.