No. 37598 (5-year Review): Rule R590-222. Life Settlements

DAR File No.: 37598
Filed: 05/07/2013 10:01:56 AM

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Subsection 31A-2-201(3) authorizes the insurance commissioner to write rules to implement the provisions of the insurance code, in this case, specific requirements found in Subsection 31A-36-119(3). These requirements specify that the department may adopt rules to establish licensing requirements and standards for life settlement providers and producers. The rule implements procedures for: licensure of life settlement providers and producers; providers and reports; disclosures; advertising; reporting of fraud; prohibited practices; standards for life settlement payments; and procedures to request the verification of coverage.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

During the past five years, three comment periods were provided for proposed changes made to this rule. One comment was received regarding the change under DAR No. 32579. The comment was from the Life Insurance Settlement Association. They were opposed to the increase in the bond threshold from $50,000 to $250,000, which was from the National Association of Insurance Commissioner's Model rule that was approved by the insurance industry in 2009. The Association expressed concern that information the department was collecting could be accessed with a GRAMA request. The language they were concerned with was not new language plus it was proprietary and non-public so would not be available via a GRAMA request.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

The rule provides the requirements and explanations regarding the business of life settlements, including, licensing, annual reports, payments, disclosures, reasonable payments, verification of coverage, advertising, fraud reporting, prohibited practices and form filing. All are necessary for the proper regulation of this product in the marketplace to protect the consumer. Therefore, this rule should be continued.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Authorized by:

Todd Kiser, Commissioner

Effective:

05/07/2013

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