760 IAC 1-61-4 Licensure of viatical settlement providers

Sec. 4. (a) No person shall act as a viatical settlement provider unless the person has first obtained a license from the commissioner. (b) An application for licensing as a viatical settlement provider must be submitted on an application form that may be obtained from the department of insurance at 311 West Washington Street, Suite 300, Indianapolis, Indiana 46204. The application form is adopted by reference. (c) A licensing fee in the amount of one thousand dollars ($1,000) shall accompany the completed application form. (d) The application for license as a viatical settlement provider shall furnish all of the applicable information as follows: (1) The name, address, and organizational structure of the applicant. (2) Certified copies of the applicant's organization documents, including, but not limited to: (A) articles of incorporation and any amendments thereto; and (B) a certificate of incorporation and any amendments thereto. (3) The identity of all of the following: (A) Stockholders holding ten percent (10%) or more of the voting securities. (B) Investors holding a ten percent (10%) or greater interest. (C) Partners. (D) Corporate officers. (E) Trustees. (F) If an association, all of the members. (G) Any affiliates, together with a chart showing the relationship of the applicant to all affiliates. Any affiliate that is an insurance company licensed in Indiana shall be identified as such. (4) Biographical affidavits of all of the following: (A) Officers. (B) Directors. (C) Stockholders holding ten percent (10%) or more voting securities. (D) Investors holding ten percent (10%) or greater interest. (E) Partners. (F) Trustees. (G) Members, if an association. (5) A list of states in which the viatical settlement provider is licensed on the date of application, a copy of each license, and a list of the states in which the viatical settlement provider is or has ever engaged in business as a viatical settlement provider. (6) A list of all licenses from any level of federal government or government of any state applied for by or currently or previously held by the applicant, its officers, directors, trustees, stockholders holding ten percent (10%) or more of voting securities, investors holding a ten percent (10%) or greater interest, partners, or members (if an association), and a statement showing the current status of any such license, including whether it has ever been denied, revoked, or suspended. (7) A report stating whether any formal or informal regulatory action by any level of government of any state or the federal government, including the Securities and Exchange Commission, has been taken or is pending against the applicant or its officers, directors, trustees, stockholders holding ten percent (10%) or more of voting securities, investors holding a ten percent (10%) or greater interest, partners, or members (if an association), and the status of the action. (8) A report stating whether any criminal or civil action involving or alleging an offense that includes fraudulent acts or breach of contract has been taken or is pending against the applicant or its officers, directors, trustees, stockholders holding ten percent (10%) or more of voting securities, investors holding a ten percent (10%) or greater interest, partners, or members (if an association), and the status of the action. (9) A copy of the applicant's most recent financial statement. A financial statement, for purposes of this rule, consists of a financial statement that is compiled in a manner consistent with generally accepted accounting principles (GAAP) and is accompanied by either an opinion by an independent accounting firm or a statement by an officer of the applicant, representing that the financial statement was prepared in a manner consistent with GAAP and accurately reflects the financial condition of the applicant. (10) Copies of any documents filed by the applicant with the Securities and Exchange Commission and any state securities regulator. (11) A detailed plan of operations for the applicant's business, including, but not limited to, information regarding or identifying the following items: (A) Escrow accounts and banks. (B) Advertising and agents, brokers, or other distribution system to be used. (C) Marketing techniques to be used. (D) Market training program. (E) Entities with whom the applicant will contract for services in connection with the acquisition, pricing, and servicing of viatical settlement contracts. (12) Such other information as the commissioner reasonably may require. (e) A viatical settlement provider must possess net worth in the amount of not less than one hundred fifty thousand dollars ($150,000) to qualify for and maintain its license. For purposes of this subsection, in computing capital, the value of viaticated policies shall not be included. (f) A viatical settlement provider may obtain financing for the execution, acquisition, or retention of a viatical settlement contract only: (1) through the services of an individual licensed to sell investments in viatical settlement contracts under applicable state laws; or (2) from an institutional lender, insurance company, or reinsurer whose sole activity related to the transaction is providing funds to effect the viatical settlement and who has an agreement in writing with the viatical settlement provider to finance viatical settlement contracts. (g) A viatical settlement provider shall report any material change in the information in the application or renewal form referred to in this section and section 5 of this rule, including any change of a residential or business address, not later than the thirtieth day after the date on which the change takes effect. (h) The application process shall be as follows: (1) The department of insurance shall have thirty (30) days after receipt of an application to determine whether the application is complete. If an application is not complete, the department of insurance will give the applicant written notice of the required information necessary to complete the application. The department shall take no further action on the application until the required information is submitted. (2) The department of insurance shall have thirty (30) days from the date the application is determined to be complete under subdivision (1) to process the application and approve or deny it. (i) If the commissioner denies an application for a license, the commissioner shall notify the applicant and advise the applicant in writing of the reasons for the denial of the license. Not later than sixty (60) days after receiving a notice from the commissioner under this subsection, the applicant may make written demand upon the commissioner for a hearing to determine the reasonableness of the commissioner's action. Such hearing shall be held within thirty (30) days from the date of receipt of the written demand of the applicant and shall be conducted in accordance with IC 4-21.5-3.