Exemption from Registration

Exemption from Registration. A. Except as provided in Subsection (B) of this Rule, an offer or sale of a viatical settlement investment contract or a security that represents or is secured by a viatical settlement investment contract is exempt from registration under the Act if the issuer: 1. At least thirty (30) days prior to the date the initial offer is made, files a registration statement on the Division’s Form V902 and the materials contained in Subsection (A)(2) of this Rule. 2. The following items must be filed with a registration statement: a. Prospectus, pamphlet, circular, form letter, advertisement, or other sales literature used or intended to be used in connection with the offer or sale of the security; and b. The issuer’s most recent audited income and expense statement and balance sheet. A prospective viatical settlement purchaser may obtain copies upon written request to the Division. 3. All viatical settlement investment contracts sold in this state must include a medical release executed by the viator in favor of the Secretary of State of the State of Mississippi. This release must be maintained in the issuer’s office and must be provided by the issuer to the Division upon demand. 4. Before a sale, each prospective individual viatical settlement purchaser must be furnished written information that is sufficient to make an informed investment decision. For the purposes of this Subsection, information that is sufficient to make an informed investment decision includes the: a. Viatical settlement disclosure document developed by the Secretary of State and available on the Division’s Form VIAD, Part I. The issuer must provide in that document an address to which a notice of rescission may be sent; and b. Disclosure of any significant factors that may affect the outcome of the investment. 5. On or before the time of closure of a sale, defined as the date when the viatical settlement provider locates and proposes to the viatical settlement purchaser an acceptable specific viatical contract under the executed purchase agreement, an individual investor must receive a viatical settlement disclosure document that the issuer has completed using the Division’s Form VIAD, Part II. 6. In order to qualify for the exemption and unless waived by the Secretary of State, the issuer and the issuer’s predecessors must show, along with the issuer’s predecessor, that it has been in continuous operation for at least three (3) fiscal years without a default in the payment of principal, interest, dividends, or other obligations on a security of the issuer or a predecessor of the issuer with a fixed maturity or a fixed interest, dividend, or other provision. B. The Secretary of State shall deny an application for exemption under this Chapter if an issuer, a predecessor of the issuer, an affiliate of the issuer, a director of this issuer, an officer of the issuer, a general partner of the issuer, a beneficial owner of ten percent (10%) or more of a class of the issuer’s equity securities, a promoter of the issuer presently connected with the issuer in any capacity, an underwriter of the securities to be offered, a partner of an underwriter of the securities to be offered, a director of an underwriter of the securities to be offered, or an officer of the underwriter of the securities to be offered: 1. Has filed within the last five (5) years a registration statement that is the subject of a currently effective registration stop order entered by a state securities administrator or the SEC. 2. Within the last five (5) years has been convicted of: a. A felony; b. A criminal offense involving fraud or deceit; or c. A criminal offense in connection with the offer, purchase, or sale of a security. 3. Is currently subject to a state or federal administrative enforcement order or judgment in connection with the purchase, offer, or sale of a security. 4. Is currently subject to an order, judgment, or decree temporarily, preliminarily, or permanently restraining or enjoining the person subject to the order from engaging in or continuing to engage in conduct or a practice involving fraud or deceit in connection with the purchase, offer, or sale of a security. 5. For any other reason that is in the public interest as determined by the Secretary of State.