H.B. 798 Summary

• Imposes a 4% general excise tax on gross income derived from life settlement contracts by persons unrelated to the insured.

• Exempts death benefits paid to persons related to the insured from the excise tax.

• Defines life settlement contracts to include written agreements for policy transfers valued below expected death benefits, transfers of trusts owning policies, loan agreements secured by policies, and premium finance loans with specific conditions.

• Excludes from taxation policy loans, bank loans, collateral assignments, family arrangements, employee-employer agreements, and bona fide business succession planning arrangements.

• Takes effect July 1, 2011.