SB3062 Summary

• Enacts a new Life Settlements Act establishing comprehensive regulation of life settlement contracts where policy owners transfer death benefits for compensation exceeding cash surrender value but less than expected death benefit.

• Requires providers and brokers to obtain state licenses and prohibits licensing of persons with felony convictions involving dishonesty or fraud; establishes examination and reporting requirements by the insurance commissioner.

• Mandates detailed written disclosures to owners covering alternatives, tax consequences, creditor claims, public assistance impacts, 15-day rescission rights, and broker compensation; requires conspicuous display in all life settlement contracts.

• Prohibits fraudulent practices including presenting false information, issuing policies designed solely for settlement, and stranger-originated life insurance arrangements; establishes mandatory fraud reporting and anti-fraud initiatives for licensees.

• Sets licensing fees for life settlement providers ($75-$150 initial, $1,200 annual) and brokers ($75-$150 initial, $150 annual); provides penalties up to $10,000 per violation plus claim amounts and license revocation for fraudulent acts.