SB 1928 Summary

• Creates the "Funding Company Regulation Act" to regulate companies that advance funds to life insurance beneficiaries in exchange for assignment of their benefit claims.

• Requires funding companies to obtain licenses from the Administrator of Consumer Credit and establishes requirements for written funding agreements with specific disclosures, payment schedules, and a 5-business-day rescission right.

• Prohibits funding companies from paying referral fees to attorneys or medical providers, making false advertisements, interfering with beneficiary claims, or charging percentages of claims (amounts must be predetermined, not percentage-based).

• Establishes licensing procedures including character and fitness investigations, bond/letter of credit requirements (up to $50,000), and biennial license renewals; creates penalties and administrative fines for violations.

• Applies only to funding agreements entered into on or after the November 1, 2014 effective date, with the Commission on Consumer Credit required to adopt implementing rules by January 1, 2015.