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LIFE INSURANCE SETTLEMENT ASSOCIATION
 

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LISA Standards

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Standards adopted by the Association

Recommended Standards adopted by the Association 

 

I.                 DEFINITIONS

 

1.     “Advertising” means any written, electronic or printed communication or any communication by means of recorded telephone messages or transmitted on radio, television, the Internet or similar communications media, including film strips, motion pictures and videos, published, disseminated, circulated or placed before the public, directly or indirectly, for the purpose of creating an interest in or inducing a person to purchase or sell a life insurance policy or an interest in a life insurance policy pursuant to a viatical or life settlement contract or a viatical or life settlement purchase agreement.

 

2.     “Affiliate” means an entity where common ownership and/or control is shared. This would not include contractual relationships or administrative organizations or associations.

 

3.     "Business Entity" means any corporation, association, partnership, limited liability company, limited liability partnership or other legal entity.

 

4.     “Business of Viatical or Life Settlements” means an activity involved in, but not limited to, the offering, solicitation, negotiation, procurement, effectuation, purchasing, investing, financing, monitoring, tracking, underwriting, selling, transferring, assigning, pledging, hypothecating or in any other manner, of viatical or life settlement contracts or purchase agreements.

 

5.     “Chronically Ill” means

 

(1)     Being unable to perform at least two (2) activities of daily living (i.e., eating, toileting, transferring, bathing, dressing or continence);

 

(2)     Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment; or

 

(3)     Having a level of disability similar to that described in Paragraph (1) as determined by the Secretary of Health and Human Services;

 

6.     “Complaint” means a written communication that expresses a grievance or dispute.

 

7.     “Consumer” / “Client” means the owner or purchaser of products necessary to effectuate a viatical or life settlement contract. This shall not be a licensee.

 

8.     “Continuing Education” means any educational presentation which is offered in a class, seminar, or computer-based training, interactive Internet training or other similar form of instruction, and which, if required, has been approved by an Insurance Commissioner to develop new and relevant skills and knowledge for licensure.

 

9.     “Fair and Equitable Competition” means competition using the elements of price, quality and service that is subject to federal and state antitrust laws and state and federal insurance and securities laws and is conducted to generally accepted fair and equitable business practices.

 

10.“FDIC” means Federal Deposit Insurance Corporation

 

11.“FEGLI” means the Federal Employee Group Life Insurance

 

12.“Funding/Financing Entity” means an underwriter, placement agent, lender, purchaser of securities or a purchaser of a policy or certificate from a settlement Provider, credit enhancer, or any entity that has direct ownership in a policy or certificate that is subject to a settlement contract, but whose principal activity related to the transaction is providing funds or credit enhancement to effect the settlement or purchase of one or more policies to finance the acquisition of settlements contracts.  This term does not include a non-accredited investor, a settlement purchaser, or other natural person.       

 

13.“Good Faith” means good faith efforts on the part of a Member, with the intention to obtain a desired outcome.

 

14.“Home State” means the District of Columbia and any state or territory of the United States in which a licensee or member maintains such license or Member’s principal place of business or if not applicable the Member’s residence. 

 

15.“Independent third-party or escrow agent” means an attorney, certified public accountant, financial institution, or other person providing escrow services under the authority of a regulatory body.  The term does not include any person associated, affiliated, under common control with a Provider or Broker.  The independent Trustee/Escrow Agent must be a U.S. attorney, a U.S. public accounting firm, or a U.S. bank/trust company and must have a registered office within the continental United States. 

 

16. “Insured” means the individual whose life is covered in a life insurance policy whether the individual owns or does not own the policy.

 

17.“License” means a document issued by a licensing authority, usually an Insurance Commissioner, authorizing a person and/or a company to act for the line or lines of authority specified in the document.

 

18. “Owner” means the Owner of a life insurance policy or a group life insurance certificate holder under a group policy.

 

19.“Person” means a natural person or a legal entity, including, but not limited to, an individual, partnership, limited liability company, association, trust, or corporation.

 

20.“Policies and Procedures” means those internal written plans or methods required to influence and determine a Member’s decisions and actions.

 

21.“Policy” means an individual life insurance policy or group life insurance policy, group life insurance certificate, contract or arrangement of life insurance affecting the rights of the owner of such policy in a particular state or bearing a reasonable relation to a particular state, regardless of whether delivered or issued for delivery in that particular state.

 

22.“Regulator” means a person or regulatory body that possesses authority pursuant to law to govern the business of viatical or life settlements in the United States at the state or federal level.

 

23.“Related Provider Trust” means a titling trust or other trust established by a licensed viatical settlement Provider or Funding/Financing Entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction.  The trust shall have a written agreement with the licensed viatical settlement Provider under which the licensed viatical settlement Provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files related to viatical and life settlement transactions available to the applicable Commissioner(s) as if those records and files were maintained directly by the licensed viatical settlement Provider.

 

24. “Sales Agent” means a Person other than a licensed Provider who arranges the purchase through a Purchase Agreement of a policy or an interest in a life insurance policy or certificate issued to a group life insurance policy.

 

25. “Service Group” means a Provider, Broker, and/or Funding/Financing Entity.

 

26. “Service Provider” is an individual or entity that performs services for an insured, policy owner, Broker, Provider or Funding/Financing Entity to assist in the effectuation of a viatical or life settlement and the subsequent service thereof.  A Service Provider can include, but is not limited to: life expectancy providers; escrow agents; trustees, financial advisors; certified public accountants and attorneys.  A Service Provider can provide services before, during and after the effectuation of a viatical or life settlement. 

 

27.“Special Purpose Entity” means a corporation, partnership, trust, Limited Liability Company or other similar entity formed solely to provide either directly or indirectly access to institutional capital markets for a Funding/Financing Entity or licensed viatical settlement Provider.

 

28. “Terminally Ill” means having an illness or sickness that can reasonably be expected to result in death in twenty-four (24) months or less.  

 

29.“Unfair Competition” means the direct or indirect unethical, false or fraudulent activity by a Member in order to gain a competitive advantage in the viatical and life settlement business over other Members or to take unfair or improper advantage of a Client (Owner and/or Insured).  Some of these activities are described in various state or federal laws under titles that include, but are not limited to “Prohibited Practices,” causes for revocation and denial of license, “Unfair Trade Practices,” or “Fraudulent Viatical Settlement Acts.”

 

30.“Verification of Coverage” means a document used to verify the amount, nature, premiums, and other details of coverage of an insurance policy.

 

31.“Viatical or Life Settlement Broker” means a person that on behalf of an Owner and for a fee, commission or other valuable consideration offers or attempts to negotiate settlement contracts between an Owner and one or more Providers.  Notwithstanding the manner in which the Broker is compensated, a Broker is deemed to represent only the Owner and owes a fiduciary duty to the Owner to act according to the Owner’s instructions and in the best interest of the Owner.  The term does not include an attorney, certified public accountant or financial planner accredited by a nationally recognized accreditation agency, who is retained to represent the Owner and whose compensation is not paid directly or indirectly by the Provider or purchaser.

 

32.“Viatical or Life Settlement Contract” means a written agreement establishing the terms under which compensation or anything of value will be paid, which compensation or value is less than the expected death benefit of the insurance policy or certificate, in return for the Owner’s assignment, transfer, sale, devise or bequest of the death benefit or ownership of any portion of the insurance policy or certificate of insurance. A viatical or life settlement contract also includes a contract for a loan or other financing transaction with an Owner’s secured primarily by an individual or group life insurance certificate, other than a loan by a life insurance company pursuant to the terms of the life insurance contract, or a loan secured by the cash value of a policy. A viatical or life settlement contract includes an agreement with an Owner to transfer ownership or change the beneficiary designation at a later date regardless of the date that compensation is paid to the Owner.

 

33.“Viatical or Life Settlement Provider” means a person, other than an Owner, that enters into or effectuates a viatical or life settlement contract. Viatical or life settlement Provider does not include:

 

(1) A bank, savings bank, savings and loan association, credit union or other licensed lending institution that takes an assignment of a life insurance policy as collateral for a loan;

 

(2) The issuer of a life insurance policy providing accelerated benefits and pursuant to the contract;

 

(3) An authorized or eligible insurer that provides stop loss coverage to a viatical or life settlement provider, purchaser, financing entity, special purpose entity or related provider trust;

 

(4) A natural person who enters into or effectuates no more than one agreement in a calendar year for the transfer of life insurance policies for any value less than the expected death benefit;

 

(5)        A Funding/Financing entity, a special purpose entity, a  related Provider, trust, or a viatical or life settlement    purchaser; or

 

(6)        An accredited investor or qualified institutional buyer as defined respectively in Regulation D, Rule 501 or Rule 144A of the Federal Securities Act of 1933, as amended, and who purchasers a viaticated policy from a viatical or life settlement provider.

 

34.“Viatical or Life Settlement Purchase Agreement” means a contract or agreement, entered into by a viatical or life settlement purchaser, to which the Owner is not a party, to purchase a life insurance policy or an interest in a life insurance policy, that is entered into for the purpose of deriving an economic benefit.

 

35.“Viatical or Life Settlement Purchaser” means a person who gives a sum of money as consideration for a life insurance policy or an interest in the death benefits of a life insurance policy, or a person who owns or acquires or is entitled to a beneficial interest in a trust that owns a viatical or life settlement contract or is the beneficiary of a life insurance policy that has been or will be the subject of a viatical or life settlement contract, for the purpose of deriving an economic benefit.  Viatical or life settlement purchaser does not include:

                                     

(1) An accredited investor or qualified institutional buyer as defined respectively in Regulation D, Rule 501 or Rule 144A of the Federal Securities Act of 1933, as amended; or

 

(2) A financing entity, a special purpose entity, or a related provider trust.

                            

36.“Viaticated Policy” means a life insurance policy or group life insurance certificate that has been acquired by a viatical or life settlement Provider pursuant to a viatical or life settlement contract.

 

37.“Viator” means the Owner of a life insurance policy or a group life insurance certificate holder under a group policy who enters or seeks to enter into a viatical or life settlement contract.  A Viator shall not be limited to an Owner of a life insurance policy or a group life insurance certificate holder under a group policy insuring the life of an individual with a terminal or chronic illness or condition except where specifically addressed. Owner does not include:

 

(1) An accredited investor or qualified institutional buyer as defined respectively in Regulation D, Rule 501 or Rule 144A of the Federal Securities Act of 1933, as amended; or

 

(2) A Funding/Financing Entity, a special purpose entity, or a related provider trust.

 

38.“LISA” means the Viatical & Life Settlement Association of America.


 

 

II.          Broker/Producer/Life Agent Member

 

BUSINESS OPERATING STANDARDS

 

A. Business Practices With Owners

 

(1) A Viatical or Life Settlement Broker is defined as a person that on behalf of an Owner and for a fee, commission or other valuable consideration offers or makes aware the availability of or attempts to negotiate settlement contracts between an Owner and one or more Providers.  Notwithstanding the manner in which the Broker is compensated, a Broker is deemed to represent the Owner and owes a fiduciary duty to the Owner to act according to the Owner’s instructions and in the best interest of the Owner.  The term does not include an attorney, certified public accountant or financial planner accredited by a nationally recognized accreditation agency, who is retained to represent the Owner and whose compensation is not paid directly or indirectly by the Provider or purchaser.

 

(2) A Producer/Life Agent Member is a person licensed to sell, solicit, or negotiate insurance.  If the Producer/Life Agent acts as a Broker Member or meets the definition of a Viatical or Life Settlement Broker, the Producer/Life Agent must follow the Broker Business Operating Standards.

 

(3) If required, a Broker Member must be licensed in the state where the Owner is domiciled.

 

(4) A Broker Member assists an Owner to sell his or her policy at the best possible terms or price. 

 

(5) A Broker Member must comply with all applicable state and federal laws.

 

(6) A Broker Member shall not pay finders’ fees to those persons or entities that may be prohibited by applicable law from receiving such fees. 

 

(7) A Broker Member shall provide sufficient procedures and controls so that all medical information is confidential according to the applicable statutes.

(8) A Broker Member shall follow an Anti-Fraud Plan and file the plan with the LISA.

 

(9) A Broker Member must be able to provide validation that if the Owner is the insured, the Broker Member has a written statement from the insured’s physician stating that the Owner is of sound mind and under no undue influence.

 

(10) A Broker Member shall not, except as provided for in state laws, broker the settlement of any policy that is in its Contestable and/or Suicide Period.

 

B.      Disclosure Information

 

(1) A Broker Member shall disclose appropriate information in line with applicable state law and where no Disclosures are required, the Broker Member shall disclose the LISA Broker Member disclosures.

 

(2) The disclosures shall be provided in a separate document that is signed and acknowledged by the Owner and/or applicant and/or Broker Member where applicable.   

 

C.          Record Keeping for Complete Transactions

 

(1) A Broker Member will maintain a file on every policy that it brokers. The Broker Member must keep the file for a minimum of three years or longer where required by law, starting on the date the Owner signs the Settlement Contract. 

 

(2) At a minimum the file must contain:

 

a.     A complete copy of the life insurance policy or certificate and application that was brokered.

b.    A copy of the completed Settlement Contract.

c.     A copy of the disclosures that are required by applicable state or administrative law.  If state law does not require disclosures, a copy of the LISA Broker Member disclosures, signed by the Owner, see addendum 1.

 

 

 

D.           Addenda

 

(5) A Broker Member shall comply fully with the LISA’s Code of Ethics and the LISA’s Broker Member Business Operating Standards.   The Broker Member Business Operating Standards includes the following addenda:

Broker Disclosures, addendum 1;

Member Business Operating Standards, addendum 4.


 

III.   Provider Members (“Providers”)

 BUSINESS OPERATING STANDARDS

A.      General Business Practices

(1) A viatical settlement provider (a “Provider”) often is defined as a person, other than the owner (the “Owner” or “Seller”) of a life insurance policy (a “Policy”) who enters into or effectuates a viatical or life settlement contract (a “Settlement Contract”). A Provider does not include the following:

a.       A bank, savings bank, savings and loan association, credit union or other licensed lending institution that takes an assignment of a Policy as collateral for a loan, except in the case a viatical or life settlement loan;

b.       The issuer (the “Insurer”) of a Policy which provides accelerated benefits pursuant to the terms of the Policy;

c.       An authorized or eligible insurer that provides stop loss coverage to a Provider, to a purchaser (“Purchaser”) of viatical and/or life settlement contract benefits, to a financing entity (“FE”), to a special purpose entity (“SPE”) or to a related provider trust (“RPT”);

d.       A natural person who enters into or effectuates no more than one Settlement Contract in a given state per calendar year for the transfer of a Policy for any value less than the expected death benefit of the Policy;

e.      An accredited investor (“AI”) or qualified institutional buyer (“QIB”), as defined respectively in Regulation D, Rule 501 or Rule 144A of The Securities Act of 1933, as amended, and who purchases from a Provider a Policy viaticated by a Provider

(2) Providers shall not also act as a viatical and/or life settlement broker (“Broker”).  

(3) Providers must comply with applicable state and federal statutes and regulations (together, “Applicable Law”).

(4) The primary responsibility of each Provider is to effectuate the Settlement Contracts into which it enters pursuant to the terms and conditions of those Settlement Contracts and pursuant to Applicable Law.

(5) When effectuating a Settlement Contract into which the Provider enters, the Provider may utilize its own funds (“Provider Funds”) or may utilize funds (“Purchaser Funds”) provided to it by individual Purchasers (“Individual Purchasers”) or funds (“Institutional Funds”) made available to the Provider by institutional Purchasers (“Institutional Purchasers”).

(6) Each Provider must be registered with the Secretary of State of his or her state of domicile and in any state in which the Provider is licensed as a Provider.  

(7) Providers shall ensure that Settlement Contract proceeds are remitted to the Seller within any applicable period required by Applicable Law.

(8) As required by Applicable Law and/or by the terms of the Settlement Contract to which it is a party, a Provider shall use the services of an independent trustee (“Trustee”) or independent escrow agent (“Escrow Agent”) whose duties shall be set forth in writing and provided to the Provider and to the Owner.

(9) A Provider shall adopt and adhere to one or more Anti-Fraud Plans (each, an “Anti-Fraud Plan”), a copy of which shall be filed with the LISA.  Each Provider must implement one or more Anti-Fraud Plans which, together, apply to all Policies which the Provider determines satisfies its viatical and/or life settlement criteria. 

(10) A Provider shall adopt and adhere to an Anti-Money Laundering Plan (an “AML Plan”) and file a copy of the AML Plan with the LISA.  The AML Plan must be compliant with the USA Patriot ACT and be applied to all Purchasers with whom the Provider transacts. 

(11) A Provider shall obtain and maintain on file one or more documents signed by the person (the “Insured”) whose life is insured under the Policy, which instruct the Provider how the Provider may use the Insured’s medical records, and the Provider shall obtain and maintain on file one or more documents which comply with HIPAA and which are signed by the Insured or an authorized designee of the Insured which consent to the release of the Insured’s medical records.

(12) A Provider shall ensure that it provides safeguards for maintaining privacy and confidentiality of medical, financial, and personal information of the Seller and of the Insured, as required pursuant to Applicable Law. 

(13) A Provider shall ensure that any forms or documents which must be provided to the Insurer are provided to the Insurer.

(14) A Provider shall ensure that all post-settlement and post-investment responsibilities of the Provider and of its agents, representatives, and designees, including but not limited to tracking and monitoring services, are performed in a professional manner.

(15) If the Provider uses funds provided to it by Individual Purchasers or by Institutional Purchasers, then the Provider must ensure that all of the following occur:

a.      Payment of all premiums is managed, controlled, and directed under the terms of a signed, written agreement with a Trustee or Escrow Agent.

b.     All death benefit payments are received, managed, and paid to the Purchaser thereof or to the Purchaser’s designee, pursuant to the terms of the signed, written agreement between the Trustee or Escrow Agent and the Provider and as explained to the Purchaser in a signed, written agreement (“Purchase Agreement”) explaining the terms and conditions of the purchase transaction (“Purchase Transaction”) made by the Purchasers. 

(16) A Provider shall ensure that the Insured has received notice regarding future contact for determining the health status of the Insured, that such contacts will comply with Applicable Law and with the terms and conditions of the underlying Settlement Contract, and that the such contact will not be initiated or conducted by any person that is not authorized to perform such services.

(17) A Provider shall ensure that both the Seller and the Purchaser have received the name, business address, and telephone number of the Escrow Agent, have been provided an opportunity to inspect and receive copies of the escrow or trust agreements with the Escrow Agent and/or Trustee, respectively, and an explanation of the relationship, if any, between the Provider and the Escrow Agent and Trustee providing escrow or trust services in the course of the respective transactions with the Seller and with the Purchaser. 

(18) A Provider shall not illegally discriminate among and against prospective and actual Sellers.

(19) A Provider shall adopt and adhere to procedures which prohibit the payment of sales-related compensation to persons prohibited by Applicable Law from receiving any fee in connection with a Settlement Contract or Purchase Agreement.

(20) If the Seller is also the Insured, then the Provider shall obtain and maintain on file a signed, written statement from the physician attending to the Seller/Insured which states that the Seller/Insured is of sound mind and under no undue influence.

(21) A Provider shall ensure that all medical, financial, and personal information of the Seller and of the Insured is maintained as private and confidential, as required pursuant to Applicable Law. 

(22) A Provider shall obtain and maintain on file a document signed by the Seller and by a disinterested third-party witness in which (a) the Seller consents to the Settlement Contract, (b) the Seller acknowledges having a complete and full understanding of the Settlement Contract and of the benefits of the Policy, (c) the Seller acknowledges entering into the Settlement Contract freely, voluntarily, and no under influence, and (d) the Seller legally obtained the Policy.


 

B.      Disclosure Information

(1) A Provider shall provide transaction-specific disclosures to the Seller and/or the Insured, pursuant to Applicable Law. 

(2) If Applicable Law does not require that the Provider provide transaction-specific disclosures to the Seller and/or the Insured, then the Provider should disclose the following information:

i.           Disclosures to Sellers and to Insureds

When effectuating a Settlement Contract with a Seller and/or an Insured, the Provider shall provide the disclosures contained in Addendum 1 and in Addendum 2a.

ii.           Disclosures to Purchasers    

When effectuating a Purchase Agreement with a Purchaser, the Provider should provide the set of disclosures contained in Addendum 2b to the Purchaser at one point in time and later provide the set of disclosures contained in Addendum 2c to the Purchaser. 

C.      Using Funds Other Than Provider Funds to Effectuate Settlement Contracts

(1) If the Provider uses Purchaser Funds to effectuate a Settlement Contract into which the Provider enters, the Provider should not: 

a.                Receive any Purchaser Funds into the Provider own account(s).  Instead, all Purchaser Funds shall be deposited directly into a trust or escrow account maintained by the Trustee or Escrow Agent.

b.               Take title to (e.g., ownership of) a Policy in the name of the Provider.  Instead, title to (e.g., ownership of) the Policy should be taken in the name of the Purchaser, the designee of the Purchaser, or the RPT (if applicable). 

c.               Guarantee, promise, suggest, or imply to any Purchaser that the Provider will pay premiums that may become due at any time except as specifically and expressly provided in the Purchase Agreement.

d.               Guarantee, promise, suggest, or imply that any ownership and/or beneficial rights which a Purchaser receives pursuant to a Purchase Agreement which the Purchaser enters into with the Provider are liquid or that there is a secondary market which provides liquidity for those rights.

e.          Have any access to the funds on deposit in any premium escrow account with respect to any Policy (such funds, “Policy Premium Funds”) maintained by the Trustee or by the Escrow Agent.  Instead, only the Trustee or Escrow Agent should have access to such funds and the Trustee or Escrow Agent, as applicable, should be responsible for the timely payment of premiums due on the Policy during the payment period prescribed under the Purchase Agreement.

f.                 Receive the death benefit proceeds (“Maturity Proceeds”) payable under the Policy upon its maturity.  Instead, Maturity Proceeds should be paid directly by the Insurer to the Purchaser, to the Purchaser’s designee, or to the Trustee or Escrow Agent, depending upon how ownership and beneficial rights have been recorded by the Insurer with respect to the Policy.

g.            Advertise that the transaction described in the Purchase Agreement is insured by stop-loss coverage or otherwise is in any way guaranteed, unless such coverage or guarantee in fact has been obtained and a copy thereof delivered to the Purchaser prior to the closing of the transaction described in the Purchase Agreement. 

(2) The Provider shall contract with a Trustee or Escrow Agent to disburse Matured Proceeds and Policy Premium Funds, and the Trustee or Escrow Agent shall be responsible, pursuant to the terms and conditions of written agreements in regards thereto between the Provider and the Trustee or Escrow Agent, for the disbursement of Maturity Proceeds received thereby to the Purchasers or Purchaser designees entitled to receive Maturity Proceeds according to their respective interest in the underlying Policy.

D.           Conducting Business with Individual Purchasers

(1) When a Provider raises funds from Individual Purchaser, a Provider shall do all of the following:

a.      Comply with all state and federal securities statutes and regulations and/or exemptions available under those statutes and regulations.

b.     Engage a Trustee or Escrow Agent to hold Purchaser Funds until disbursed in accordance with the terms and conditions of the Purchase Agreement with the Purchaser and with Applicable Laws.  To the extent Applicable Laws require the same, Purchaser Funds shall be deposited with an Escrow Agent .

c.     Ensure that all sales agents and sales representatives comply with these Standards and with Applicable Laws.

E.                Business Practices When Provider Funds Are Used to Effectuate Settlement Contracts

If a Provider uses only Provider Funds to effectuate Settlement Contracts, the Provider then is permitted to receive Institutional Funds or Purchaser Funds from one or more AIs or QIBs in one or more accounts maintained directly by the Provider.

F.           Business Practices When Funds Other Than Purchaser Funds or Provider Funds Are Used to Effectuate Settlement Contracts

If a Provider uses Institutional Funds to effectuate Settlement Contracts, the Purchaser must have the legal and/or corporate authority to enter into the Purchase Agreement.

 

 

 


 

IV. Funding/Financing Entity Member

                  

BUSINESS OPERATING STANDARDS

 

A.          General Business Practices

 

(1) A Funding/Financing Entity raises funds from Purchasers/Investors and matching the designated parameters of these funds as to life expectancy, policy size, issuing company ratings and other related factors to the specifications of policies made available through Providers.  The Funding/Financing Entity is paid a fee from the Settlement Purchaser funds for this service.  The Funding/Financing Entity is typically not licensed to perform this activity.  A Funding/Financing Entity shall have procedures that ensure that in those states that prohibit it, the Funding/Financing Entity never acts as a Provider.  A Funding/Financing is distinguishable from a Provider Member because a Funding/Financing Entity does not have title to the insurance policy. Finally, a Funding/Finance Entity must comply with state and federal law.

 

(2) Funding/Financing Entity Member’s primary responsibility is the raising of funds to effectuate a Settlement Contract.

 

(3) A Funding/Financing Entity Member shall follow an Anti-Fraud Plan and file the plan with the LISA.

 

(4) A Funding/Financing Entity Member shall follow an Anti-Money Laundering Plan and file the plan with the LISA.  This plan must be compliant with the USA Patriot Act and be implemented by Funding/Financing Entity Member on all Settlement Purchaser funds being tendered to the independent Trustee/Escrow Agent.

 

(6) Have a complete listing of Risk Factors to be reviewed and signed by every Settlement Purchaser outlining the risks involved in the purchase of an interest in a viaticated life insurance policy.

 

(7) A Funding/Financing Entity Member will not have any transaction post-sale responsibilities other than minor ministerial:

a.      Payment of all premiums are managed and paid by the independent Trustee/Escrow Agent.

b.     Tracking and monitoring services are performed by a professional monitoring/tracking entity that is independent of Funding/Financing Entity.

 

(8) All death benefit payments are received, managed and paid as contracted for by the independent Trustee/Escrow Agent directly to the policy Purchaser(s)/Investor(s) pursuant to their interest in the specific policy that has matured.

 

(9) A Funding/Financing Entity Member (whether a United States company or a foreign company) must be registered with the Secretary of State in the State(s) in which it operates.

 

(10) A Funding/Financing Entity Member (whether a United States company or a foreign company) must comply with all regulations of the states in which it operates.

 

(11) A Funding/Financing Entity Member (whether a United States company or a foreign company) must have an independent Trustee/Escrow Agent who must be an attorney licensed in the U.S., a U.S. public accounting firm, or a U.S. bank/trust company and the licensed escrow agent must have offices within the United States.

 

 (12) The Funding/Financing Entity Member shall be able to validate that all disclosure documents contain language that provide safeguards for the disclosure of medical, financial or personal information.

 

(13) The Funding/Financing Entity Member shall be able to validate that all medical information is and remains confidential according to the applicable statutes in the state of the Insured.

 

B.           Disclosure Information