Section 213: License requirement for life settlement providers and life settlement brokers
Section 213. (a) No person shall act as a life settlement provider or, except as provided in clauses (c) and (d), a life settlement broker with an owner who is a resident of the commonwealth, without first obtaining a license from the commissioner.
(b) The secretary of administration and finance shall determine the fee for a life settlement provider license and life settlement broker license under section 3B of chapter 7; provided, however, that the term and fees for a life settlement provider license shall be equal to that of a foreign stock life insurance company and the term and fees of a life settlement broker license shall be equal to that of an insurance producer license. Licenses shall be renewed on their anniversary date upon payment of a renewal fee as determined by the secretary. Failure to pay the fees on or before the renewal date shall result in expiration of the license.
(c) A life insurance producer duly licensed as a resident insurance producer with a life line of authority in the commonwealth or in the life insurance producer's home state for at least 1 year and is licensed as a nonresident producer in the commonwealth shall be deemed to meet the licensing requirements of this section and may operate as a life settlement broker; provided, however, that not later than 30 days from the first day of operating as a life settlement broker, the life insurance producer shall notify the commissioner, on a form prescribed by the commissioner, that the producer is acting as a life settlement broker and the producer shall pay the prescribed fee as determined by the secretary of administration and finance under section 3B of chapter 7. Notification shall include an acknowledgment by the life insurance producer that the producer shall operate as a life settlement broker in accordance with this section.
(d) A licensed attorney, certified public accountant or financial planner accredited by a nationally recognized accreditation agency, who is retained in the type of practice customarily performed in their professional capacity to represent the owner and whose compensation is not paid directly or indirectly by the life settlement provider or purchaser, may negotiate life settlement contracts on behalf of the owner without obtaining a license as a life settlement broker.
(e) Upon the filing of an application for initial licensure and payment of the application fee, the commissioner shall examine each applicant and may issue a license if the commissioner finds that the applicant:
(1) has provided a detailed plan of operation, if the applicant is a life settlement provider;
(2) is competent, trustworthy and intends to transact its business in good faith;
(3) has a good business reputation and has the experience, training and education to be qualified in the business for which the license is applied;
(4) if a legal entity, was formed or organized under the laws of the commonwealth or is a foreign legal entity authorized to transact business in the commonwealth or provides a certificate of good standing from the state of its domicile; and
(5) if a life settlement provider, has provided to the commissioner an antifraud plan that meets the requirements of subsection (g) of section 223B.
(f) An applicant for a license under this section shall provide such information as the commissioner may require on forms authorized by the commissioner. The commissioner may require an applicant to fully disclose the identity of its stockholders owning 10 per cent or more of the shares of an applicant whose shares are publicly traded, partners, officers and employees. The commissioner shall not issue a license to a qualified applicant if the commissioner determines that an officer, employee, stockholder or partner thereof, who may materially influence the applicant's conduct, has failed to establish its individual qualifications for licensure under this chapter.
(g) A license issued to a legal entity shall authorize all members, officers and designated employees to act as licensees under the license; provided, however, that those persons shall be identified in the initial application or in any supplements to the application.
(h) The commissioner shall not issue a license to a nonresident applicant unless a written designation of an agent for service of process is filed and maintained with the commissioner or unless the applicant has filed with the commissioner the applicant's written irrevocable consent that any action against the applicant may be commenced against the applicant by service of process on the commissioner.
(i) A life settlement provider shall not use any person to perform the functions of a life settlement broker unless the person holds a current, valid life settlement broker license.
(j) A life settlement broker shall not use any person to perform the functions of a life settlement provider unless such person holds a current, valid life settlement provider license.
(k) All licensees under this section shall provide to the commissioner any new or revised information about officers, 10 per cent or more stockholders, partners, directors, members or designated employees within 30 days after receiving such information.
(l) A person licensed as a life settlement broker shall, on a biennial basis, complete 15 hours of training related to the business of life settlements and life settlement transactions as required by the commissioner; provided, however, that a life insurance producer who is operating as a life settlement broker shall not be subject to the requirements of this subsection. Failure to meet the requirements of this subsection may result in suspension or nonrenewal of license by the commissioner.
(m) A person licensed as a life settlement broker shall represent only the owner and shall owe a fiduciary duty to the owner to act according to the owner's instructions and in the best interest of the owner, regardless of the manner in which the life settlement broker is compensated.