Section 56-50-103 - License and bond requirements(a)(1) A person shall not operate as a viatical settlement provider or viatical settlement broker without first obtaining a license from the commissioner of the state of residence of the viator.(2) A person shall not operate as a viatical settlement investment agent without first obtaining a license from the commissioner of the state of residence of the viatical settlement purchaser. If there is more than one (1) purchaser of a single policy and the purchasers are residents of different states, the viatical settlement purchase agreement shall be governed by the law of the state in which the purchaser having the largest percentage ownership resides or, if the purchasers hold equal ownership, the state of residence of one (1) purchaser agreed upon in writing by all purchasers.(3)(A) A life insurance producer who has been duly licensed as a resident insurance producer with a life line of authority in this state or the life insurance producer's home state for at least one (1) year and is licensed as a nonresident producer in this state shall be deemed to meet the licensing requirements of this section and shall be permitted to operate as a viatical settlement broker.(B) Not later than thirty (30) days from the first day of operating as a viatical settlement broker, the life insurance producer shall notify the commissioner that the life insurance producer is acting as a viatical settlement broker on a form prescribed by the commissioner, and shall pay any applicable fee to be determined by the commissioner. Notification shall include an acknowledgement by the life insurance producer that the life insurance producer will operate as a viatical settlement broker in accordance with this chapter.(C) The insurer that issued the policy being viaticated shall not be responsible for any act or omission of a viatical settlement broker or viatical settlement provider arising out of or in connection with the viatical settlement transaction, unless the insurer receives compensation for the placement of a viatical settlement contract from the viatical settlement provider or viatical settlement broker in connection with the viatical settlement contract.(4) A person licensed as an attorney, certified public accountant or financial planner accredited by a nationally recognized accreditation agency, who is retained to represent the viator, whose compensation is not paid directly or indirectly by the viatical settlement provider, may negotiate viatical settlement contracts on behalf of the viator without having to obtain a license as a viatical settlement broker.(b) Application for a viatical settlement provider, viatical settlement broker or viatical settlement investment agent license shall be made to the commissioner by the applicant on a form prescribed by the commissioner, and these applications shall be accompanied by the fees promulgated by rule.(c) Licenses may be renewed from year to year on the anniversary date upon payment of the annual renewal fees promulgated by rule. Failure to pay the fees by the renewal date results in expiration of the license.(d) The applicant shall provide information on forms required by the commissioner. The commissioner shall have the authority, at any time, to require the applicant to fully disclose the identity of all stockholders, partners, officers, members and employees. The commissioner may, in the exercise of the commissioner's discretion, refuse to issue a license in the name of a legal entity if not satisfied that any officer, employee, stockholder, partner or member of the entity who may materially influence the applicant's conduct meets the standards of this chapter.(e) A license issued to a legal entity authorizes all partners, officers, members and designated employees to act as viatical settlement providers, viatical settlement brokers or viatical settlement investment agents, as applicable, under the license; and all those persons shall be named in the application and any supplements to the application.(f)(1) Upon the filing of an application and the payment of the license fee, the commissioner shall make an investigation of each applicant and issue a license if the commissioner finds that the applicant: (A) If a viatical settlement provider: (i) Has provided a detailed plan of operation;(ii) Is competent and trustworthy and intends to act in good faith in the capacity involved by the license applied for; and(iii) Has a good business reputation and intends to act in good faith in the capacity involved by the license applied for;(B) If a viatical settlement provider, has demonstrated evidence of financial responsibility in a format prescribed by the commissioner through a surety bond executed and issued by an insurer authorized to issue surety bonds in this state, an errors and omissions insurance policy issued by an insurance company licensed to sell such insurance in this state, or a deposit of cash, certificates of deposit or securities or any combination thereof in the amount of two hundred fifty thousand dollars ($250,000);(C) If a viatical settlement broker, has demonstrated evidence of financial responsibility in a format prescribed by the commissioner through a surety bond executed and issued by an insurer authorized to issue surety bonds in this state, an errors and omissions insurance policy issued by an insurance company licensed to sell such insurance in this state, including a policy issued to a viatical settlement provider, that also covers the actions of the broker, or a deposit of cash, certificates of deposit or securities or any combination thereof in the amount of two hundred fifty thousand dollars ($250,000);(D) If a legal entity, provides a certificate of good standing from the state of its domicile; and(E) If a viatical settlement provider or viatical settlement broker, has provided an anti-fraud plan that meets the requirements of § 56-50-114(g).(2) The commissioner may ask for evidence of financial responsibility at any time the commissioner deems necessary.(3) Any surety bond issued pursuant to subdivision (f)(1) shall be in the favor of this state and shall specifically authorize recovery by the commissioner on behalf of any person in this state who sustains damages as the result of erroneous acts, failure to act, conviction of fraud or conviction of unfair practices by the viatical settlement provider or viatical settlement broker.(4) Notwithstanding any provision of this section to contrary, the commissioner shall accept, as evidence of financial responsibility, proof that financial instruments in accordance with the requirements in this subsection (f) have been filed with one (1) state where the applicant is licensed as a viatical settlement provider or viatical settlement broker.(g) 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 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.(h) A viatical settlement provider, viatical settlement broker or viatical settlement investment agent shall provide to the commissioner new or revised information about officers, ten percent (10%) or more stockholders, partners, directors, members or designated employees within thirty (30) days of the change.(i) An individual licensed as a viatical settlement broker shall complete on a biennial basis fifteen (15) hours of training related to viatical settlements and viatical settlement transactions, as required by the commissioner; provided, however, that a life insurance producer who is operating as a viatical settlement broker pursuant to subdivision (a)(3) shall not be subject to the requirements of this subsection (i). Any person failing to meet the requirements of this subsection (i) shall be subject to the penalties imposed by the commissioner.