ORS 744.318
Definitions for ORS 744.318 to 744.384
(1)
“Advertising” means any written, electronic or printed communication or any communication by means of recorded telephone messages or transmission on radio, television, the Internet or similar communications media, including film strips, motion pictures and videos, published, disseminated, circulated or placed directly before the public in this state for the purpose of creating an interest in or inducing a person to purchase or sell, assign, devise, bequest or transfer the death benefit or ownership of a life insurance policy or to purchase or sell, assign, devise, bequest or transfer the death benefit or ownership of a life insurance policy pursuant to a life settlement contract.(2)
“Business of life settlements” means an activity involved in, but not limited to, the offering, soliciting, negotiating, procuring, effectuating, purchasing, investing, financing, monitoring, tracking, underwriting, selling, transferring, assigning, pledging, hypothecating or in any other manner acquiring an interest in a life insurance policy by means of a life settlement contract.(3)
“Chronically ill” means:(a)
Being unable to perform at least two activities of daily living, such as eating, toileting, moving around, bathing or dressing;(b)
Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment; or(c)
Having a level of disability similar to that described in paragraph (a) of this subsection as determined by the Director of the Department of Consumer and Business Services.(4)
Intentionally left blank —Ed.(a)
“Financing entity” means an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a life settlement provider, credit enhancer or any other person or entity that has a direct ownership in a policy or certificate that is the subject of a life settlement contract, but:(A)
Whose principal activity related to the transaction is providing funds to effect the life settlement or purchase of one or more settled policies; and(B)
Who has an agreement in writing with one or more licensed life settlement providers to finance the acquisition of life settlement contracts.(b)
“Financing entity” does not include a nonaccredited investor or a life settlement purchaser.(5)
“Licensee” means a life settlement provider, life settlement broker or life settlement investment agent.(6)
“Life insurance producer” means any person licensed in this state as a resident or nonresident insurance producer who has received qualification or authority under ORS 744.062 (Issuance of insurance producer license) or 744.063 (Nonresident insurance producer license) to transact life insurance.(7)
Intentionally left blank —Ed.(a)
“Life settlement broker” means a person, including a life insurance producer, working exclusively on behalf of an owner and for a fee, commission or other valuable consideration, who offers or attempts to negotiate life settlement contracts between an owner and one or more life settlement providers or one or more life settlement brokers. Notwithstanding the manner in which the life settlement broker is compensated, a life settlement broker is deemed to represent only the owner, and not the life insurance producer or the life settlement provider, and owes a fiduciary duty to the owner to act according to the owner’s instructions and in the best interest of the owner.(b)
“Life settlement broker” does not include an attorney, a certified public accountant or a 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 life settlement provider or purchaser.(8)
Intentionally left blank —Ed.(a)
“Life settlement contract” means a written agreement between an owner and a life settlement provider or any affiliate of the life settlement provider establishing the terms under which compensation or anything of value is or will be paid, which compensation or value is less than the expected death benefits of the policy, in return for the owner’s present or future assignment, transfer, sale, devise or bequest of the death benefit or ownership of any portion of the insurance policy or certificate of insurance.(b)
“Life settlement contract” includes the transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns a life insurance policy or certificate of insurance if the trust or other entity was formed for the principal purpose of acquiring one or more life insurance contracts insuring the life of a person residing in this state.(c)
“Life settlement contract” also includes a premium finance loan made for a life insurance policy by a lender to an owner on, before or after the date of issuance of the policy if:(A)
The owner or the insured receives on the date of the premium finance loan a guarantee of a future life settlement value of the policy; or(B)
The owner or the insured agrees on the date of the premium finance loan to sell the policy or any portion of its death benefit on any date following the issuance of the policy.(d)
“Life settlement contract” does not include:(A)
A policy loan or accelerated death benefit made by the insurer pursuant to the policy’s terms;(B)
Loan proceeds that are used solely to pay:(i)
Premiums for the policy; or(ii)
The costs of the loan, including, without limitation, interest, arrangement fees, utilization fees and similar fees, closing costs, legal fees and expenses, trustee fees and expenses and third party collateral provider fees and expenses, including fees payable to letter of credit issuers;(C)
A loan made by a bank or other licensed financial institution in which the lender takes an interest in a life insurance policy solely to secure repayment of a loan or, if there is a default on the loan and the policy is transferred, the transfer of such a policy by the lender. However, neither the default itself nor the transfer of the policy in connection with a default may occur pursuant to an agreement or understanding with any other person for the purpose of evading regulation under ORS 744.318 (Definitions for ORS 744.318 to 744.384) to 744.384 (Rules), 744.991 (Criminal penalties) and 744.992 (Civil penalties);(D)
A premium finance loan made by a lender that does not violate the provisions of ORS 746.405 (Definitions for ORS 746.405 to 746.530) to 746.530 (Attorney fees), if the premium finance loan is not described in paragraph (c) of this subsection;(E)
An agreement in which all the parties are closely related to the insured by blood or law or have a lawful substantial economic interest in the continued life, health and bodily safety of the person insured, or are trusts established primarily for the benefit of such parties;(F)
Any designation, consent or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee;(G)
A legitimate business succession planning arrangement:(i)
Between one or more shareholders in a corporation or between a corporation and one or more of its shareholders or one or more trusts established by its shareholders;(ii)
Between one or more partners in a partnership or between a partnership and one or more of its partners or one or more trusts established by its partners; or(iii)
Between one or more members in a limited liability company or between a limited liability company and one or more of its members or one or more trusts established by its members;(H)
An agreement entered into by a service recipient, or a trust established by the service recipient and a service provider, or a trust established by the service provider, who performs significant services for the service recipient’s trade or business; or(I)
Any other contract, transaction or arrangement exempted from the definition of life settlement contract by the director based on a determination that the contract, transaction or arrangement is not of the type intended to be regulated by ORS 744.318 (Definitions for ORS 744.318 to 744.384) to ORS 744.384 (Rules), 744.991 (Criminal penalties) and 744.992 (Civil penalties).(9)
“Life settlement investment agent” means a person who is an appointed or contracted agent of a licensed life settlement provider who solicits or arranges the funding for the purchase of a life settlement by a life settlement purchaser and who is acting on behalf of a life settlement provider.(10)
Intentionally left blank —Ed.(a)
“Life settlement provider” means a person, other than an owner, that enters into or effectuates a life settlement contract with an owner resident in this state.(b)
“Life settlement provider” does not include:(A)
A bank, savings bank, savings and loan association, credit union or other licensed lending institution that takes an assignment of a life insurance policy solely as collateral for a loan;(B)
A premium finance company making premium finance loans and exempted by the director from the licensing requirement under ORS 746.405 (Definitions for ORS 746.405 to 746.530) to 746.530 (Attorney fees) that takes an assignment of a life insurance policy solely as collateral for a loan;(C)
The issuer of the life insurance policy;(D)
An insurer certified under ORS 731.354 (Certificate of authority required) or accredited under ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer) that provides stop loss coverage or financial guaranty insurance to a life settlement provider, purchaser, financing entity, special purpose entity or related provider trust;(E)
An individual 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;(F)
A financing entity;(G)
A special purpose entity;(H)
A related provider trust;(I)
A life settlement purchaser; or(J)
Any other person that the director determines is not the type of person intended to be covered by the definition of “life settlement provider.”(11)
“Life settlement purchase agreement” means a contract or agreement, entered into by a life settlement purchaser and 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.(12)
Intentionally left blank —Ed.(a)
“Life settlement purchaser” means a person who, to derive an economic benefit:(A)
Provides a sum of money as consideration for a life insurance policy or an interest in the death benefits of a life insurance policy; or(B)
Owns or acquires or is entitled to a beneficial interest in a trust that owns a life settlement contract or is the beneficiary of a life insurance policy that has been or will be the subject of a life settlement contract.(b)
“Life settlement purchaser” does not include:(A)
A licensee under ORS 744.321 (Life settlement providers), 744.323 (Life settlement brokers) or 744.324 (Life settlement investment agents);(B)
An accredited investor or qualified institutional buyer as defined in Rule 501(a) or Rule 144A promulgated under the Federal Securities Act of 1933, as amended;(C)
A financing entity;(D)
A special purpose entity; or(E)
A related provider trust.(13)
Intentionally left blank —Ed.(a)
“Owner” means the owner of a life insurance policy or a certificate holder under a group policy who resides in this state and enters or seeks to enter into a life settlement contract. For the purposes of ORS 744.318 (Definitions for ORS 744.318 to 744.384) to 744.384 (Rules), 744.991 (Criminal penalties) and 744.992 (Civil penalties), an owner shall not be limited to an owner of a life insurance policy or a certificate holder under a group policy insuring the life of an individual with a terminal or chronic illness or condition except when specifically addressed. If there is more than one owner on a single policy and the owners are residents of different states, the transaction shall be governed by the law of the state in which the owner having the largest ownership percentage resides or, if the owners hold equal ownership, the state of residence of one owner agreed upon in writing by all the owners.(b)
“Owner” does not include:(A)
A licensee under ORS 744.321 (Life settlement providers), 744.323 (Life settlement brokers) or 744.324 (Life settlement investment agents), including a life insurance producer acting as a life settlement broker under ORS 744.323 (Life settlement brokers);(B)
A qualified institutional buyer as defined in Rule 144A promulgated under the Federal Securities Act of 1933, as amended;(C)
A financing entity;(D)
A special purpose entity; or(E)
A related provider trust.(14)
“Policy” means an individual or group policy, group certificate, contract or arrangement of life insurance owned by a resident of this state, regardless of whether delivered or issued for delivery in this state.(15)
“Related provider trust” means a trust established by a licensed life settlement provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction.(16)
“Settled policy” means a life insurance policy or certificate that has been acquired by a life settlement provider pursuant to a life settlement contract.(17)
“Special purpose entity” means a corporation, partnership, trust, limited liability company or other similar entity formed solely to provide either direct or indirect access to institutional capital markets:(a)
For a financing entity or licensed life settlement provider;(b)
In connection with a transaction in which the securities in the special purpose entity are acquired by the owner or by qualified institutional buyers as defined in Rule 144 promulgated under the Securities Act of 1933, as amended; or(c)
In connection with a transaction in which the securities pay a fixed rate of return commensurate with established asset-backed institutional capital markets.(18)
Intentionally left blank —Ed.(a)
“Stranger-originated life insurance” means a practice or a plan to initiate a life insurance policy for the benefit of a third party investor who, at the time of policy origination, has no insurable interest in the insured. Such practices include but are not limited to cases in which life insurance is purchased with resources or guarantees from or through a person or entity who, at the time of policy inception, could not lawfully initiate the policy, and for which, at the time of policy inception, there is an arrangement or agreement, whether verbal or written, to directly or indirectly transfer the ownership of the policy or the policy benefits to a third party.(b)
Trusts that are created to give the appearance of insurable interest, and are used to initiate policies for investors, are considered stranger-originated life insurance arrangements.(c)
Stranger-originated life insurance arrangements do not include those practices set forth in subsection (8)(d) of this section.(19)
“Terminally ill” means having an illness or sickness that can reasonably be expected to result in death in 24 months or less. [2009 c.711 §2]
Source:
Section 744.318 — Definitions for ORS 744.318 to 744.384, https://www.oregonlegislature.gov/bills_laws/ors/ors744.html.
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