                                 CODE OF VIRGINIA

DEFINITIONS (§ 38.2-6000)

As used in this chapter:		&#8220;Advertising&#8221; 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
sell a life insurance policy pursuant to a viatical settlement
contract.		&#8220;Business of viatical settlements&#8221; 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, or
hypothecating in any other manner, of viatical settlement contracts or purchase
agreements.		&#8220;Chronically ill&#8221; means (i) being unable to perform at
least two activities of daily living, which shall include eating, toileting,
transferring, bathing, dressing or continence, (ii) requiring substantial
supervision by another person to protect the individual from threats to health
and safety due to severe cognitive impairment, or (iii) having a level of
disability similar to that described in clause (i) as determined by the federal
Secretary of Health and Human Resources.		&#8220;Financing entity&#8221; means
an underwriter, placement agent, lender, purchaser of securities, purchaser of a
policy or certificate from a viatical settlement provider, credit enhancer, or
any entity that has a direct ownership in a policy or certificate that is the
subject of a viatical settlement contract, but whose principal activity related
to the transaction is providing funds to effect the viatical settlement or
purchase of one or more viaticated policies and who has an agreement in writing
with one or more licensed viatical settlement providers to finance the
acquisition of viatical settlement contracts. Financing entity does not include
a non-accredited investor or viatical settlement purchaser.		&#8220;Fraudulent
viatical settlement act&#8221; includes:

1. Acts or omissions committed by any person who, knowingly or with intent to
defraud, for the purpose of depriving another of property or for pecuniary gain,
commits or permits its employees or its agents to engage in acts including:
			a. Presenting, causing to be presented or preparing with knowledge or belief
that it will be presented to or by a viatical settlement provider, viatical
settlement broker, viatical settlement purchaser, financing entity, insurer,
insurance producer, or any other person, false material information, or
concealing material information, as part of, in support of, or concerning a fact
material to one or more of the following: (i) an application for the issuance of
a viatical settlement contract or insurance policy; (ii) the underwriting of a
viatical settlement contract or insurance policy; (iii) a claim for payment or
benefit pursuant to a viatical settlement contract or insurance policy; (iv)
premiums paid on an insurance policy; (v) payments and changes in ownership or
beneficiary made in accordance with the terms of a viatical settlement contract,
or insurance policy; (vi) the reinstatement or conversion of an insurance
policy; (vii) in the solicitation, offer, effectuation or sale of a viatical
settlement contract or insurance policy; (viii) the issuance of written evidence
of a viatical settlement contract or insurance policy; or (ix) a financing
transaction;			b. Employing any device, scheme, or artifice to defraud related
to viaticated policies;

2. In the furtherance of a fraud or to prevent the detection of a fraud any
person commits or permits its employees or its agents to: (i) remove, conceal,
alter, destroy, or sequester from the Commission the assets or records of a
licensee or other person engaged in the business of viatical settlements; (ii)
misrepresent or conceal the financial condition of a licensee, financing entity,
insurer, or other person; (iii) transact the business of viatical settlements in
violation of laws requiring a license, certificate of authority, or other legal
authority for the transaction of the business of viatical settlements; or (iv)
file with the Commission or the chief insurance regulatory official of another
jurisdiction a document containing false information or otherwise conceals
information about a material fact from the Commission;

3. Embezzlement, theft, misappropriation or conversion of moneys, funds,
premiums, credits, or other property of a viatical settlement provider, insurer,
insured, viator, insurance policyowner, or any other person engaged in the
business of viatical settlements or insurance;

4. Recklessly entering into, brokering, or otherwise dealing in a viatical
settlement contract, the subject of which is a life insurance policy that was
obtained by presenting false information concerning any fact material to the
policy or by concealing, for the purpose of misleading another, information
concerning any fact material to the policy, where the viator or the
viator&#8217;s agent intended to defraud the policy&#8217;s issuer.
&#8220;Recklessly&#8221; means engaging in the conduct in conscious and clearly
unjustifiable disregard of a substantial likelihood of the existence of the
relevant facts or risks, such disregard involving a gross deviation from
acceptable standards of conduct; or

5. Attempting to commit, assisting, aiding or abetting in the commission of, or
conspiracy to commit the acts or omissions specified in this subsection.
			&#8220;Licensee under this chapter&#8221; means a person licensed by the
Commission as a viatical settlement provider or viatical settlement
broker.			&#8220;NAIC&#8221; means National Association of Insurance
Commissioners.			&#8220;Policy&#8221; means an individual or group policy, group
certificate, contract or arrangement of life insurance affecting the rights of a
resident of this Commonwealth or bearing a reasonable relation to this
Commonwealth, regardless of whether delivered or issued for delivery in this
Commonwealth.			&#8220;Related provider trust&#8221; means a titling trust or
other trust established by a licensed viatical 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. 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
settlement transactions available to the Commission as if those records and
files were maintained directly by the licensed viatical settlement
provider.			&#8220;Special purpose entity&#8221; 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 financing entity or licensed viatical settlement
provider.			&#8220;Terminally ill&#8221; means having an illness or sickness
that can reasonably be expected to result in death in 24 months or
less.			&#8220;Viatical settlement broker&#8221; means a person that on behalf
of another and for a fee, commission or other valuable consideration introduces
viators to viatical settlement providers, or offers or attempts to negotiate
viatical settlement contracts between a viator and one or more viatical
settlement providers. A viatical settlement broker may act as agent for a
viatical settlement provider or on behalf of the viator, provided that a
viatical settlement broker shall not be deemed to act exclusively for the viator
unless, pursuant to written agreement between the parties, the broker agrees (i)
to disclose fully all interests in the viatical settlement contract and
relationships with the viatical settlement provider, including its affiliates
and appointed or contracted agents, and (ii) that compensation for services as a
viatical settlement broker shall be paid directly and only by the viator. The
term does not include an attorney, certified public accountant, or a financial
planner accredited by a nationally recognized accreditation agency, who is
retained to represent the viator and whose compensation is not paid directly or
indirectly by the viatical settlement provider or viatical settlement
purchaser.			&#8220;Viatical settlement contract&#8221; 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 viator&#8217;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
settlement contract also includes a contract for a loan or other financing
transaction with a viator secured primarily by an individual or group life
insurance policy, 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 settlement contract includes an agreement with a viator to
transfer ownership or change the beneficiary designation at a later date
regardless of the date that compensation is paid to the viator. &#8220;Viatical
settlement contracts&#8221; do not include accelerated benefits provisions
contained in life insurance policies, whether issued with the original policy or
as a rider, according to the regulations promulgated by the
Commission.			&#8220;Viatical settlement provider&#8221; means a person, other
than a viator, that enters into or effectuates a viatical settlement contract.
Viatical settlement provider does not include: (i) 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; (ii)
the issuer of a life insurance policy providing accelerated benefits under
&#xA7; 38.2-3115.1 and pursuant to the contract; (iii) an authorized or eligible
insurer that provides stop loss coverage to a viatical settlement provider,
viatical settlement purchaser, financing entity, special purpose entity or
related provider trust; (iv) 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; (v) a financing
entity; (vi) a special purpose entity; (vii) a related provider trust; (viii) a
viatical settlement purchaser; or (ix) 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 purchases a
viaticated policy from a viatical settlement provider and does not communicate
with the viator or insured who is a resident of this Commonwealth except through
a licensee under this chapter.			&#8220;Viatical settlement purchaser&#8221;
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 settlement contract or is the beneficiary of a life
insurance policy that has been or will be the subject of a viatical settlement
contract, for the purpose of deriving an economic benefit. Viatical settlement
purchaser does not include (i) a licensee under this chapter; (ii) 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;
(iii) a financing entity; (iv) a special purpose entity; or (v) a related
provider trust.			&#8220;Viaticated policy&#8221; means a life insurance policy
or certificate that has been acquired by a viatical settlement provider pursuant
to a viatical settlement contract.			&#8220;Viator&#8221; means the owner of a
life insurance policy or a certificate holder under a group policy who enters or
seeks to enter into a viatical settlement contract. For the purposes of this
chapter and the application of Article 6.1 (&#xA7; 38.2-1865.1 et seq.) of
Chapter 18 of this title, a viator 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 except where specifically
addressed. Viator does not include (i) a licensee under this chapter; (ii) 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; (iii) a financing entity; (iv) a special purpose entity; or (v) a
related provider trust.

HISTORY: 1997, c. 814, § 38.2-5700; 2003, c. 717.