Title 3 . Commerce, Community, and Economic Development

Chapter 31 . Miscellaneous

Section 405. Unfair trade practices

3 AAC 31.405. Unfair trade practices

(a) A person may not commit or participate directly or indirectly in an unfair trade practice involving a viatical settlement transaction.

(b) The director may investigate a suspected unfair trade practice involving a viatical settlement transaction or a person engaged in a viatical settlement transaction and assess a penalty, consistent with AS 21.36.32, for an unfair trade practice involving a viatical settlement transaction.

(c) A person may not knowingly or intentionally interfere with the enforcement of or an investigation of a suspected or actual violation of AS 21.89.110 or 3 AAC 31.300 - 3 AAC 31.449.

(d) A person may not knowingly or intentionally engage directly or indirectly in a viatical settlement transaction with a person convicted of a felony involving dishonesty or breach of trust.

(e) An unfair trade practice is committed by a person

(1) engaged in a viatical settlement transaction in the state relative to a subject resident, located or to be performed in this state who

(A) places or causes to be placed a viatical settlement contract from or through a person not licensed under AS 21.89.110 ;

(B) pays a commission or other form of remuneration to a person, firm, or organization for placing a viatical settlement contract when the person, firm, or organization is not licensed under AS 21.89.110 ; or

(C) acts as a viatical settlement provider, viatical settlement broker, or viatical settlement representative without being licensed under AS 21.89.110 ; or

(2) who

(A) with intent to injure, defraud, or deceive, knowingly makes a false or fraudulent statement or representation or conceals information in or with reference to

(i) an application for a viatical settlement contract;

(ii) underwriting of a viatical settlement contract;

(iii) claim for payment of benefit under a viatical settlement contract;

(iv) premiums paid on an insurance policy under a viatical settlement contract;

(v) payment and changes in ownership or beneficiary made in accordance with the terms of the viatical settlement contract and life insurance policy;

(vi) reinstatement or conversion of a life insurance policy;

(vii) a solicitation, offer, effectuation, or sale of a viatical settlement contract;

(viii) the issuance of evidence of a viatical settlement contract; or

(ix) a viatical settlement financing transaction;

(B) viaticates or attempts to viaticate a life insurance policy fraudulently obtained by an insured, owner of the life insurance policy, or agent of the insured or owner of the life insurance policy;

(C) makes a false, sworn statement that the person does not believe to be true regarding a matter material to an examination, investigation, or hearing of the division involving a viatical settlement transaction;

(D) in a matter material to an examination, investigation, or hearing by the division involving a viatical settlement transaction, makes two or more sworn statements that are irreconcilably inconsistent to the degree that one of them is necessarily false and the person does not believe one of the statements to be true at the time the statement is made;

(E) with intent to deceive, knowingly exhibits a false account, document, or advertisement relative to the affairs of a viatical settlement provider or viatical settlement broker;

(F) wrongfully removes, conceals, alters, destroys, or sequesters from the director the assets or records relating to a viatical settlement transaction, or attempts to remove records relating to a viatical settlement transaction from the place they are required to be kept under 3 AAC 31.425;

(G) falsely makes, completes, or alters a viatical settlement contract or other document relating to a viatical settlement transaction;

(H) knowingly possesses a forged viatical settlement contract or other document viatical settlement transaction;

(I) knowingly enters into a forged viatical settlement contract or other document related to a viatical settlement transaction;

(J) misrepresents or conceals the financial condition of a licensee, insurer, or other person;

(K) embezzles, steals, misappropriates, or converts monies, funds, premiums, credits, or other property of a viator, insured, insurer, viatical settlement provider, or other person involved in a viatical settlement transaction; or

(L) discriminates in the making or solicitation of a viatical settlement contract on the basis of race, age, sex, national origin, creed, religion, occupation, marital or family status, or sexual orientation, or discriminates between viators with or without dependents.

(f) A viatical settlement provider or a viatical settlement broker shall develop and implement antifraud initiatives to detect, prosecute, and prevent a fraudulent act involving a viatical settlement transaction, including

(1) obtaining services of a fraud investigator through employment or by contract; and

(2) developing an antifraud plan that includes

(A) a description of the procedures for detecting and investigating a possible fraudulent act involving a viatical settlement transaction and procedures for resolving material inconsistencies between medical records and insurance applications;

(B) a description of the plan for antifraud education and training of personnel; and

(C) a chart outlining the organizational arrangement of the antifraud personnel who are responsible for the investigation and reporting of a possible fraudulent act involving a viatical settlement transaction and investigating unresolved material inconsistencies between medical records and insurance transactions.

(g) An act by a person or by the person's employee appointed or authorized to represent a viatical settlement broker or viatical settlement provider is considered an act of the person who appointed or authorized the person or the person's employee.

History: Eff. 8/25/2002, Register 163

Authority: AS 21.06.090

AS 21.36.320

AS 21.89.110