Connecticut General Statutes
Chapter 700b - Life Insurance, Annuities, Burial Contracts and Life Settlements
Section 38a-465i. - Violations.

(a) It shall be a violation of this part for any person to:

(1) Enter into a life settlement contract if such person knows or reasonably should have known that the life insurance policy was obtained by means of a false, deceptive or misleading application for such policy;
(2) Engage in any transaction, practice or course of business if such person knows or reasonably should have known that the intent was to avoid the notice requirements of this section;
(3) Engage in any fraudulent act or practice in connection with any transaction relating to any settlement involving an owner who is a resident of this state;
(4) Issue, solicit, market or otherwise promote the purchase of an insurance policy for the purpose of or with the emphasis on settling the policy;
(5) Receive, if providing premium financing, any proceeds, fees or other consideration from the policy or policy owner that are in addition to the amounts required to pay principal, interest or any costs or expenses, which are reasonable in type and amount, incurred by the lender or borrower in connection with such premium finance agreement, except in the event of a default, provided neither default on such loan nor the transfer of the policy, in connection with such default, is pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this part. Any payments, charges, fees or other amounts received by a person or entity providing premium financing in violation of this subdivision shall be remitted to the original owner of the policy or to such owner's estate if said original owner is not living at the time of the determination of the overpayment;
(6) With respect to any settlement contract or insurance policy and a broker, to knowingly solicit an offer from, effectuate a life settlement contract with or make a sale to any provider, financing entity or related provider trust that is controlling, controlled by or under common control with such broker, unless such relationship is disclosed to the owner;
(7) With respect to any life settlement contract or insurance policy and a provider, to knowingly enter into a life settlement contract with an owner if, in connection with such life settlement contract, anything of value will be paid to a broker that is controlling, controlled by or under common control with such provider, financing entity or related provider trust that is involved in such settlement contract, unless such relationship is disclosed to the owner;
(8) With respect to a provider, to enter into a life settlement contract unless the life settlement promotional, advertising and marketing materials, as may be prescribed by regulation, have been filed with the commissioner. In no event shall any marketing materials expressly reference that the insurance is free for any period of time. The inclusion of any reference in the marketing materials that would cause an owner to reasonably believe the insurance is free for any period of time shall be considered a violation of this part; or
(9) With respect to any life insurance producer, insurance company, broker or provider, to make any statement or representation to the applicant or policyholder in connection with the sale or financing of a life insurance policy to the effect that the insurance is free or without cost to the policyholder for any period of time unless so provided in the policy.
(b) A violation of this section shall be deemed a fraudulent life settlement act, as specified in section 38a-465j.
(P.A. 97-202, S. 11, 18; P.A. 03-152, S. 8; P.A. 08-175, S. 10; P.A. 09-74, S. 22.)
History: P.A. 97-202 effective January 1, 1998; P.A. 03-152 deleted references to “viatical settlement agent” in Subsec. (a)(1) and (2), deleted “the provisions of” re chapter 54 in Subsec. (b), made technical changes in Subsecs. (b) and (d), added Subsec. (e) re contracts entered into within two-year period from date of issuance of policy, and added Subsec. (f) re satisfaction of requirements of section and the insurer's timely response to a request to transfer policy or certificate (Revisor's note: A semicolon at the end of Subsec. (e) was replaced editorially by the Revisors with a period for proper form); P.A. 08-175 replaced former Subsecs. (a) to (f) with new Subsecs. (a) and (b) re violations; P.A. 09-74 made a technical change in Subsec. (a)(5), effective May 27, 2009.

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