Subject of Possible Rule Making: Providing guidance on when a viatical settlement contract is a "security" pursuant to RCW 21.20.005(12).

     Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 21.20.450.

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: This rule would clarify when the offer and sale of a viatical settlement contract constitutes the offer and sale of a security under Washington law. This would help eliminate confusion amongst both sellers and purchasers of viatical settlement contracts.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: The Office of the Insurance Commissioner regulates the relationship between the viator and the viatical settlement provider. Other than the Securities Division, no other state agency regulates the sale of viatical settlement contracts to individual investors.

     Process for Developing New Rule: The rule will be developed based on an analysis of existing case law defining the term "security."

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by sending comments to Bill Beatty, Securities Division, P.O. Box 9033, Olympia, WA 98507-9033, voice (360) 902-8723, fax (360) 704-6928, e-mail bbeatty@dfi.wa.gov.

October 30, 2001

Deborah R. Bortner

Director of Securities

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