Preproposal statement of inquiry was filed as WSR 11-17-128.
Title of Rule and Other Identifying Information: Licensure of life settlement providers.
Hearing Location(s): OIC Tumwater Office, Training Room 120, 5000 Capitol Boulevard, Tumwater, WA, http://www.insurance.wa.gov/about/directions.shtml, on November 22, 2011, at 10:00 a.m.
Date of Intended Adoption: November 29, 2011.
Submit Written Comments to: Kacy Scott, P.O. Box 40258, Olympia, WA 98504-0258, e-mail email@example.com, fax (360) 586-0139, by November 21, 2011.
Assistance for Persons with Disabilities: Contact Lorrie [Lorie] Villaflores by November 21, 2011, TTY (360) 586-0241 or (360) 725-7087.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: This proposed rule replaces the requirement for submission of fingerprint cards of the directors, officers, and significant shareholders of domestic life settlement applicants with a requirement to provide third party verification reports from an acceptable vendor.
Reasons Supporting Proposal: Based upon the use of these verifications with foreign insurer expansion applications, we believe the change will provide for more thorough and quicker verifications. The proposed rules also coordinate the life settlement provider requirements with those for insurers, resulting in administrative savings.
Statutory Authority for Adoption: RCW 48.02.060 and 48.102.170.
Statute Being Implemented: Chapter 48.102 RCW.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Mike Kreidler, insurance commissioner, governmental.
Name of Agency Personnel Responsible for Drafting: Kacy Scott, P.O. Box 40258, Olympia, WA 98504-0248 [98504-0258], (360) 725-7041; Implementation: Jim Odiorne, P.O. Box 40255, Olympia, WA 98504-0255, (360) 725-7214; and Enforcement: Carol Sureau, P.O. Box 40255, Olympia, WA 98504-0255, (360) 725-7050.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The only businesses affected by this proposed rule are domestic applicants to be licensed as life settlement providers; there are currently no domestic applicants for these licenses. In addition, the increased cost of meeting this proposed new licensing requirement is less than 0.3 percent of the average Washington revenue of the smallest companies in this line of business. Therefore a small business economic impact statement is not required for this proposed rule.
A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Kacy Scott, P.O. Box 40258, Olympia, WA 89504-0258, phone (360) 725-7041, fax (360) 586-3109.
October 19, 2011
AMENDATORY SECTION(Amending Matter No. R 2009-14, filed 1/27/10, effective 2/27/10)
WAC 284-97-020 Licensing requirements for life settlement providers. (1) The application form and instructions for obtaining a license as a life settlement provider are on the commissioner's web site at www.insurance.wa.gov.
(2) The application for a license as a life settlement provider shall furnish all of the applicable following information:
(a) The name of the applicant, its address, and organizational structure.
(b) Copies of its organizational documents, including but not limited to its: Articles of incorporation and any amendments thereto, certificate of incorporation and any amendments thereto, bylaws and any amendments thereto, partnership agreement and any amendments thereto, articles of association and any amendments thereto, certificate of formation of a limited liability company and any amendments thereto, and limited liability company agreement and any amendments thereto.
(c) The identity of all: Stockholders holding ten percent or more of the voting securities; investors holding a ten percent or greater interest; partners; corporate officers; trustees; if an association, all of the members; all of the members of a limited liability company; and parent and affiliate entities, together with a chart showing the relationship of the applicant to any parent, affiliated or subsidiary entities.
(d) A list of all stockholders holding ten percent or more of the voting securities, investors holding a ten percent or greater interest, partners, and officers of any parent or affiliate entities.
(e) Biographical affidavits of all its officers, directors, investors holding a ten percent or greater interest, partners, members of a limited liability company, and members (if an association).
(f) For domestic life settlement providers, ((
cards of)) third-party verification reports from an acceptable
vendor for all its officers, directors, trustees, investors
holding a ten percent or greater interest, partners, members
of a limited liability company, and members (if an
association). A vendor is acceptable if registered with the
National Association of Insurance Commissioners' Uniform
Certificate of Authority Application (NAIC UCAA) registry.
(g) A list of states in which the life settlement provider is licensed on the date of application, a copy of each effective license, and a list of the states in which it is or was doing business.
(h) A list of all business licenses from the federal and any state government, which has been issued to the applicant, together with a certificate of incorporation from the Washington secretary of state, and a statement showing the current status of any such licenses, such as whether it has been revoked or suspended.
(i) A report stating whether any regulatory action, by any level of state or federal government, is pending or has been taken against the applicant or its officers, directors, trustees, investors holding a ten percent or greater interest, partners, members of a limited liability company, or members (if an association).
(j) A report stating whether any criminal action or civil action has been taken, or is pending, against the applicant or its officers, directors, trustees, investors holding a ten percent or greater interest, partners, members of a limited liability company, or members (if an association).
(k) A copy of its most recent financial and operating reports, audited and unaudited.
(l) Copies of documents filed with the federal Securities and Exchange Commission.
(m) A detailed plan of operations for the applicant's business, including but not limited to information regarding or identification of the following items in connection with the applicant's life settlement business:
(i) Escrow accounts and banks;
(ii) Advertising, brokerage, or distribution system to be used;
(iii) Marketing techniques to be used;
(iv) Marketing training program; and
(v) Contract offering and servicing facilities.
(n) For a nonresident provider, an appointment of the commissioner to receive service of process and a designation of the person to whom the commissioner shall forward legal process.
(o) A copy of the applicant's antifraud plan that meets the requirements of RCW 48.102.140.
(p) Such other information as the commissioner may reasonably require.
(3) To qualify for authority to transact business as a life settlement provider the applicant must possess unimpaired capital, and thereafter maintain unimpaired capital, in the amount of not less than one hundred fifty thousand dollars.
[Statutory Authority: RCW 48.02.060, 48.102.011, 48.102.046, 48.102.100, 48.102.170, 48.102.021, 48.102.041, and 48.102.080. 10-04-042 (Matter No. R 2009-14), § 284-97-020, filed 1/27/10, effective 2/27/10. Statutory Authority: RCW 48.02.060, 48.30.010 and 1995 c 161 §§ 2, 4, 5 and 10. 95-22-016 (Order R 95-2), § 284-97-020, filed 10/20/95, effective 11/20/95.]