SB445 Alabama 2010 Session

Summary

Primary Sponsor

Rodger SmithermanSenator

Democrat

Co-Sponsor

Bobby D. Singleton

Session

Regular Session 2010

Title

Life settlement contracts, providers, licensure and regulation, enforcement by Commissioner of Insurance Department, criminal and civil penalties, Life Settlements Act

Summary

SB445 creates a Life Settlements Act to license and regulate life settlement contract providers and brokers, require filing and disclosure, and establish enforcement to protect policy owners.

What This Bill Does

It licenses providers and brokers, sets licensing requirements, renewal terms, and fees, and gives the Commissioner authority to suspend, revoke, or refuse licenses and to examine licensees. It requires life settlement contracts and related purchase agreements to be filed with and approved by the Commissioner, along with annual reports; it also governs advertising, disclosures, and the forms used in these contracts. It authorizes rules to regulate all parties involved, imposes criminal and civil penalties for violations, and includes consumer protections such as owner disclosures, rescission rights, buyer education, anti‑fraud measures, confidentiality, and procedures around premium financing and STOLI to curb abusive practices.

Who It Affects

• Life settlement owners/insureds would receive clearer disclosures, access to information about alternatives, rescission rights, and protections against misleading marketing.
• Providers and brokers, insurers, and financing entities would face licensure and renewal requirements, mandated disclosures and advertising rules, annual reporting, examinations, anti-fraud obligations, and potential penalties for violations.

Key Provisions

• Licensing of life settlement providers and brokers, with defined qualifications, fees, and renewal terms; recognition of certain nonresident licensing conditions.
• Mandatory filing and Commissioner approval of life settlement contracts and purchase agreements; annual statements; ongoing ability of the Commissioner to examine licensees and demand records.
• Clear advertising and disclosure requirements, signed owner disclosures, and prohibition of misleading marketing practices; obligation to provide a buyer’s guide and to disclose affiliations between providers and brokers.
• Definitions of key terms (owner, life settlement contract, STOLI, financing entity, related provider trust, etc.) and rules governing cross‑state use and governing law when multiple owners reside in different states.
• Prohibitions and anti‑fraud measures, including provisions to deter fraudulent life settlement acts, mandatory anti‑fraud plans, and confidentiality protections for investigation materials.
• Owner protections including disclosure of alternatives (such as accelerated benefits and tax implications), rescission rights within a set period, and required notices to insurers and escrow/trust arrangements for proceeds.
• Premium financing controls and verification of coverage; disclosures to applicants/insureds about financing, ownership changes, and potential tax or beneficiary consequences; requirements to obtain consent and independent evidence when needed.
• Enforcement tools such as injunctions, cease‑and‑desist orders, civil penalties up to $10,000 per violation, potential license revocation for fraudulent activity, and transition provisions for existing practitioners.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Life Settlement Contracts