S.D. Admin. R. 20:08:07:31 - Viatical settlements

(1) Viatical settlements: Pursuant to SDCL 47-31B-102(28), viatical settlements are defined as securities. Viatical settlements are hereinafter referred to as "viatical investments." All persons involved in the offer and/or sale of viatical investments are subject to the registration and antifraud provisions of SDCL chapter 47-31 B.

(2) The standards contained in the NASAA "Guidelines Regarding Viatical Investments" ("Guidelines") as of May 1, 2004, including the definitions, are incorporated herein by reference and apply to the offer and sale of viatical investments the proceeds of which primarily finance the purchase of life insurance policies from viators. These guidelines do not apply to investments in a pool of life insurance policies, as those offerings are covered by existing registration guidelines. Applications not conforming to the standards contained herein shall be looked upon with disfavor. However, the director shall review such documents based on full disclosure and may allow waivers or exceptions from certain standards under these guidelines.

(3) Prior to the first offer or sale of a viatical investment in this state, the issuer must file with the division the following completed documents according to the NASAA Guidelines:

(a). A document that shows compliance with NASAA Guideline Section II "Requirements of the viatical issuer."

(b). A document that shows compliance with NASAA Guideline Section III "Suitability of Participants."

(c). A document that shows compliance with NASAA Guideline Section IV "Escrow Requirements."

(d). A document that shows compliance with NASAA Guideline V(B) "Compensation."

(e). A document that shows compliance with NASAA Guideline VIII "Offering Circular."

(f). A document that shows the issuers' intent to comply with NASAA Guideline IX "Post Sale Disclosure."

(g). A signed Form U-2, Uniform Consent to Service of Process.

(h). The fee as set forth in SDCL 47-31B-203.

(4) The filing required in section (3) of this rule is effective one year from the date of approval by the division. The director must be notified in writing of an occurrence of any material change in the information on file with the director within 30 days after the occurrence of the material change.

(5) Viatical investments can only be sold through a registered agent of a registered broker-dealer or by an agent of the issuer in compliance with § 20:08:03:01(4), except that the agent must show proof that the applicant has passed the series 63 and the series 7 examinations.

Notes

S.D. Admin. R. 20:08:07:31

30 SDR 211, effective July 1, 2004.

General Authority: SDCL 47-31B-605(a)(1) to (3), inclusive, 47-31B-605(b).

Law Implemented: SDCL 47-31B-203.

Note: The NASAA guidelines and statements of policy can be located at www.nasaa.org under NASAA corporate finance.