KRS 304.15-716: Violation due to time of contract -- Conditions -- Procedure --

Satisfaction of requirements.

(1) It is a violation of this subtitle for a person to enter into a life settlement contract at

any time prior to, or at the time of application for, issu ance of a policy, or within a

two (2) year period commencing with the date of issuance of the policy unless the

owner certifies to the life settlement provider that one (1) or more of the following

conditions has been met within the two (2) year period:

(a) The policy was issued upon the owner's exercise of conversion rights arising

out of a group or individual policy, if the total of the time covered under the

conversion policy plus the time covered under the prior policy is at least

twenty-four (24) month s. The time covered under a group policy shall be

calculated without regard to a change in insurance carriers, if the coverage has

been continuous and under the same group sponsorship; or

(b) The owner submits independent evidence to the life settlement pr ovider that

one (1) or more of the following conditions has been met within the two (2)

year period:

1. The owner or insured is terminally or chronically ill;

2. The owner or insured disposes of his ownership interests in a closely

held corporation, pursua nt to the terms of a buyout or other similar

agreement in effect at the time the insurance policy was initially issued;

3. The owner's spouse dies;

4. The owner divorces his or her spouse;

5. The owner retires from full-time employment;

6. The owner become s physically or mentally disabled and a physician

determines that the disability prevents the owner from maintaining full -

time employment; or

7. A final order, judgment, or decree is entered by a court of competent

jurisdiction, on the application of the c reditor of the owner, adjudicating

the owner bankrupt or insolvent, or approving a petition seeking

reorganization of the owner or appointing a receiver, trustee, or

liquidator to all or a substantial part of the owner's assets.

(2) Copies of the independe nt evidence described in subsection (1) of this section and

the documents required by KRS 304.15 -710 shall be submitted to the insurer when

the life settlement provider submits a request to the insurer for verification of

coverage. The copies shall be acco mpanied by a letter of attestation from the life

settlement provider that the copies are true and correct copies of the documents

received by the life settlement provider.

(3) If the life settlement provider submits to the insurer a copy of independent evi dence

provided for in subsection (2) of this section when the life settlement provider

submits a request to the insurer to effect the transfer of the policy to the life

settlement provider, the copy shall be deemed to conclusively establish that the life

settlement contract satisfies the requirements of this section and the insurer shall

respond timely to the request.