31A-36-113 - Fraud.
31A-36-113. Fraud.
(1) As used in this section, "recklessly" means engaging in conduct:
(a) when a person knows or should have known of a substantial likelihood of theexistence of the relevant facts or risks; and
(b) involving a significant deviation from acceptable standards of conduct.
(2) A person may not, knowingly or with intent to defraud, to deprive another of propertyor for pecuniary gain, do or permit its employees or agents to engage in any of the following acts:
(a) (i) present, cause to be presented or prepare with knowledge or belief that it will bepresented, false information to or by a life settlement provider or life settlement producer, afinancing entity, an insurer, a provider of insurance or any other person, or to concealinformation, as part of, in support of or concerning a fact material to:
(A) an application for the issuance of a policy or life settlement;
(B) the underwriting of a policy or life settlement;
(C) a claim for payment or other benefit under a policy or life settlement;
(D) a premium paid on a policy;
(E) a payment or change of beneficiary or ownership pursuant to a policy or lifesettlement;
(F) the reinstatement or conversion of a policy;
(G) the solicitation, offer, effectuation, or sale of a policy or life settlement;
(H) the issuance of written evidence of a policy or life settlement; or
(I) a financing transaction;
(ii) employ a device, scheme, or artifice to defraud in the business of life settlements;
(iii) enter into any plan or practice that involves stranger-originated life insurance; or
(iv) employ a device, scheme, or artifice resulting in a violation of Section 31A-21-104in the solicitation, application, or issuance of a policy that is the subject of a life settlement;
(b) in furtherance of a fraud or to prevent detection of a fraud:
(i) remove, conceal, alter, destroy, or sequester from the commissioner assets or recordsof a person engaged in the business of life settlements;
(ii) misrepresent or conceal the financial condition of a licensee, a financing entity, aninsurer, or other person;
(iii) transact the business of life settlements in violation of this chapter; or
(iv) file with the commissioner or analogous officer of another jurisdiction a documentcontaining false information or otherwise conceal information about a material fact from thecommissioner or analogous officer;
(c) embezzle, steal, misappropriate, or convert money, premiums, credits, or otherproperty of a life settlement provider, an owner, an insurer, an insured, an owner of a policy, orother person engaged in the business of life settlements or insurance;
(d) recklessly enter into, negotiate, or otherwise deal in a life settlement, the subject ofwhich is a policy obtained when one or more persons intend to defraud the policy's issuer, the lifesettlement provider, or the owner by:
(i) presenting false information concerning a fact material to the policy; or
(ii) concealing, to mislead another, information concerning a fact material to the policy;
(e) facilitate a change of the state or jurisdiction of ownership of a policy or the state ofresidency of an owner to a state or jurisdiction that does not have a law similar to this chapter forthe express purpose of evading or avoiding this chapter; or
(f) attempt to commit, assist, aid, abet, or conspire to commit an act or omissiondescribed in this Subsection (2).
(3) A person may not knowingly or intentionally interfere with the enforcement of thischapter or an investigation of a possible violation of this chapter.
(4) A person engaged in the business of life settlements may not knowingly orintentionally permit a person convicted of a felony involving dishonesty or breach of trust toparticipate in the business of life settlements.
(5) (a) An application or contract for a life settlement, however transmitted, shall containthe following or a substantially similar statement: "A person that knowingly presents falseinformation in an application for insurance or a life settlement is guilty of a crime and may besubject to fines and confinement in prison."
(b) The lack of the statement described in Subsection (5)(a) is not a defense in aprosecution for violation of this section.
Amended by Chapter 355, 2009 General Session