38.2-6011 - Fraud prevention and control.
§ 38.2-6011. Fraud prevention and control.
A. A person shall not commit a fraudulent viatical settlement act. A personshall not knowingly or intentionally interfere with the enforcement of theprovisions of this chapter or Article 6.1 (§ 38.2-1865.1 et seq.) of Chapter18 of this title or investigations of suspected or actual violations of thischapter or Article 6.1 (§ 38.2-1865.1 et seq.) of Chapter 18 of this title. Aperson in the business of viatical settlements shall not knowingly orintentionally permit any person convicted of a felony involving dishonesty orbreach of trust to participate in the business of viatical settlements.
B. Viatical settlement contracts and applications for viatical settlements,regardless of the form of transmission, shall contain the following statementor a substantially similar statement: "Any person who knowingly presentsfalse information in an application for insurance or viatical settlementcontract may be guilty of a crime and subject to prosecution." The lack ofthe required statement does not constitute a defense in any prosecution for afraudulent viatical settlement act.
C. Any person engaged in the business of viatical settlements havingknowledge or a reasonable belief that a fraudulent viatical settlement act isbeing, will be, or has been committed shall provide to the Commission theinformation required by, and in a manner prescribed by, the Commission. Anyother person having knowledge or a reasonable belief that a fraudulentviatical settlement act is being, will be, or has been committed may provideto the Commission the information required by, and in a manner prescribed by,the Commission.
D. This chapter shall not:
1. Preempt the authority or relieve the duty of other law enforcement orregulatory agencies to investigate, examine, and prosecute suspectedviolations of law;
2. Prevent or prohibit a person from disclosing voluntarily informationconcerning viatical settlement fraud to a law enforcement or regulatoryagency other than the insurance department; or
3. Limit the powers granted elsewhere by the laws of this Commonwealth to theCommission or an insurance fraud unit to investigate and examine possibleviolations of law and to take appropriate action against wrongdoers.
E. A licensee under this chapter shall within 60 days of licensure andannually thereafter by March 1 of each year certify to the Commissionimplementation of anti-fraud initiatives reasonably calculated to detect,prosecute, and prevent fraudulent viatical settlement acts. Anti-fraudinitiatives shall include:
1. Fraud investigators, who may be viatical settlement providers or viaticalsettlement broker employees or independent contractors; and
2. An anti-fraud plan, which shall include, but not be limited to:
a. A description of the procedures for detecting and investigating possiblefraudulent viatical settlement acts and procedures for resolving materialinconsistencies between medical records and insurance applications;
b. A description of the procedures for reporting possible fraudulent viaticalsettlement acts to the Commission;
c. A description of the plan for anti-fraud education and training ofunderwriters and other personnel; and
d. A description or chart outlining the organizational arrangement of theanti-fraud personnel who are responsible for the investigation and reportingof possible fraudulent viatical settlement acts and investigating unresolvedmaterial inconsistencies between medical records and insurance applications.
F. Anti-fraud plans submitted to or obtained by the Commission and in thecontrol or possession of the Commission shall be privileged and confidential,shall not be subject to inspection or review by the general public, shall notbe subject to subpoena, and shall not be subject to discovery or admissiblein evidence in any private civil or criminal action. However, the Commissionis authorized to use the anti-fraud plans in the furtherance of anyregulatory or legal action brought as a part of the Commission's duties.
(2003, c. 717.)