Texas Senate Bill SB1061

Texas 2015 - 84th Regular

Caption

Relating to the regulation of secondary market transactions related to the business of life settlements; providing penalties; authorizing fees.

Impact

The newly regulated framework established by SB1061 aims to bolster consumer protection while enabling transparency in transactions involving life settlements. This includes the stipulation that secondary providers may only engage in transactions with accredited investors, thus restricting access to less experienced investors. Additionally, the bill widens the scope for enforcement against fraudulent practices, laying out penalties for parties who knowingly engage in misleading or deceptive acts within the life settlement contracts and transactions. Through such measures, the bill seeks to enhance the integrity of the life settlement market in Texas and protect vulnerable policyholders.

Summary

SB1061 introduces regulations pertaining to secondary market transactions related to life settlements in Texas. The bill seeks to amend existing insurance laws to better protect consumers and prevent fraudulent activities within the life settlements market. One of the core elements includes enhancing definitions around key terms such as 'broker', 'provider', 'secondary provider', and 'investor', thereby clarifying the roles of various parties involved in life settlements. The bill also aims to ensure that individuals accessing life settlements are adequately informed about the implications and alternatives of entering such contracts.

Conclusion

Overall, SB1061 represents a significant shift in the regulatory landscape for life settlements in Texas. By instituting a clearer regulatory framework, the bill is poised to create a more secure environment for consumers looking to navigate the complexities of life settlements, potential financial benefits aside from traditional life insurance, and prevention of fraud in this sensitive market.

Contention

While proponents of SB1061 argue that the bill will establish stricter controls and support ethical practices in the industry, there are concerns raised by certain stakeholders about the potential for increased costs and decreased accessibility to life settlements for consumers who may need them. Critics claim that the additional regulatory burden on secondary providers may lead to higher fees that could ultimately impact policyholders. Furthermore, the restrictions placed on who can engage in these transactions may limit options for those in need of alternative financial strategies in challenging times.