Issuers of viatical or life settlement investment contracts may register the securities or use any exemption from registration contained in the Arizona Securities Act for which the issuer or the securities qualify.  Effective July 18, 2000, A.R.S. § 44-1850 provides an exemption from registration designed specifically for viatical or life settlement investment contracts.

 

Exemption:  Under A.R.S. § 44-1850, issuers who enter into fewer than four viatical or life settlement investment contracts in any calendar year OR issuers who make the required disclosures to persons to whom they offer the securities and make the required filings with the Division are exempt from the registration requirements of A.R.S. § 44-1841.  Dealers and salesmen offering or selling viatical or life settlement investment contracts are subject to the registration requirements of §44-1842, an issuer who engages in selling securities it issues is a dealer (A.R.S. §44-1901(9)).

Filing requirements:  (1)  At least ten days before use in Arizona, an issuer must file all advertising and sales materials that will be used in the offer or sale of the securities.  (2)  At least ten days before a sale of a viatical or life settlement investment contract in or from Arizona, and every twelve months after the initial filing date if the issuer continues to offer securities in or from Arizona, the issuer shall file a notice, a consent to service of process, and audited financial statements.

Form:  No specific form is required for the notice.  The notice must be signed by an authorized officer of the issuer, the signature must be notarized, and the notice must contain all of the following information:

Ø      The issuer’s name.

Ø      The issuer’s type of organization.

Ø      The state in which the issuer is organized.

Ø      The date the issuer intends to begin selling securities in or from Arizona.

Ø      The issuer’s principal business and mailing addresses.

Ø      A statement that the issuer is not prohibited pursuant to A.R.S. § 44-1850(E) from claiming the exemption.

Delivery of notice:  Forward the originally signed notice to Arizona Corporation Commission—Securities Division, 1300 West Washington Avenue, 3^rd Floor, Phoenix, Arizona 85007-2996.

Fee requirements:  No fee is required.

Rescission:  Under A.R.S. § 44-1850, a purchaser of a viatical or life settlement investment contract may rescind or cancel the contract at any time before the last to occur of the following:

·          Seven calendar days after the purchaser pays the issuer or the issuer’s agent.

·          Seven calendar days after the purchaser receives the required written disclosures.

Denial or revocation:  Under specified conditions, the Commission may deny or revoke the exemption. 

Qualification:  Issuers who meet any of the conditions specified in A.R.S. § 44-1850(E) may not rely on the exemption.