1.1.................... moves to amend S.F. No. 166, the first unofficial engrossment, as
1.2follows:
1.3Page 1, line 17, after "not" insert "prohibited by section 60A.0785 or otherwise"
1.4Page 6, delete section 5 and insert:

1.5    "Sec. 5. [60A.0785] PROHIBITION: ENTRY INTO SETTLEMENT
1.6CONTRACTS.
1.7    Subdivision 1. Prohibition. No prospective purchaser of the policy from the insured
1.8shall, at any time prior to, or at the time of, the application for, or issuance of, a policy,
1.9or during a four-year period commencing with the date of issuance of the policy, enter
1.10into a settlement contract regardless of the date the compensation is to be provided and
1.11regardless of the date the assignment, transfer, sale, devise, bequest, or surrender of the
1.12policy is to occur, unless and until the prospective policy purchaser has determined, based
1.13on reasonable inquiry, which includes but is not limited to questioning the insured and
1.14reviewing the broker's files, that none of the following circumstances are present:
1.15    (1) there was an agreement or understanding, before issuance of the policy, between
1.16the insured, policyowner, or owner of a beneficial interest in the policy, and another person
1.17to guarantee any liability or to purchase, or stand ready to purchase, the policy or an
1.18interest therein, including through an assumption or forgiveness of a loan; or
1.19    (2) both of the following are present:
1.20    (i) all or a portion of the policy premiums were funded by means other than by the
1.21insured's personal assets or assets provided by a person who is closely related to the
1.22insured by blood or law or who has a lawful and substantial economic interest in the
1.23continued life of the insured. For purposes of this provision, funds from a premium finance
1.24loan are considered assets of the insured or such person only if the insured or such person
1.25is contractually obligated to repay the full amount of the loan and to pledge personal
1.26assets, other than the policy itself, for loan amounts exceeding the policy's cash value; and
2.1    (ii) the insured underwent a life expectancy evaluation within the eighteen-month
2.2time period immediately prior to the issuance of the policy and, during the same time
2.3period, the results of the life expectancy evaluation were shared with or used by any
2.4person for the purpose of determining the actual or potential value of the policy in the
2.5secondary market.
2.6    Subd. 2. Legitimate insurance transactions. Nothing in this act prevents:
2.7    (1) any policyowner, whether or not the policyowner is also the subject of the
2.8insurance, from entering into a legitimate settlement contract;
2.9    (2) any person from soliciting a person to enter into a legitimate settlement contract;
2.10    (3) a person from enforcing the payment of proceeds from the interest obtained
2.11under a legitimate settlement contract; or
2.12    (4) the assignment, sale, transfer, devise, or bequest with respect to the death benefit
2.13or ownership of any portion of a policy, provided the assignment, sale, transfer, devise, or
2.14bequest is not part of or in furtherance of STOLI practices."
2.15Page 7, line 26, after "beneficiary" insert "within the four-year period commencing
2.16with the date the policy is issued"
2.17Page 7, line 29, after "contract" insert "and if so, whether the circumstances
2.18described in section 60A.0785 are present"
2.19Page 8, line 1, delete "insured" and insert "circumstances described in section
2.2060A.0785 are present;"
2.21Page 8, delete lines 2 to 18
2.22Page 8, line 19, delete "(6)" and insert "(4)"
2.23Page 8, line 22, delete "(7)" and insert "(5)"
2.24Page 8, line 23, delete "their" and insert "the policyholder's"