Issue: Under Kansas law, when does a ‘security’ involve a viatical investment?
|Area of Law:||Corporate & Securities|
|Keywords:||Viatical investment; Offer, sale, or purchase of a security; Exception|
|Cited Statutes:||K.S.A. 17-12a501|
K.S.A. 17-12a501 only prohibits certain actions made “in connection with the offer, sale, or purchase of a security.” Id. (emphasis added). Generally, in most cases, a “viatical investment” is a security within the meaning of the statute. K.S.A. 17-12A102(28(D). However, there is an important exception applicable here: The term “Viatical Investment does not include . . . the bona fide assignment of a life insurance policy to a bank, savings bank, savings and loan association, credit union, or other licensed lending institution as collateral for a loan.” NASAA Guidelines Regarding Viatical Investments § I.B.14.c.