Legal Memorandum: Viatical Investment in KS

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
Jurisdiction: Kansas
Cited Cases: None
Cited Statutes: K.S.A. 17-12a501
Date: 10/01/2014

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.                    


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