Legal Memorandum: Viatical Investment in KS

Issue: Under Kansas law, do the securities laws apply to the assignment of a life insurance policy to a bank as collateral?

Area of Law: Corporate & Securities
Keywords: Viatical investment; Assignment of a life insurance policy to a bank; Collateral
Jurisdiction: Kansas
Cited Cases: None
Cited Statutes: Kan. Stat. Ann. § 17-12A102(28(D)
Date: 10/01/2014

The statute governs certain actions made “in connection with the offer, sale, or purchase of a security.”  Id. (emphasis added).  Generally, a “viatical investment” is a security within the meaning of the statute.  Kan. Stat. Ann. § 17-12A102(28(D).  However, 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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