2019 -- S 0433 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

____________

A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- SENIOR

SAVINGS PROTECTION ACT

     Introduced By: Senators Lawson, Nesselbush, Valverde, Murray, and Euer

     Date Introduced: February 27, 2019

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 7 of the General Laws entitled "CORPORATIONS,

ASSOCIATIONS, AND PARTNERSHIPS" is hereby amended by adding thereto the following

chapter:

CHAPTER 11.2

SENIOR SAVINGS PROTECTION ACT

     7-11.2-1. Short title - Rules of construction.

     (a) This chapter shall be known as and may be cited as the "Senior Savings Protection

Act".

     (b) This chapter shall be liberally construed and applied to promote its underlying

purposes and policy and to make uniform the laws with respect to the subject of this chapter

among states enacting it.

     (c) Unless displaced by the particular provisions of this chapter, the principles of law and

equity supplement its provisions.

     7-11.2-2. Definitions.

     As used in this chapter, the following words and phrases shall have the following

meanings unless the context otherwise requires:

     (1) "Agent" means an individual, other than a broker-dealer, who represents a broker-

dealer in effecting or attempting to effect purchases or sales of securities or represents an issuer in

effecting or attempting to effect purchases or sales of the issuer's securities; provided, that a

partner, officer, or director of a broker-dealer or issuer, or an individual having a similar status or

performing similar functions is an agent only if the individual otherwise comes within the term.

The term does not include an individual excluded by rule adopted or order issued under this

chapter.

     (2) "Broker-dealer" means a person engaged in the business of effecting transactions in

securities for the account of others or for the person's own account. The term does not include:

     (i) An agent;

     (ii) An issuer;

     (iii) A bank, a trust company organized or chartered under the laws of this state, or a

savings institution, if its activities as a broker-dealer are limited to those specified in the

Securities Exchange Act of 1934, as amended (15 U.S.C. Section 78a, et seq.) or a bank that

satisfies the conditions described in the Securities Exchange Act of 1934, as amended (15 U.S.C.

Sections 78a et seq.);

     (iv) An international banking institution; or

     (v) A person excluded by rule adopted or order issued under this chapter.

     (3) "Financial exploitation" means the wrongful or unauthorized taking, withholding,

appropriation, or use of money, real property, or personal property of a qualified adult.

     (4) "Immediate family member" means a spouse, child, parent, or sibling of a qualified

adult;

     (5) "Qualified adult" means:

     (i) A person sixty (60) years of age or older; or

     (ii) A person who:

     (A) Has a mental or physical impairment that substantially limits one or more major life

activities, whether the impairment is congenital or acquired by accident, injury or disease, where

such impairment is verified by medical findings; and

     (B) Is between the ages of eighteen (18) and fifty-nine (59);

     (6) "Qualified individual" means a person associated with a broker-dealer who serves in a

supervisory, compliance, or legal capacity as part of their job.

     7-11.2-3. Notification of agencies and family members.

     If a qualified individual reasonably believes that financial exploitation of a qualified adult

has occurred, has been attempted, or is being attempted, the qualified individual shall notify the

department of business regulation as well as the division of elderly affairs and law enforcement in

accordance with § 42-66-8. Subsequent to providing this notification, an agent or qualified

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individual may notify an immediate family member, legal guardian, conservator, cotrustee,

successor trustee, or agent under a power of attorney of the qualified adult of such belief.

     7-11.2-4. Refusal of request for disbursement.

     (a) A qualified individual may refuse a request for disbursement from the account of a

qualified adult, or an account on which a qualified adult is a beneficiary or beneficial owner, if:

     (1) The qualified individual reasonably believes that the requested disbursement will

result in financial exploitation of the qualified adult; and

     (2) The broker-dealer or qualified individual:

     (i) Within two (2) business days makes a reasonable effort to notify all parties authorized

to transact business on the account orally or in writing, unless such parties are reasonably

believed to have engaged in suspected or attempted financial exploitation of the qualified adult;

and

     (ii) Complies with the notification requirements set forth in § 7-11.2-3.

     (b) Any refusal of a disbursement as authorized by this section shall expire upon the

sooner of:

     (1) The time when the broker-dealer or qualified individual reasonably believes that the

disbursement will not result in financial exploitation of the qualified adult; or

     (2) Ten (10) business days after the initial refusal of disbursement by the qualified

individual.

     (c) A court of competent jurisdiction may enter an order extending the refusal of a

disbursement or any other protective relief.

     7-11.2-5. Immunity from liability.

     Notwithstanding any other provision of law to the contrary, a broker-dealer, agent, or

qualified individual who, in good faith and exercising reasonable care, complies with the

provisions of this chapter shall be immune from any civil liability under this chapter.

     7-11.2-6. Website for training resources to prevent and detect financial exploitation.

     No later than July 1, 2020, the department of business regulation and the division of

elderly affairs shall develop and make available websites that include training resources to assist

broker-dealers and agents in the prevention and detection of financial exploitation of qualified

adults. Such resources shall include, at a minimum, indicators of financial exploitation of

qualified adults and potential steps broker-dealers and agents may take to prevent suspected

financial exploitation of qualified adults as authorized by law.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- SENIOR

SAVINGS PROTECTION ACT

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     This act would establish the "Senior Savings Protection Act" to require certain

individuals to report the occurrence or suspected occurrence of financial exploitation of qualified

adults, who are persons sixty (60) years of age or older, or who have a disability, and are between

the ages of eighteen (18) and fifty-nine (59).

     This act would take effect upon passage.

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