Source: https://www.dfs.ny.gov/insurance/ogco2001/rg111141.htm
Timestamp: 2018-07-16 18:36:33
Document Index: 272482991

Matched Legal Cases: ['§ 7801', '§ 7801', '§ 3205', '§ 3205', '§ 3205', '§ 3205']

Office of General Counsel Opinion 99-37
The Office of General Counsel issued the following informal opinion on November 14, 2001, representing the position of the New York State Insurance Department.
Re: Office of General Counsel Opinion 99-37
Has this Department recently withdrawn General Counsel Opinion 99-37?
Yes, this Department recently concluded that General Counsel Opinion 99-37 did not reflect the state of the law.
Since this is a general inquiry, no facts were supplied.
New York Insurance Law Article 78 (McKinney 2000) was enacted, 1993 N.Y. Laws 638, to regularize and regulate the purchase of policies of individuals with a terminal illness. New York Insurance Law § 7801(a) has, since the enactment of New York Insurance Law Article 78, defined, in pertinent part, a viatical settlement company:
New York Insurance Law § 7801(b) has similarly defined a viator:
Based upon the above definitions, this Office concluded on April 21, 1999, Opinion 99-37, that the class of individuals that could validly contract with a viatical settlement company was limited to those individuals with "a catastrophic or life threatening illness or condition". This Office was recently called upon to reconsider the 1999 position.
In its review of the applicable statutes, this Department considered New York Insurance Law § 3205 (McKinney 2000), which regulates insurable interest with respect to life insurance. New York Insurance Law § 3205(a)(1) defines insurable interest:
The term insurable interest means: (A) in the case of persons closely related by blood or by law, a substantial interest engendered by love and affection; (B) in the case of other persons, a lawful and substantial economic interest in the continued life, health or bodily safety of the person insured, as distinguished from an interest which would arise only by, or would be enhanced in value by, the death, disablement or injury of the insured.
New York Insurance Law § 3205(b) sets forth specific restrictions on issuance of life insurance policies:
(1) Any person of lawful age may on his own initiative procure or effect a contract of insurance upon his own person for the benefit of any person, firm, association or corporation. Nothing herein shall be deemed to prohibit the immediate transfer or assignment of a contract so procured or effectuated.
An individual naming another as beneficiary thereby confers the requisite insurable interest. Corder v. Prudential Insurance Company, 42 Misc. 2d 423, 348 N.Y.S. 2d 265 (Sup. Ct. Erie County 1964). Under New York Insurance Law § 3205(b), a viatical settlement company may legally make solicitations to purchase policies immediately upon their issuance, so long as the policy would initially be issued to one with an insurable interest at the time when the contract was made. It is also clear that the insured individual could validly assign his or her policy to any other individual or entity immediately and there is no statutory prohibition on soliciting such assignments from individuals owning existing policies.
Therefore, on August 29, 2001, this Office concluded that there is nothing in New York Insurance Law Article 78 that restricts a viatical settlement company to only purchasing the policy of a viator.
Accordingly, Opinion 99-37 no longer accurately reflects the Insurance Law and, thus, no longer has any viability.