NY Ins L § 411 (2021)
2021 New York Laws ISC - Insurance Article 4 - Insurance Frauds Prevention 411 - Life Settlements Fraud Prevention Plans.

§  411.  Life  settlements  fraud  prevention  plans.  (a)  Every life settlement provider shall file with the superintendent a  plan  for  the detection,  investigation  and  prevention of fraudulent life settlement acts in this state and those fraudulent life settlement  acts  affecting life settlement contracts in this state.  (1)  The  plan  shall  provide  the time and manner in which such plan shall be implemented, including provisions for a special  investigations unit  and  staffing levels within such unit. Such investigators shall be responsible for investigating  information  on  or  cases  of  suspected fraudulent  activity  and  for effectively implementing fraud prevention and  reduction  activities  pursuant  to  the  plan   filed   with   the superintendent.  A  life  settlement provider shall include in such plan staffing  levels  and  allocations  of   resources   of   such   special investigations  unit  that  shall  be sufficient and appropriate for the proper implementation of the plan and approval of such plan pursuant  to subsection (c) of this section.  (2)  In  lieu  of  a  special  investigations  unit, a life settlement provider may contract  with  a  provider  of  services  related  to  the investigation  of  information  on  or  cases  of  suspected  fraudulent activities; provided, however, that a life settlement provider that opts for contracting with a separate provider of services, shall  provide  to the  superintendent  a  detailed plan therefor, pursuant to requirements set forth in regulation by the superintendent.  (3)  A  person  employed  by  a  special  investigations  unit  or  an independent  provider  of  investigative  services under contract with a life settlement provider shall be qualified by education  or  experience to  act  in  such  capacity,  subject to requirements established by the superintendent in a regulation.  (b) The plan shall provide for the following:  (1) interface  of  special  investigations  unit  personnel  with  law enforcement  and  prosecutorial agencies, including the financial frauds and consumer protection unit in the department;  (2) reporting of fraud data to a central organization approved by  the superintendent;  (3) in-service education and training for personnel in identifying and evaluating instances of suspected fraudulent activity;  (4)  coordination  with  other units of a life settlement provider for the investigation and initiation of civil actions based upon information received by or through the special investigation unit;  (5)  public  awareness  of  the  cost  and  frequency  of   fraudulent activities, and the methods of preventing fraud;  (6)  development and use of a fraud detection and procedures manual to assist in the detection and elimination of fraudulent activity; and  (7) the time and manner in which such plan shall be implemented and  a demonstration  that the fraud prevention and reduction measures outlined in the plan will be fully implemented.  (c)(1)  A  fraud  detection  and  prevention  plan  filed  by  a  life settlement  provider  with  the  superintendent pursuant to this section shall be deemed approved by the superintendent if not  returned  by  the superintendent  for  revision within one hundred twenty days of the date of filing. If the  superintendent  returns  a  plan  for  revision,  the superintendent  shall  state the points of objection with such plan, and any amendments as the superintendent may  require  consistent  with  the provisions   of   this  section,  including  staffing  levels,  resource allocation, or other policy or operational  considerations.  An  amended plan  reflecting  the  changes  shall  be  filed with the superintendent within forty-five days from the date of return.  (2) If the superintendent has returned a plan for revision  more  than one  time,  then  the  life  settlement  provider shall be entitled to a hearing pursuant to the provisions of article three of this chapter  and regulations promulgated thereunder.  (3)  If a life settlement provider fails to submit a final plan within thirty days after  a  determination  of  the  superintendent  after  the hearing  held pursuant to paragraph two of this subsection, or otherwise fails to submit a plan, or fails to implement the provisions of  a  plan in  a time and manner provided for in such plan, or otherwise refuses to comply with the provisions  of  this  section,  the  superintendent  may impose:  (A)  a  fine  of  not  more than two thousand dollars per day for such failure by a life settlement provider until the superintendent deems the life settlement provider to be in compliance;  (B) upon the life settlement provider a fraud detection and prevention plan deemed to be appropriate by  the  superintendent,  which  shall  be implemented by the life settlement provider; or  (C)  both a fine and a fraud detection and prevention plan pursuant to subparagraphs (A) and (B) of this paragraph.  (d) Any plan, the information  contained  therein,  or  correspondence related  thereto,  or  any  other information furnished pursuant to this section shall be deemed to be a confidential communication and shall not be open for review or be subject to a subpoena except by a  court  order or by request from any law enforcement agency or authority.  (e) Every life settlement provider required to file a fraud prevention plan  shall  report  to  the superintendent on an annual basis, no later than March fifteenth, describing the provider's experience,  performance and cost effectiveness in implementing the plan, utilizing such forms as the  superintendent  may  prescribe. Upon consideration of such reports, the superintendent  may  require  amendments  to  the  provider's  fraud detection and prevention plan as deemed necessary.