NY Ins L § 7811 (2021)
2021 New York Laws ISC - Insurance Article 78 - Life Settlements 7811 - Disclosures to Owners and Insureds.

§  7811.  Disclosures  to owners and insureds. (a) The life settlement provider or life settlement  broker  shall  provide  the  owner  with  a separate  written  document conspicuously displaying the information and disclosures required by this subsection. The separate document shall  be signed by the owner and life settlement provider, no later than the date the life settlement contract is signed by all parties. At a minimum, the document shall state:  (1) that there are possible alternatives to life settlement contracts, including accelerated benefits offered by the issuer of the policy;  (2) that some or all of the proceeds of a life settlement contract may be  taxable  and  that  advice  should be sought from a professional tax advisor;  (3) that the proceeds from a life settlement contract could be subject to the claims of creditors;  (4) that receipt of proceeds  from  a  life  settlement  contract  may adversely  affect  the  recipients' eligibility for public assistance or other government benefits or entitlements  and  that  advice  should  be obtained from the appropriate agencies;  (5)  that  the owner has a right to rescind a life settlement contract from the time of execution of the contract until fifteen days after  the receipt of the life settlement proceeds by the owner;  (6) that proceeds will be sent to the owner within three business days after  the  life  settlement  provider has received the insurer or group administrator's acknowledgement that ownership of the policy or interest in the certificate has been transferred and  the  beneficiary  has  been designated in accordance with the terms of the life settlement contract;  (7)  that  entering  into  a  life settlement contract may cause other rights or benefits, including conversion rights and  waiver  of  premium benefits,  that  may  exist  under  the policy or certificate of a group policy to be forfeited by the owner and that assistance should be sought from a professional financial advisor;  (8) the gross offer or bid that the life settlement provider shall pay pursuant to the life settlement contract; the net amount to be  paid  to the  owner  pursuant  to  the life settlement contract; the name of each life settlement broker, life settlement intermediary, insurance producer or insurance consultant that will be compensated by the life  settlement provider,  or  any  affiliate,  parent corporation, or subsidiary of the life settlement provider; and the amount of compensation that  the  life settlement  provider, or any affiliate, parent corporation or subsidiary of the life settlement provider, shall  provide  to  a  life  settlement broker,  life  settlement  intermediary, insurance producer or insurance consultant, or any affiliate, parent corporation or subsidiary  of  such broker,  intermediary,  producer,  or  consultant,  pursuant to the life settlement contract. For the purposes of this paragraph, "gross offer or bid" means the total amount or value  offered  by  the  life  settlement provider  for  the  purchase  of  one  or  more life insurance policies, inclusive of commissions and fees;  (9) the date by which the funds will be available to the owner and the transmitter of the funds;  (10) that the life settlement provider or life  settlement  broker  is required  to  provide  an  owner  during the solicitation process with a consumer information booklet in a form prescribed by the superintendent, or  other  similar  material,   subject   to   the   approval   of   the superintendent;  (11)  that  the insured may be contacted by either the life settlement provider or life settlement broker,  or  any  authorized  representative thereof,  for  the purpose of determining the insured's health status or to verify the insured's address, and that the contact shall  be  limited  to  once every three months if the insured has a life expectancy of more than one year, and no more than once per month if the insured has a life expectancy of one year or less;  (12)  any  affiliations  or  contractual arrangements between the life settlement provider and the issuer of the policy to be settled;  (13) any affiliations or contractual arrangements with any other  life settlement   provider,   life   settlement   broker,   life   settlement intermediary or party financing the transaction;  (14) that a life settlement broker represents exclusively  the  owner, and not the insurer or the life settlement provider or any other person, and  owes  a  fiduciary  duty  to  the  owner,  including  a duty to act according to the owner's instructions and in the best  interest  of  the owner;  (15)  the  name, business address, telephone number and e-mail address of the independent, third party escrow agent and that the owner has  the right  to  inspect  or  receive  copies  of the relevant escrow or trust agreements or documents;  (16) that a  change  of  ownership  could  in  the  future  limit  the insured's  ability  to  purchase  future insurance on the insured's life because there is a limit to how much coverage insurers will issue on one life; and  (17) the name, business address, telephone number and  e-mail  address of the life settlement provider.  (b)  The  life  settlement  provider  or  life settlement broker shall provide to the insured in  a  separate  written  document  conspicuously displaying  the information and disclosures required by this subsection. The separate document shall be signed by the insured no later  than  the date the life settlement contract is signed by all parties. The document shall:  (1)  state  that  the  insured  may  be  contacted  by either the life settlement  provider  or  life  settlement  broker  or  any   authorized representative  thereof,  for  the  purpose of determining the insured's health status or to verify the insured's address, and that  the  contact shall  be  limited  to once every three months if the insured has a life expectancy of more than one year, and no more than once per month if the insured has a life expectancy of one year or less;  (2) state that a change of ownership could in  the  future  limit  the insured's ability to purchase additional insurance on the insured's life because there is a limit to how much coverage insurers will issue on one life; and  (3) contain the following language, or such other language required by the  superintendent  by  regulation: "All medical, financial or personal information solicited or obtained by a life settlement provider or  life settlement  broker about an insured, including the insured's identity or the identity of family members, a spouse or a significant other  may  be disclosed  as  necessary  to effect the life settlement contract between the owner and provider. If you are asked to  provide  this  information, you  will  be asked to consent to the disclosure. The information may be provided to someone who buys  the  policy  or  provides  funds  for  the purchase. You may be asked to renew your permission to share information every two years".  (c) The life settlement broker shall provide the owner with a separate written   document   conspicuously   displaying   the   information  and disclosures required by this subsection. The separate document shall  be signed  by  the owner and life settlement broker, no later than the date the life settlement contract is signed by all parties. At a minimum, the document shall state:  (1) the name, business address, telephone number and e-mail address of the life settlement broker;  (2)  a  full,  complete  and  accurate  description of all the offers, counter-offers, acceptances and rejections relating to the proposed life settlement contract;  (3)  any  affiliations  or  contractual  arrangements  with  any  life settlement  provider,  other  life  settlement  broker,  life settlement intermediary or any financing entity;  (4) the gross amount to  be  paid  pursuant  to  the  life  settlement contract,  the  net  amount  of  the  proceeds  to  be paid to the owner pursuant to the life settlement contract, the amount of compensation  to be  paid  to  the life settlement broker pursuant to the life settlement contract, and the name of such life settlement broker. For  purposes  of this  paragraph,  "gross  amount  to  be paid" means the total amount or value to be paid by the life settlement provider for the purchase of one or more life insurance policies, inclusive of commissions and fees; and  (5) a complete reconciliation of the gross offer or bid  by  the  life settlement  provider  to  the  net  amount  of  proceeds  or value to be received by the owner, provided that for the purpose  of  this  section, "gross offer or bid" shall mean the total amount or value offered by the life  settlement provider for the purchase of one or more life insurance policies, inclusive of commissions and fees.