2023 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.