2023 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.