S T A T E O F N E W Y O R K
________________________________________________________________________
7143
2011-2012 Regular Sessions
I N A S S E M B L Y
April 13, 2011
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Introduced by M. of A. MORELLE -- read once and referred to the Commit-
tee on Insurance
AN ACT to amend the insurance law, in relation to the licensure and
reporting requirements of life settlement providers, certain disclo-
sures of life settlement providers and life settlement brokers, and
scope of law for life settlement contracts; and to repeal certain
provisions of such law relating thereto
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph 2 of subsection (c) of section 7803 of the insur-
ance law, as added by chapter 499 of the laws of 2009, is amended and a
new paragraph 3 is added to read as follows:
(2) The applicant for a life settlement provider license shall:
(A) fully disclose the identity of all stockholders (except stockhold-
ers owning fewer than ten percent of the voting shares of a life settle-
ment provider whose shares are publicly traded), partners, officers,
members, directors and persons with a controlling interest. For purposes
of this section, "controlling interest" means a person who directly or
indirectly, has the power to cause to be directed the management,
control or activities of such licensee;
(B) provide a detailed plan of operation;
(C) provide, if a legal entity, a certificate of good standing from
the state of its domicile;
(D) provide an anti-fraud plan that meets the requirements of article
four of this chapter;
(E) demonstrate financial accountability as evidenced by a bond or
other method for financial accountability as determined by the super-
intendent pursuant to regulation; and
(F) provide any other information required by the superintendent TO
VERIFY THAT THE APPLICANT QUALIFIES AS A LIFE SETTLEMENT PROVIDER AND
DETERMINE COMPLIANCE WITH ANY APPLICABLE STATE LAW.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10259-02-1
A. 7143 2
(3) THE SUPERINTENDENT SHALL NOT REQUIRE AN APPLICANT TO PROVIDE ANY
INDIVIDUAL TRANSACTION DATA REGARDING THE BUSINESS OF LIFE SETTLEMENTS.
S 2. Paragraph 1 of subsection (a) of section 7807 of the insurance
law, as added by chapter 499 of the laws of 2009, is amended to read as
follows:
(1) Every licensed life settlement provider shall file in the office
of the superintendent, annually on or before the first day of March, a
statement, to be known as its annual statement, verified by the oath of
at least two of its principal officers, showing its condition at the end
of the preceding calendar year. The statement shall be in such form and
shall contain such other matters as the superintendent shall prescribe.
[In addition to any other requirements, the] THE annual statement shall
specify the total number, aggregate face amount and life settlement
proceeds of policies settled during the immediately preceding calendar
year, together with a breakdown of the information by policy issue year.
The information shall not include individual transaction data regarding
the business of life settlements [or information if there is a reason-
able basis to believe the information could be used to identify the
owner or the insured].
S 3. Paragraph 13 of subsection (a) of section 7811 of the insurance
law is REPEALED and paragraphs 14, 15, 16 and 17 are renumbered para-
graphs 13, 14, 15 and 16.
S 4. Paragraph 3 of subsection (c) of section 7811 of the insurance
law is REPEALED and paragraphs 4 and 5 are renumbered paragraphs 3 and
4.
S 5. Paragraph 6 of subsection (a) of section 7814 of the insurance
law, as added by chapter 499 of the laws of 2009, is amended to read as
follows:
(6) directly or indirectly, purchase or obtain an interest in any
policy that is the subject of a life settlement contract where the
person has acted as a life settlement broker or life settlement interme-
diary with respect to the policy, unless such affiliation has been
disclosed to the owner pursuant to [paragraph three of subsection (c) of
section seven thousand eight hundred eleven of] this article; and (A) if
a life settlement broker, the broker has provided all offers and counter
offers pursuant to paragraph two of subsection (c) of section seven
thousand eight hundred eleven of this article, and has conducted the
transaction on a fair and equitable arm-length basis; or (B) with
respect to a life settlement intermediary, the intermediary complies
with subsection (o) of section seven thousand eight hundred thirteen of
this article;
S 6. Section 7819 of the insurance law, as added by chapter 499 of the
laws of 2009, is amended to read as follows:
S 7819. Applicability and choice of law. (a) The provisions of this
article shall ONLY apply to [any] A life settlement contract [made,
proposed to be made, or solicited] ENTERED INTO with [a resident of] AN
OWNER WHOSE PRINCIPAL RESIDENCE IS IN this state [or any owner phys-
ically in this state].
(b)(1) If there is more than one owner on a single policy, and the
owners are residents of different states, then the state of residency
shall be the state in which the owner having the largest percentage of
ownership resides or, if the owners hold equal ownership, the state of
residence of one owner, agreed upon in writing by all of the owners.
(2) A life settlement contract entered into with an owner who is a
resident of another state may be governed by the laws of the other state
provided that the owner elects in writing to be governed by the laws of
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the other state, and if the owner is also a resident of this state, the
life settlement contract is made, proposed to be made and solicited
outside this state.
(c) For the purposes of this section, with respect to any person other
than a natural person, the state of residence shall be:
(1) the state in which the person maintains its principal place of
business; or
(2) with respect to a trust, a state in which the [grantor resides]
TRUST IS SITED.
S 7. This act shall take effect immediately.