2013 New York Consolidated Laws
ISC - Insurance
Article 78 - (7801 - 7820) LIFE SETTLEMENTS
7815 - Stranger-originated life insurance.

 
    §  7815.  Stranger-originated  life  insurance.  (a)  In this chapter,
  "stranger-originated  life  insurance"  means  any  act,   practice   or
  arrangement,  at  or prior to policy issuance, to initiate or facilitate
  the issuance of a policy for the intended benefit of a  person  who,  at
  the time of policy origination, has no insurable interest in the life of
  the insured under the laws of this state, including:
    (1)  the  purchase of life insurance with resources or guarantees from
  or through a person that, at the time of policy  initiation,  could  not
  lawfully initiate the policy;
    (2) an arrangement or other agreement to transfer the ownership of the
  policy or the policy benefits to another person; or
    (3)  a  trust  or  similar  arrangement  that  is  used,  directly  or
  indirectly, for the purpose of purchasing one or more policies  for  the
  intended  benefit  of  another  person  in  a  manner  that violates the
  insurable interest laws of this state.
    (b) Stranger-originated life insurance  arrangements  do  not  include
  lawful  life  settlement contracts as permitted by this article or those
  practices set forth in paragraph three  of  subsection  (k)  of  section
  seven  thousand  eight  hundred  two of this article, provided that such
  contracts or practices are not for the  purpose  of  evading  regulation
  under this article.
    (c) No person shall directly or indirectly engage in any act, practice
  or arrangement that constitutes stranger-originated life insurance.
    (d)  The  failure  to  follow  the provision of subsection (c) of this
  section shall be a defined violation under article twenty-four  of  this
  chapter.