2015 New York Laws
ISC - Insurance
Article 78 - (Insurance) LIFE SETTLEMENTS
7814 - Prohibited practices.

 7814. Prohibited practices. (a) No person shall:
(1)  enter  into  a  life  settlement  contract if the person knows or
  reasonably should have known that the policy was obtained  in  a  false,
  deceptive or misleading way;
(2)  engage  in any transaction, practice or course of business if the
  person knows or reasonably should have known  that  the  intent  was  to
  avoid the disclosure or other notice requirements of this article;
(3)  engage  in  any fraudulent act or practice in connection with any
  transaction relating to any life settlement;
(4)(A) enter into a premium finance loan with an applicant for  a  new
  policy  or  an  owner,  pursuant  to  which the person providing premium
  financing, or any affiliate, parent corporation  or  subsidiary  of  the
  person,  shall  receive  any  proceeds,  fees  or  other  consideration,
  directly or indirectly, from the policy or owner of the  policy  or  any
  other  person,  other  than  commissions  earned by a licensed insurance
  producer on the policy, with respect to the premium finance  loan,  that
  are  in  addition to the amounts required to pay the principal, interest
  and any reasonable costs, fees or expenses incurred  by  the  lender  or
  borrower  related to the premium finance loan or subsequent sale of such
  loan; provided, further, that  any  payments,  charges,  fees  or  other
  amounts  in  addition  to  the  amounts  required  to pay the principal,
  interest and any reasonable costs or expenses incurred by the lender  or
  borrower  related  to  the premium finance loan shall be remitted to the
  original owner of the policy or to the original owner's  estate  if  the
  original  owner  is  not  living at the time of the determination of the
  overpayment. For purposes of this paragraph, "owner" means the owner  of
  a policy whether or not entering into, or offering to enter into, a life
  settlement contract;
(B) If, at any time, a policy that is the subject of a premium finance
  loan  specified in subparagraph (A) of this paragraph is sold, assigned,
  transferred, devised or bequeathed pursuant to the terms  of  a  premium
  finance  loan,  any  proceeds or other consideration received other than
  the amounts specified in subparagraph (A) of  this  paragraph  shall  be
  remitted  to the original owner of the policy or to the original owner's
  estate if the original owner is not then living;
(5) with respect to any life settlement contract,  knowingly  fail  to
  disclose  any affiliation or contractual arrangement as required by this
  article;
(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
  intermediary  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;
(7) directly or indirectly provide  any  compensation  to  any  person
  acting  in  this  state as a life settlement broker, and no person shall
  accept any such compensation, unless  the  person  is  a  licensed  life
  settlement broker pursuant to the provisions of section two thousand one
  hundred thirty-seven of this chapter;
(8) directly or indirectly pay any referral or finder's fee or provide
  any  other  compensation to any owner's physician, attorney, accountant,

  insurance producer, insurance  consultant,  or  other  person  providing
  medical,  legal  or  financial planning services to the owner, or to any
  other person, other than a  life  settlement  broker,  representing  the
  owner  with respect to the life settlement contract, and no person shall
  accept any such fee or compensation;
(9) directly or indirectly provide compensation to a  life  settlement
  broker,  except where the compensation is for a specific life settlement
  contract and is clearly disclosed to  the  owner  as  required  in  this
  article;
(10)  directly  or  indirectly  engage  in  any  act determined by the
  superintendent to be an unfair or deceptive act or practice pursuant  to
  this chapter;
(11)   remove,   conceal,   alter,   destroy  or  sequester  from  the
  superintendent the assets or records of a life settlement provider, life
  settlement broker, life settlement intermediary or other person  engaged
  in the business of life settlements;
(12)  misrepresent  or  conceal  the  financial  condition  of  a life
  settlement provider; or
(13) in relation to the business of life settlements,  file  with  the
  superintendent   a  document  containing  materially  false  information
  concerning any fact material thereto or  otherwise  conceal  information
  about a fact material thereto from the superintendent.
(b)   No  life  settlement  provider,  life  settlement  broker,  life
  settlement intermediary, owner or any other person, as  a  condition  of
  entering  into  a  life settlement contract, shall request or require an
  insured to submit to a medical examination at any time subsequent to the
  settlement of the policy.
(c) No life settlement provider shall enter into any  life  settlement
  contract in which payments of proceeds are made in installments.
(d)  No  life  settlement  provider,  life  settlement  broker or life
  settlement intermediary shall directly or indirectly:
(1) be a party to or enter into an agreement or understanding limiting
  or restricting an owner's or life settlement broker's  ability  to  seek
  competitive  bids  on  policies  to  the  extent  that  the agreement or
  understanding unlawfully restrains trade or constitutes anti-competitive
  behavior;
(2) monopolize or attempt to monopolize, or combine or  conspire  with
  any  other  person or persons to monopolize, in this state, the business
  of life settlements;
(3) be a party to or enter into an agreement with  a  life  settlement
  provider,  life settlement broker or life settlement intermediary to the
  extent that the agreement fixes or limits the value paid to owners;
(4) be a party to or enter into any agreement or communication with  a
  life settlement provider or life settlement intermediary with respect to
  the  terms to be offered to an owner to the extent that the agreement or
  understanding unlawfully restrains trade or constitutes anti-competitive
  behavior;
(5) be a party to or enter into any agreement with a  life  settlement
  provider,  life settlement broker, life settlement intermediary or other
  person to  restrain  trade  or  engage  in  any  other  anti-competitive
  behavior;
(6)  be  party  to  or enter into any agreement with a life settlement
  provider, life settlement broker, life settlement intermediary or  other
  person the effect of which may be substantially to lessen competition in
  the business of life settlements subject to this chapter; or
(7)  be  a party to or enter into any agreement with a life settlement
  provider, life settlement broker, life settlement intermediary or  other

  person  to refuse to conduct business with any person in the business of
  life settlements.
(e) No life settlement intermediary shall:
(1)  represent,  solicit,  negotiate  or act on behalf of, an owner, a
  life settlement provider, or a life settlement broker; or
(2) act as a life settlement provider or life settlement broker.
(f) No insurer shall prohibit an insurance agent from disclosing to  a
  client the availability of a life settlement contract.
(g)  The  failure  to follow the provisions of this section shall be a
  defined violation under article twenty-four of this chapter.