The New York State Insurance Department is about to release a draft of a proposed life settlement bill.
Officials have been working on the bill for 9 months, and they already have brought outside stakeholders in to go over the bill line by line, according to New York First Deputy Superintendent Kermitt Brooks.
The bill covers topics such as privacy and also make rooms for changes such as an increase in use of securitizations, Brooks says.
The New York department is “agnostic about whether a life settlement market develops,” but it is intent on insuring “good protections for consumers,” Brooks says.
The result draft is different from the models developed by the National Association of Insurance Commissioners, Kansas City, Mo., and the National Conference of Insurance Legislators, Troy, N.Y., Brooks says.
The New York department plans to unveil the bill in about a week, once it finds a sponsor.
One key provision would restrict life insurance policy sales within 2 years after purchase. Some proposals call for limiting sales for 5 years.
The New York department chose a 2-year ban in an effort to balance policyholder rights against competitive interests, the need to protect insurable interests and a settler’s privacy, Brooks says.
Other proposed provisions include requirements that:
- Life insurers let agents discuss policyholders’ life settlement options.