The New York State Insurance Department has proposed a bill to regulate life settlements.
New York now regulates viatical settlements involving gravely ill insureds, but it does not regulate life settlements involving healthy insureds.
The proposed bill would set licensing, registration and disclosure requirements for facilitators of life settlement transactions.
Eric Dinallo, superintendent of the New York State Insurance Department, is in favor of a bill that would set licensing, registration and disclosure requirements for facilitators of life settlement transactions.
The companies involved in arranging a transaction would have to give the policy seller a statement showing the difference between the gross offer for the policy and the net amount to be paid to the owner, including a listing of all fees and compensation to the broker and other deal participants.
The proposed bill also would prohibit the parties involved in arranging a life settlement from releasing information about the identity of an insured without the insured’s consent.
Other bill provisions would prohibit stranger-originated life insurance; require the registration of life settlement intermediaries that maintain electronic or other systems that assist life settlement deals; and give the insurance department authority to approve contract forms used in life settlement transactions.
The New York department drafted the bill after holding a series of public hearings on life settlements in 2008.