Some technology firms that support life insurance settlement businesses in New York state might have to register with the state insurance department, New York officials say.
The New York State Insurance Department Office of General Counsel (OGC) has published that conclusion in an opinion interpreting a new state law that sets rules for providers, producers and others in the life settlement industry.
The law, which took effect May 18, defines a “life settlement intermediary” as “a person who maintains an electronic or other facility or system, for the disclosure, through a forum of offers and counteroffers, to sell or purchase a policy pursuant to a life settlement contract; and delivers to: (1) a life settlement provider an offer from a life settlement broker or owner to sell a policy; or (2) an owner or life settlement broker an offer from a life settlement provider to purchase a policy.”
If a technology firm merely serves as a repository for documents posted and retrieved by parties setting up life settlement transactions, the New York department would not deem that firm to be a life settlement intermediary, OGC officials write in the opinion.
If a technology firm lets life settlement providers enter offers for a life insurance policy directly into a life settlement broker’s database, and the broker can review the offers at its convenience, the firm must register as a life settlement intermediary with the New York department, officials say.
Whether or not the technology firm must register as a life settlement intermediary, it still must comply with the privacy requirements included in the new New York life settlement law, officials say.