Officials in the New York State Insurance Department say a life settlement servicing company may not necessarily have the authority to contact an insured to ask about the insured’s health status.
The officials come to that conclusion in Office of General Council Opinion Number 11-02-10.
The Office of the General Counsel issued the opinion in response to a question from ABC L.L.C., a life settlement servicing entity, about its responsibilities under New York life settlement privacy laws.
The New York state life settlement law privacy provision, Section 7810, prohibits life settlement providers, brokers, and intermediaries from disclosing the identity of a policy owner or insured to any person unless the disclosure meets at least one of several listed requirements.
The identity could be disclosed, for example, if that were “required to purchase insurance.”
Section 7810(a) of the law applies to “any … person with actual knowledge of an insured or owner’s identity,” officials say.
Because ABC itself does not qualify as a licensed life settlement provider or broker, ABC may contact an insured under a settled policy only if ABC is acting as the authorized representative of a life settlement provider or life settlement broker, officials say.
Even if ABC is acting as the authorized representative of a life settlement provider or life settlement broker, state law would permit it to contact an insured with a life expectancy of 1 year or longer only once every 3 months. The company could contact an insured with a life expectancy of 1 year or less once every month.