Life Settlement — New York exam

Answer: B. Section 7802(j) defines a life settlement broker as a person who, for compensation, solicits, negotiates, or offers to negotiate a life settlement contract. Buying for one's own account describes a provider, and valuation and tracking are services rather than the brokering the definition covers.Source: N.Y. Ins. Law § 7802 — 7802(j), Life settlement broker

Answer: C. Section 7802(k) defines a life settlement contract as an agreement establishing the terms under which compensation is provided to an owner, that compensation being less than the expected death benefit. Surrender to the insurer, an accelerated benefit, and a collateral assignment are each different transactions.Source: N.Y. Ins. Law § 7802 — 7802(k), Life settlement contract

Answer: B. Section 7802(i) defines life expectancy as the arithmetic mean of the number of months the insured can be expected to live, taking into consideration medical records. A pricing table, a physician's certificate, and Medicare eligibility are not the measure the subsection uses.Source: N.Y. Ins. Law § 7802 — 7802(i), Life expectancy

Answer: B. Section 7815 provides that a violation of the prohibition shall be a defined violation under article twenty-four, which carries the Insurance Law's penalties and remedies. The five hundred dollar figure belongs to the rebating penalty in section 2324(f).Source: N.Y. Ins. Law § 7815 — 7815, Consequence

Answer: C. Section 7815 provides that no person shall directly or indirectly engage in any act, practice, or arrangement that constitutes stranger-originated life insurance. Selling a seasoned policy, using a trust for legitimate purposes, and provider financing under section 7802(f) are not prohibited by that section.Source: N.Y. Ins. Law § 7815 — 7815, Prohibition

Answer: D. Section 7802(f) defines a financing transaction as one in which a licensed life settlement provider obtains financing from a financing entity, including any secured or unsecured financing. A policy loan from the insurer and an advance by a broker are different arrangements.Source: N.Y. Ins. Law § 7802 — 7802(f), Financing transaction

Answer: D. Section 7814 carries the prohibited practices for life settlements, alongside the STOLI prohibition in section 7815. Section 7802 supplies the definitions, section 7809 governs advertising, and section 7810 governs privacy.Source: N.Y. Ins. Law § 7802 — 7814 read with 7802

Answer: A. Section 7815 describes STOLI as acts to facilitate policy issuance for a person lacking insurable interest in the insured's life, including purchase with resources from ineligible persons, arrangements to transfer ownership, and use of trusts to circumvent the insurable interest requirement. A genuine later sale, tracking, and brokering are regulated activities rather than STOLI.Source: N.Y. Ins. Law § 7815 — 7815, What STOLI covers