S T A T E   O F   N E W   Y O R K
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                                  7143

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                             April 13, 2011
                               ___________

Introduced  by M. of A. MORELLE -- read once and referred to the Commit-
  tee on Insurance

AN ACT to amend the insurance law, in  relation  to  the  licensure  and
  reporting  requirements  of life settlement providers, certain disclo-
  sures of life settlement providers and life  settlement  brokers,  and
  scope  of  law  for  life  settlement contracts; and to repeal certain
  provisions of such law relating thereto

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 2 of subsection (c) of section 7803 of the insur-
ance  law, as added by chapter 499 of the laws of 2009, is amended and a
new paragraph 3 is added to read as follows:
  (2) The applicant for a life settlement provider license shall:
  (A) fully disclose the identity of all stockholders (except stockhold-
ers owning fewer than ten percent of the voting shares of a life settle-
ment provider whose shares are  publicly  traded),  partners,  officers,
members, directors and persons with a controlling interest. For purposes
of  this  section, "controlling interest" means a person who directly or
indirectly, has the power  to  cause  to  be  directed  the  management,
control or activities of such licensee;
  (B) provide a detailed plan of operation;
  (C)  provide,  if  a legal entity, a certificate of good standing from
the state of its domicile;
  (D) provide an anti-fraud plan that meets the requirements of  article
four of this chapter;
  (E)  demonstrate  financial  accountability  as evidenced by a bond or
other method for financial accountability as determined  by  the  super-
intendent pursuant to regulation; and
  (F)  provide  any  other information required by the superintendent TO
VERIFY THAT THE APPLICANT QUALIFIES AS A LIFE  SETTLEMENT  PROVIDER  AND
DETERMINE COMPLIANCE WITH ANY APPLICABLE STATE LAW.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10259-02-1
              

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  (3)  THE  SUPERINTENDENT SHALL NOT REQUIRE AN APPLICANT TO PROVIDE ANY
INDIVIDUAL TRANSACTION DATA REGARDING THE BUSINESS OF LIFE SETTLEMENTS.
  S  2.  Paragraph  1 of subsection (a) of section 7807 of the insurance
law, as added by chapter 499 of the laws of 2009, is amended to read  as
follows:
  (1)  Every  licensed life settlement provider shall file in the office
of the superintendent, annually on or before the first day of  March,  a
statement,  to be known as its annual statement, verified by the oath of
at least two of its principal officers, showing its condition at the end
of the preceding calendar year. The statement shall be in such form  and
shall  contain such other matters as the superintendent shall prescribe.
[In addition to any other requirements, the] THE annual statement  shall
specify  the  total  number,  aggregate  face amount and life settlement
proceeds of policies settled during the immediately  preceding  calendar
year, together with a breakdown of the information by policy issue year.
The  information shall not include individual transaction data regarding
the business of life settlements [or information if there is  a  reason-
able  basis  to  believe  the  information could be used to identify the
owner or the insured].
  S 3. Paragraph 13 of subsection (a) of section 7811 of  the  insurance
law  is  REPEALED  and paragraphs 14, 15, 16 and 17 are renumbered para-
graphs 13, 14, 15 and 16.
  S 4. Paragraph 3 of subsection (c) of section 7811  of  the  insurance
law  is  REPEALED and paragraphs 4 and 5 are renumbered paragraphs 3 and
4.
  S 5. Paragraph 6 of subsection (a) of section 7814  of  the  insurance
law,  as added by chapter 499 of the laws of 2009, is amended to read as
follows:
  (6) directly or indirectly, purchase or  obtain  an  interest  in  any
policy  that  is  the  subject  of  a life settlement contract where the
person has acted as a life settlement broker or life settlement interme-
diary with respect to the  policy,  unless  such  affiliation  has  been
disclosed to the owner pursuant to [paragraph three of subsection (c) of
section seven thousand eight hundred eleven of] this article; and (A) if
a life settlement broker, the broker has provided all offers and counter
offers  pursuant  to  paragraph  two  of subsection (c) of section seven
thousand eight hundred eleven of this article,  and  has  conducted  the
transaction  on  a  fair  and  equitable  arm-length  basis; or (B) with
respect to a life settlement  intermediary,  the  intermediary  complies
with  subsection (o) of section seven thousand eight hundred thirteen of
this article;
  S 6. Section 7819 of the insurance law, as added by chapter 499 of the
laws of 2009, is amended to read as follows:
  S 7819. Applicability and choice of law. (a) The  provisions  of  this
article  shall  ONLY  apply  to  [any] A life settlement contract [made,
proposed to be made, or solicited] ENTERED INTO with [a resident of]  AN
OWNER  WHOSE  PRINCIPAL  RESIDENCE  IS IN this state [or any owner phys-
ically in this state].
  (b)(1) If there is more than one owner on a  single  policy,  and  the
owners  are  residents  of different states, then the state of residency
shall be the state in which the owner having the largest  percentage  of
ownership  resides  or, if the owners hold equal ownership, the state of
residence of one owner, agreed upon in writing by all of the owners.
  (2) A life settlement contract entered into with an  owner  who  is  a
resident of another state may be governed by the laws of the other state
provided  that the owner elects in writing to be governed by the laws of

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the other state, and if the owner is also a resident of this state,  the
life  settlement  contract  is  made,  proposed to be made and solicited
outside this state.
  (c) For the purposes of this section, with respect to any person other
than a natural person, the state of residence shall be:
  (1)  the  state  in  which the person maintains its principal place of
business; or
  (2) with respect to a trust, a state in which  the  [grantor  resides]
TRUST IS SITED.
  S 7. This act shall take effect immediately.