§ 7802. Definitions. In this article:

(a) "Accredited investors" shall be as defined in regulation D, rule
501 of the Federal Securities Act of 1933, as amended.

(b) "Advertisement" means any written, electronic or printed
communication or any communication by means of recorded telephone
messages or transmitted on radio, television, the Internet or similar
communications media, including film strips, motion pictures and videos,
published, disseminated, circulated or placed before the public,
directly or indirectly, for the purpose of creating an interest in or
inducing a person to purchase, sell, assign, devise, bequest or transfer
the death benefit or ownership of, a life insurance policy or an
interest in a life insurance policy pursuant to a life settlement
contract.

(c)(1) "Business of life settlements" means an activity involving, but
not limited to, offering to enter into, soliciting, negotiating,
procuring, effectuating, monitoring, or tracking life settlement
contracts.

(2) For purposes of this article, "business of life settlements" shall
also include:

(A) such acts or transactions effectuated in this state by mail or
otherwise from outside this state; and

(B) doing or proposing to do any business in substance equivalent to
the business of life settlements in a manner designed to evade the
provisions of this chapter.

(d) "Compensation" means anything of value, including money, credits,
loans, interest on premium, forgiveness of principal or interest,
vacations, prizes, gifts or the payment of employee salaries or
expenses, whether paid as commission or otherwise.

(e) "Financing entity" means an accredited investor:

(1) whose principal activity in connection with the transaction is
providing funds to effect the life settlement contract or to purchase
one or more policies; and

(2) who has an agreement in writing with a life settlement provider to
finance the acquisition of a life settlement contract.

(f) "Financing transaction" means a transaction in which a licensed
life settlement provider obtains financing from a financing entity,
including any secured or unsecured financing, any securitization
transaction, or any securities offering which is registered or exempt
from registration under federal and state securities laws.

(g) "Insured" means a person covered under a policy that is or may be
the subject of a life settlement contract.

(h) "Insurer" means a life insurance company or a fraternal benefit
society.

(i) "Life expectancy" means the arithmetic mean of the number of
months the insured can be expected to live taking into consideration
medical records and appropriate experiential data.

(j) "Life settlement broker" means a person who, for compensation,
solicits, negotiates or offers to negotiate a life settlement contract;
except that such term shall not include a licensed life settlement
provider, or representative thereof, licensed attorney at law, certified
public accountant, or financial planner that is accredited by a
nationally recognized accreditation agency acceptable to the
superintendent, who is retained in his or her professional capacity,
does not advertise as being in the business of life settlements and is
compensated without regard to whether a life settlement contract is
effectuated.

(k)(1) "Life settlement contract" means an agreement establishing the
terms under which compensation is provided to an owner, which
compensation is less than the expected death benefit of the policy, in
return for the assignment, transfer, sale, release, devise or bequest of
any portion of:

(A) the death benefit;

(B) the ownership of the policy; or

(C) any beneficial interest in the policy, or in a trust or any other
entity that owns the policy, where a primary purpose of the transaction
is to acquire the policy.

(2) "Life settlement contract" shall include an agreement, entered
into after the effective date of this article, described in paragraph
one of this subsection regardless of the date the compensation is
provided and regardless of the date the assignment, transfer, sale,
devise or bequest is effectuated.

(3) "Life settlement contract" shall not include:

(A) an assignment of a policy as collateral for a loan by any
depository institution insured by the Federal Deposit Insurance
Corporation or the National Credit Union Administration;

(B) an assignment of a policy as collateral for a loan made by a
licensed financial institution under which the lender takes an interest
in a life insurance policy solely to secure repayment of a loan or, if
there is a default on the loan and the policy is transferred, the
transfer of the policy by the lender, provided that the default itself
is not pursuant to an agreement or understanding with any other person
for the purpose of evading regulation under this article;

(C) an assignment of a policy as collateral for a loan made by a
lender that does not violate article twelve-B of the banking law;

(D) the making of a policy loan, or the paying of surrender benefits
or other benefits, by the issuer of a policy with respect to that
policy;

(E) an exchange of life insurance policies in a transaction described
by section 1035 of the Internal Revenue Code of 1986, as amended;

(F) an agreement made by an individual to take an assignment,
purchase, or otherwise receive the death benefit or ownership of any
portion of a policy or policies on the life of a single insured or lives
of joint insureds; provided that, in a calendar year, the individual
enters into no other agreement to take an assignment, purchase, or
otherwise receive the death benefit or ownership of any portion of a
policy or policies on the life of any other insured or lives of any
other joint insureds;

(G) an agreement to assign, transfer or pledge a settled policy, or
any interest therein, to a licensed life settlement provider, an
accredited investor or qualified institutional buyer, financing entity,
special purpose entity, or related provider trust;

(H) an agreement where all the parties are closely related to the
insured by blood or law or have a lawful substantial economic interest
in the continued life, health and bodily safety of the person insured,
or are trusts established primarily for the benefit of such parties;

(I) any designation, consent or agreement by an insured who is an
employee of an employer in connection with the purchase by the employer,
or trust established by the employer, of life insurance on the life of
the employee;

(J) a bona fide business succession planning arrangement between:

(i) one or more shareholders in a corporation or between a corporation
and one or more of its shareholders or one or more trusts established by
its shareholders;

(ii) one or more partners in a partnership or between a partnership
and one or more of its partners or one or more trusts established by its
partners; or

(iii) one or more members in a limited liability company or between a
limited liability company and one or more of its members or one or more
trusts established by its members;

(K) legitimate corporate or pension benefit plans, as determined by
the superintendent; or

(L) any other agreement that the superintendent determines is
substantially similar to any of the foregoing.

(l) "Life settlement intermediary" means 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.

(m) "Life settlement provider" means a person who enters, or offers to
enter, into a life settlement contract with the owner.

(n) "Owner" means the owner of a policy who enters or seeks to enter
into a life settlement contract.

(o) "Person" means any natural person or legal entity, including a
partnership, limited liability company, association, trust or
corporation.

(p) "Policy" means an individual or group life insurance policy or
certificate.

(q) "Premium finance loan" means a loan made for the purposes of
making premium payments on a life insurance policy, which loan is
secured by an interest in such life insurance policy.

(r) "Qualified institutional buyer" shall be as defined in rule 144A
of the Federal Securities Act of 1933, as amended.

(s) "Related provider trust" means a trust established by a licensed
life settlement provider or a financing entity for the sole purpose of
holding the ownership or beneficial interest in settled policies in
connection with a financing transaction; provided that the trust has a
written agreement with the licensed life settlement provider under
which:

(1) the licensed life settlement provider is responsible for ensuring
compliance with all statutory and regulatory requirements; and

(2) the trust agrees to make all records and files relating to life
settlement transactions available to the superintendent as if those
records and files were maintained directly by the licensed life
settlement provider.

(t) "Settled policy" means a policy that at any time has been acquired
by a life settlement provider pursuant to a life settlement contract.

(u) "Special purpose entity" means a corporation, partnership, trust,
limited liability company, or other legal entity formed solely to
provide, either directly or indirectly, access to institutional capital
markets for a financing entity or licensed life settlement provider.