§ 7815. Stranger-originated life insurance. (a) In this chapter,
"stranger-originated life insurance" means any act, practice or
arrangement, at or prior to policy issuance, to initiate or facilitate
the issuance of a policy for the intended benefit of a person who, at
the time of policy origination, has no insurable interest in the life of
the insured under the laws of this state, including:

(1) the purchase of life insurance with resources or guarantees from
or through a person that, at the time of policy initiation, could not
lawfully initiate the policy;

(2) an arrangement or other agreement to transfer the ownership of the
policy or the policy benefits to another person; or

(3) a trust or similar arrangement that is used, directly or
indirectly, for the purpose of purchasing one or more policies for the
intended benefit of another person in a manner that violates the
insurable interest laws of this state.

(b) Stranger-originated life insurance arrangements do not include
lawful life settlement contracts as permitted by this article or those
practices set forth in paragraph three of subsection (k) of section
seven thousand eight hundred two of this article, provided that such
contracts or practices are not for the purpose of evading regulation
under this article.

(c) No person shall directly or indirectly engage in any act, practice
or arrangement that constitutes stranger-originated life insurance.

(d) The failure to follow the provision of subsection (c) of this
section shall be a defined violation under article twenty-four of this
chapter.