New York State
James J. Wrynn Superintendent of Insurance 25 Beaver Street New York, N.Y. 10004
|ISSUED 12/10/2010||FOR IMMEDIATE RELEASE|
Two life settlement providers were the first licensed under the State’s new life settlement law, the New York State Insurance Department announced today. The law empowers the Department to regulate the financial transactions that occur when consumers sell their life insurance policies to a third party.
FairMarket Life Settlements Corp. and Magna Life Settlements Inc. are the first two life settlement providers to be licensed under New York’s Life Settlement Act. The Act was signed into law in Nov. 2009 and became fully effective on May 18, 2010. The law marks the first time the life settlement industry has been regulated in New York.
“This represents an important next step in protecting consumers by regulating the life settlement industry. The Department continues to review additional license applications and will issue more licenses as these reviews are completed,” Insurance Superintendent James Wrynn said.
Twenty-nine other entities, which were doing business in New York legally before the new law took effect and have met specific requirements under New York’s Life Settlement Act, may continue to operate as life settlement providers pending the disposition of their license applications. A complete list of these entities is available at this location on the Department’s website, http://www.ins.state.ny.us/life/insurers/life_settle_entities_ny.htm.
Under the law, licensed life settlement providers may buy life insurance policies from policy owners. Typically, providers will pay more than the policy's surrender value, but less than the death benefit of the policy.
The law requires that an owner of a policy entering into a life settlement must receive a consumer information booklet and other disclosures providing the critical information that the consumer needs to make a decision to sell the policy. This information must include the amounts of all offers and counter-offers, as well as the fees paid to life settlement brokers, who are the entities or individuals that bring policy owners together with life settlement providers to complete transactions.
The law also includes safeguards to protect against the unlawful release of information concerning the identities of insured individuals and policy owners and information about the medical or financial status of insured individuals.
Consumers with questions should contact the Insurance Department’s Consumer Services Bureau from 9 a.m. to 5 p.m., Monday through Friday toll-free at 800-342-3736. Complaints may be filed using the Department’s website, www.ins.state.ny.us.