Which of the following advertising practices is expressly prohibited for life settlement licensees under the New York Insurance Law?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §7809, no life settlement provider, intermediary, broker, or person acting on their behalf may directly or indirectly market, advertise, solicit or otherwise promote the purchase of a policy for the primary purpose of, or with an emphasis on, settling the policy. The rule aims at advertising that manufactures new policies for the settlement market; by contrast, offering settlement services to the owner of an existing policy is the licensed business of life settlements. Violations are defined violations under the Insurance Law's unfair trade practices provisions.
Why the other options are wrong
- B) Soliciting the settlement of an existing policy from its owner is the lawful core of the licensed life settlement business, not the prohibited conduct.
- C) Licensed providers, intermediaries and brokers are expressly permitted to conduct or participate in advertisements within the state.
- D) Identifying the licensee by name and license status is not prohibited by the advertising section.
Memory hook
Advertise settling an existing policy — never advertise buying a new policy just to settle it.