A single life insurance policy has multiple co-owners who are residents of different states. Under the New York life settlement article's choice-of-law rules, which state's law governs the settlement?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §7819, when a single policy has multiple owners who are residents of different states, the state of residency is 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. For persons other than natural persons, residence is the principal place of business or, for a trust, a state in which the grantor resides; and a nonresident owner may elect another state's law in writing when the contract is made, proposed and solicited outside New York.
Why the other options are wrong
- B) New York law is not automatic for co-owned policies; the largest-percentage rule, or the owners' written agreement on a tie, controls.
- C) The state where the policy was issued is not a choice-of-law factor in the life settlement article.
- D) The provider's principal place of business determines an entity's own residence, not which state's law governs the co-owners' settlement.
Memory hook
Biggest owner picks the governing state; on a tie, all owners sign one written choice.