State RegulationsNY specificDifficulty 2/5
A policy owner negotiates the sale of her own life insurance policy to a settlement provider, acting for herself and paying no one. Under New York licensing law, she:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The licensing requirement in N.Y. Ins. Law §2137, read with §2102(a)(1), reaches persons who act as agents or brokers for others for compensation. An owner selling her own policy is exercising her own rights in the contract rather than acting as a life settlement broker for a client, so no broker license is needed for her side of the transaction.
Why the other options are wrong
- A) A broker license is for those brokering settlements on behalf of owners; the owner herself is not brokering.
- C) Registration under N.Y. Ins. Law §7804 applies to providers and intermediaries, not to an owner selling her own policy.
- D) The owner may sell her own policy; the insurer's consent is not a statutory precondition to a life settlement.
Memory hook
Sell your own policy freely; broker someone else's, get licensed.