State RegulationsNY specificDifficulty 2/5
Which of the following must be disclosed to a New York life settlement owner?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under N.Y. Ins. Law §7811, the disclosures to the owner must address the consequences of the transaction, including that settlement proceeds may carry tax consequences and that receiving them may affect eligibility for public assistance — information an owner needs before parting with a policy. Dividend projections, the provider's client list, and its resale margins are not among the required disclosures; indeed, revealing other clients' information would itself raise privacy concerns.
Why the other options are wrong
- A) Dividend scales relate to new policies the insurer issues; they are not a consequence of settling an existing policy.
- B) Revealing the provider's other clients would expose other owners' confidential information, which the privacy rule protects.
- C) The provider's expected resale profit is its own business information, not a statutory disclosure owed to the owner.
Memory hook
Tax and benefits impact go on the disclosure sheet — that is what §7811 wants the owner to see.