A life settlement is being arranged for a New York policyholder. Among the disclosures required by N.Y. Ins. Law §7811, what must the owner be told about the life settlement broker's role?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §7811, the provider or broker must give the owner a separate written disclosure document, signed no later than the date the life settlement contract is signed by all parties. One required disclosure states that a life settlement broker represents exclusively the owner, not the insurer, the provider, or any other person, and owes the owner a fiduciary duty, including a duty to act according to the owner's instructions and in the owner's best interest. Practically, a New York owner is entitled to treat the broker as the owner's own agent, and the Department of Financial Services can discipline a broker who steers the deal toward the provider's side.
Why the other options are wrong
- B) Section 7811 rejects the neutral-intermediary idea — the broker's loyalty and fiduciary duty run exclusively to the owner.
- C) The provider is the buying side of the transaction; the disclosure exists precisely because the broker may not represent the provider against the owner's interest.
- D) The insurer that issued the policy is among those the broker does NOT represent; the statute lists insurer and provider together on the excluded side.
Memory hook
The settlement broker works for the owner alone — exclusive representation plus fiduciary duty, disclosed in writing.