A New York life settlement involves an insured whose adult daughter owns the policy. Under N.Y. Ins. Law §7811, which statement about disclosures to the insured is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under N.Y. Ins. Law §7811, when a settlement involves a living insured, the life settlement provider or broker must provide the insured a separate written disclosure document, signed by the insured no later than the date the life settlement contract is signed by all parties. That document advises the insured about the permitted frequency of verification contacts, that a change of ownership could limit the insured's ability to purchase future insurance on the insured's life, and that medical and personal information may be disclosed as necessary to effect the settlement. Skipping the insured's document is a disclosure violation the Superintendent of Financial Services can pursue.
Why the other options are wrong
- A) The insured's disclosure is a statutory right; it does not depend on any written authorization from the owner.
- B) The Insurance Law expressly requires a separate signed disclosure document for the insured even though the insured is not the contracting owner.
- D) The disclosure duty falls on the provider or broker, not on the issuing insurer, and the deadline is the contract signing date, not the closing.
Memory hook
Owner AND insured each get their own signed disclosure — by the date the settlement contract is signed.