Two business partners reside in different states and co-own a single life insurance policy, holding unequal ownership shares, when a life settlement is proposed. Under N.Y. Ins. Law §7819, which state's law governs the transaction?

Why B is correct

Under N.Y. Ins. Law §7819, when a single policy has more than one owner and the owners are residents of different states, the state of residency is the state in which the owner having the largest percentage of ownership resides; if the owners hold equal ownership, the state of residence of one owner, agreed upon in writing by all of the owners, controls. Because the partners hold unequal shares, the majority owner's state of residence governs.

Why the other options are wrong

• A) The provider's licensing state does not determine the governing law; §7819 looks to the owners' relative ownership percentages and states of residence.
• C) New York law does not automatically govern merely because one co-owner resides here; the largest-ownership rule decides which owner's state controls.
• D) The issuing insurer's principal office plays no role in the choice-of-law rule for co-owned policies under §7819.

Memory hook

Co-owners in two states: the biggest owner picks the state; equal shares need a written agreement.