State RegulationsNY specificDifficulty 2/5
A New York owner signs a life settlement contract. Under N.Y. Ins. Law §7813, the owner's right to rescind the contract:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under N.Y. Ins. Law §7813(g), the owner of a life settlement contract may rescind it at any time from the date of execution until 15 days after the owner receives the settlement proceeds. If the owner exercises rescission, the provider must furnish an accounting statement within 5 days, and the owner must repay the proceeds within 15 days after receiving the statement.
Why the other options are wrong
- A) The 10-day figure is the period the owner has to notify the insurer of the settlement after signing; it is not the length of the rescission right.
- B) The rescission period is measured by when the owner receives the proceeds, not by when the insurer receives notice of the settlement.
- C) Completion of the insurer's verification of coverage does not cut off rescission; the right runs until 15 days after the owner receives the proceeds.
Memory hook
Rescind until 15 days after the money reaches the owner's hands.