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New York life settlement brokers will face new regulation 2009-12-08 In a bid to protect New York consumers, the state insurance department will regulate life settlement brokers more closely in 2010. As part of the new regulatory framework, announced late in November, life settlement brokers will be subject to NYID licensing requirements. To discourage profit-minded scammers from participating in the life settlement market, New York is limiting the issuance of stranger-originated life insurance (STOLI). Under those restrictions, it will be illegal for anyone to sell a life insurance policy with the sole intent of reselling that policy as a life settlement. Life settlement intermediaries will be regulated by the NYID, as well; they must register with the department by the time the new regulations go into effect on May 18, 2010. And life settlement brokers will have to undergo digital fingerprinting. It will "streamline the processing of background checks," New York Insurance Superintendent James J. Wrynn said, making consumer protections even stronger than they are today. Life settlements differ from viatical settlements in that they are designed for those with longer life expectancies - typically, in the bill's words, "senior citizens who may no longer want or need their policy."  |
