After notice and a hearing, the Superintendent of Financial Services determines that a life settlement broker knowingly withheld required disclosure information to the material detriment of the owner. Under the New York Insurance Law, the Superintendent may require the broker to pay:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under N.Y. Ins. Law §7816, if after notice and hearing the Superintendent determines that information required by the life settlement disclosure provisions was knowingly not provided, or knowingly delayed, by a life settlement broker to the material detriment of the owner, the Superintendent — in addition to any other penalty prescribed by law — may require the broker to pay to the people of the state an amount not to exceed the compensation due or provided to the broker. The remedy strips the misconduct of its payoff: a broker who hides required information can lose its fee to the state.
Why the other options are wrong
- A) The death benefit is not the measure of this remedy; the payment is capped at the broker's compensation.
- B) The insurer does not set the amount; the Superintendent determines it after notice and hearing, and it is payable to the people of the state.
- D) Premium restitution is not the statutory remedy for a broker's knowing failure to make required disclosures.
Memory hook
A broker who hides the truth can forfeit its compensation to the state.