State RegulationsNY specificDifficulty 1/5
An investment firm wants to purchase life insurance policies from New York owners and hold them as investments. Before entering into life settlement contracts with owners, the firm must:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §7803(b), entering into life settlement contracts with owners — that is, purchasing their policies — requires a life settlement provider license from the Superintendent of Financial Services. An agent's registration authorizes soliciting insurance, owning an insurer is not required for an investor buying existing policies, and filing financing paperwork is no substitute for the provider license that gates the purchasing activity itself.
Why the other options are wrong
- A) An agent registration authorizes soliciting and selling insurance; purchasing policies from owners is provider activity.
- C) The firm buys existing policies; it does not need to become an authorized insurer to do so as a licensed provider.
- D) Filings cannot substitute for the §7803(b) license that gates entering into settlement contracts with owners.
Memory hook
Buying policies from owners? Provider license first — §7803(b) is the entry ticket.