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New York law creates further regulation for life settlementPosted On Mon, November 30, 2009
Recently, a law passed in the New York State Senate that will further regulate the life settlement industry.
Life settlement is the practice of people selling their life insurance to investors in order to cash in on their policies. The investors then pay the premiums on the policy and get the payout when the insured person dies. Sometimes these firms also resell the policy to other investors.
Through the legislation, life settlement companies would have to register with the state's insurance department. Furthermore, it would also make sure that information that life settlement companies have on their customers remains confidential, inlcuding medical data.
"This legislation contains numerous disclosure and consumer protection provisions which will help to ensure that an owner considering selling his or her policy makes an informed decision," Senator Neil D. Breslin, a Delmar, New York Democrat who sponsored the legislation, said.
The legislation passed also bans the practice of stranger-oriented life settlements, where investors generally target older people in order to get them to get a life insurance policy. Once that happens, the firms then buy the policy.
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