On December 15, 2010, the New York Insurance Department’s Office of General Counsel (the “OGC”) issued an opinion regarding the choice of law for life settlement contracts (the “Opinion”). As a general principle, life settlement contracts made, proposed to be made or solicited in New York are subject to Article 78 of the New York Insurance Law (the “Insurance Law”). The Opinion examines certain scenarios to determine whether the transactions involved would be subject to Article 78, or whether the seller in such transactions may elect the law of another state to govern the life settlement contract. The Opinion concludes that:

  1. A policy owner not resident in New York may elect in writing to have the life settlement laws of his or her state of residence govern the life settlement contract when the policy owner signs the contract in New York (note, however, that the life settlement broker and life settlement provider must be appropriately licensed under, and otherwise comply with, the Insurance Law);
  2. In the case of a life insurance policy owned by a trust, the trustee may opt in writing to have the life settlement laws of another state govern the life settlement contract in situations where the grantor resides both in New York and such other state, the trustee signs the life settlement contract in such state or in another third state, and the life settlement contract was not proposed, made, or solicited in New York;
  3. Transactions involving a trust where the grantor is solely a New York resident, and the trustee signs the life settlement contract in a state other than New York are governed by Article 78, because the trust is considered resident is New York since the grantor resides in New York; and
  4. Article 78 governs when the grantor resides in both New York and another state and the trustee signs the contract in New York – the trustee cannot elect for the contract to be governed by the laws of another state because the contract was not made, proposed to be made, and solicited outside of New York.


The OGC was also asked which state’s life settlement laws govern when both New York and another state claim jurisdiction. The OGC declined to address this question, stating that “the Department will not opine on the laws of other states.”

Click here for a copy of the Opinion.