State RegulationsNY specificDifficulty 2/5
A New York consultant with no insurance license offers, for a fee, to negotiate the sale of a client's life insurance policy to a settlement provider. Under New York law, this arrangement is:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Brokering life settlements for owners is licensed activity in New York: N.Y. Ins. Law §2137 governs life settlement brokers, and §2102(a)(1) prohibits acting as an insurance agent or broker without the required license. A person who, for compensation, negotiates the sale of a client's policy to a provider must hold the license the Superintendent requires — disclosing the fee does not cure the absence of a license.
Why the other options are wrong
- A) New York treats brokering life settlements on existing policies as regulated insurance activity, not unregulated property dealing.
- B) Fee disclosure does not substitute for licensure under §2102(a)(1).
- C) Registration of providers and intermediaries under N.Y. Ins. Law §7804 is a separate requirement; it does not excuse an unlicensed person from brokering.
Memory hook
A fee for brokering a settlement means a license is required first.