A premium financing agreement does not fall within the definition of an “insurance contract.” On the contrary, N.Y. Banking Law No. 554 (McKinney 2003) defines it as: No person other than a bank, savings bank or association of savings and credit unions, an insurer or a licensed loan under section 9 of this chapter, can operate a premium financial agency without a licence obtained by the superintendent, as provided in this article. Premium funding agreements have been thoroughly reviewed. A large number of existing funded safeguards are required. Customers who are “under water” when the credit balance exceeds the current value of the policy are forced to reserve additional guarantees at low-risk weighted interest rates and/or deposit policies and withdraw the outstanding credit balance. In addition, several airlines active in the financing market have been downgraded, leading to a large-scale exchange or policy-making. This has led the English courts to declare that a person who enters into a life insurance contract on the life of an insured must have an “unsurpassed interest” in his or her life. This means that, in their simplest terms, you must benefit more from living the individual than from being dead. Relatives of direct blood certainly have an insurable interest in a family member. A consideration may have an insurable interest in another consideration.
Assuming that the insurance agent is not licensed as a premium financing agency and that the fee is directly or indirectly borne by the insured, it is prohibited to obtain a premium financing contract from that agent. As a general rule, representatives act on behalf and represent insurers and therefore can only receive compensation from those insurers. This compensation comes from a submitted or manual insurance rate (the gross amount that the insurer may charge under the law) that includes commissions to agents. Any additional compensation paid directly by the insured to the agent and beyond the commissions paid by a deposited insurer is contrary to the provisions of the New York Law on Authorization to Register and Rate Approval. General Counsel 1-7-2003 (#6). 1 Premium financing contract”: an agreement by which an insured or a potential insured promises to pay an insurance premium financing company the amount advanced under the agreement to an insurer or an insurance producer in the event of payment of premiums for an insurance policy, accompanied by a financing commission. Recently, arguments have been heard by insurance companies regarding the sale or transfer of ownership of policyholders to courts across the country (around 2010) of policyholders who sold their policies to investors. The courts held by an overwhelming majority in favour of the insured that there was an insurable interest at the time of the issuance of the policy, where the right to sell or transfer the policy after the issuance was the insured`s choice to each asset holder. Many life insurers have tried, and generally unsuccessfully, to challenge these sales on the basis of insurable interest or by trying to prove that the policyholders “intend” to sell the policy.
The courts have found that “the “intent” is irrelevant where there is an insurable interest in political broadcasting. Currently, premium financing is becoming a more regulated sector. All sources of financing must be approved by the institution and most lenders have significant assets (billions). Some are specialized premium lenders and most are large institutions. Consultants generally use a preferred premium financing platform to help with the proper structuring and care (service on an annual basis) of life insurance premium financing cases.