Section 7801. Definitions

(a)  "Viatical  settlement  company"  means an
  individual, partnership, corporation or other entity not prohibited from
  acting as a viatical settlement company  under  section  twenty  of  the
  public  health  law that enters into an agreement with a person owning a
  life  insurance  policy  insuring  the  life  of  a  person  who  has  a
  catastrophic  or  life threatening illness or condition, under the terms
  of which the viatical settlement company pays compensation  or  anything
  of  value,  which  compensation or value is less than the expected death
  benefit of  the  insurance  policy,  in  return  for  the  policyowner's
  assignment,  transfer,  sale,  devise or bequest of the death benefit or
  ownership of the insurance policy to the  viatical  settlement  company.
  Viatical settlement company does not include:
    (1) any bank, savings bank, savings and loan association, credit union
  or  other  licensed  lending  institution which takes an assignment of a
  life insurance policy as collateral for a loan; or
    (2) the issuer of a life insurance policy which makes a  policy  loan,
  permits surrender of the policy or pays other policy benefits, including
  accelerated  benefits  pursuant  to  section  three thousand two hundred
  thirty of this chapter, in accordance with the terms of the policy; or
    (3) a friend or family member of the policyowner or of the insured who
  enters into three or fewer agreements for the transfer of life insurance
  policies for any value less than the expected death benefit.
    (b) "Viator" means the owner of a life insurance policy  insuring  the
  life  of  a person who has a catastrophic or life threatening illness or
  condition, who  enters  into  an  agreement  under  which  the  viatical
  settlement  company  will  pay  compensation or anything of value, which
  compensation or value is less than the expected  death  benefit  of  the
  insurance policy, in return for the viator's assignment, transfer, sale,
  devise  or  bequest  of  the death benefit or ownership of the insurance
  policy to the viatical settlement company. Viator  may  also  include  a
  person insured under a group life insurance policy who is not prohibited
  from  assigning  his  or  her  rights  or benefits and who assigns those
  rights or benefits by a viatical settlement.
    (c) "Viatical settlement" means an agreement entered  into  between  a
  viatical settlement company and a viator.  The agreement shall establish
  the   terms  under  which  the  viatical  settlement  company  will  pay
  compensation or anything of value, which compensation or value  is  less
  than  the  expected death benefit of the insurance policy, in return for
  the viator's assignment, transfer, sale, devise or bequest of the  death
  benefit  or ownership of the insurance policy to the viatical settlement
  company.
    (d) "Viatical settlement broker"  means  an  individual,  partnership,
  corporation  or  other  entity  who  or which for another and for a fee,
  commission, or other valuable consideration, offers  or  advertises  the
  availability  of  viatical  settlements,  introduces viators to viatical
  settlement companies,  or  offers  or  attempts  to  negotiate  viatical
  settlements  between  a  viator  and  one  or  more  viatical settlement
  companies. "Viatical settlement broker" does not  include  an  attorney,
  accountant or a person acting under a power of attorney from the viator,
  retained  to  represent  the viator whose compensation is paid solely by
  the viator and without  regard  to  whether  a  viatical  settlement  is
  effected.