Background: Widow, as personal representative of her deceased husband’s estate, brought action against life insurers, trustees, insurance broker, and “stranger” investors allegedly involved in strangerowned life insurance (SOLI) scheme in which her deceased husband participated, seeking to have policy proceeds paid to her. Defendants filed counterclaims. The United States District Court for the Southern District of New York, Deborah A. Batts, J., 653 F.Supp.2d 354, dismissed in part, and appeal was taken. The United States Court of Appeals for the Second Circuit certified question regarding whether the SOLI scheme violated New York law.
Holding: The Court of Appeals, Ciparick, J., held that New York law permits a person to procure an
insurance policy on his or her own life and immediately transfer it to one without an insurable interest in that life, even where the policy was obtained for just such a purpose.