There are a few issues here.
Who owns the car (in whose name is the title?) You say he sold it to his sister, but it's registered, licensed and insured in DH name.
I don't think you can register a car you do not legally own, so am I correct to assume that DH is the owner?
If, for some reason your children have been and will be the owners and Dh is the registrant, I think you have a big problem on your hands.
Insurance is mandatory in NY and it must be issued in the name of the registrant and must remain in the name of the registrant at all times.
Most insurance companies require that there be an insurable interest to get insurance. Because your son doesn't own the car, he doesn't have an insurable interest. Thus, most insurance companies won't give him insurance. But it's probably not necessary as most policies cover people you allow to use your car -- in other words DH's insurance will probably cover him. Check your policy and speak to your agent.
I am not an insurance agent but I did stay at a Holiday Inn Express last night.
Less is not more. More is more and more is fabulous.