The Florida Senate

626.9911  Definitions.--As used in this act, the term:

(1)  "Department" means the Department of Insurance.

(2)  "Independent third-party trustee or escrow agent" means an attorney, certified public accountant, financial institution, or other person providing escrow services under the authority of a regulatory body. The term does not include any person associated, affiliated, or under common control with a viatical settlement provider or viatical settlement broker.

(3)  "Person" has the meaning specified in s. 1.01.

(4)  "Viatical settlement broker" means a person who, on behalf of a viator and for a fee, commission, or other valuable consideration, offers or attempts to negotiate viatical settlement contracts between a viator resident in this state and one or more viatical settlement providers. Notwithstanding the manner in which the viatical settlement broker is compensated, a viatical settlement broker is deemed to represent only the viator and owes a fiduciary duty to the viator to act according to the viator's instructions and in the best interest of the viator. The term does not include an attorney, licensed Certified Public Accountant, or investment adviser lawfully registered with the Department of Banking and Finance under chapter 517, who is retained to represent the viator and whose compensation is paid directly by or at the direction and on behalf of the viator.

(5)  "Viatical settlement contract" means a written agreement entered into between a viatical settlement provider, or its related provider trust, and a viator. The agreement must establish the terms under which the viatical settlement provider will pay compensation or anything of value, which compensation or value is less than the expected death benefit of the insurance policy or certificate, in return for the viator's assignment, transfer, sale, devise, or bequest of the death benefit or ownership of all or a portion of the insurance policy or certificate of insurance to the viatical settlement provider. A viatical settlement contract also includes a contract for a loan or other financial transaction secured primarily by an individual or group life insurance policy, other than a loan by a life insurance company pursuant to the terms of the life insurance contract, or a loan secured by the cash value of a policy.

(6)  "Viatical settlement provider" means a person who, in this state, from this state, or with a resident of this state, effectuates a viatical settlement contract. The term does not include:

(a)  Any bank, savings bank, savings and loan association, credit union, or other licensed lending institution that takes an assignment of a life insurance policy as collateral for a loan;

(b)  A life and health insurer that has lawfully issued a life insurance policy that provides accelerated benefits to terminally ill policyholders or certificateholders; or

(c)  Any natural person who enters into no more than one viatical settlement contract with a viator in 1 calendar year, unless such natural person has previously been licensed under this act or is currently licensed under this act.

(d)  A trust that meets the definition of a "related provider trust."

(e)  A viatical settlement provider, who from this state, enters into a viatical settlement purchase agreement with a purchaser who is resident of a state, other than Florida, which has enacted statutes or promulgated regulations governing viatical settlement purchase agreements. Such viatical settlement purchase agreements shall be governed in the effectuation of that viatical settlement purchase agreement, under the statutes and regulations governing viatical settlement purchase agreements in the purchaser's state of residence.

(f)  A viatical settlement provider who, from this state, enters into a viatical settlement contract with a viator who is resident of a state, other than Florida, which has enacted statutes or promulgated regulations governing viatical settlement contracts. Such viatical settlement contracts shall be governed in the effectuation of that viatical settlement contract, under the statutes and regulations governing viatical settlement contracts in the viator's state of residence.

(g)  A viator in this state.

(h)  A viatical settlement purchaser.

(7)  "Viator" means the owner of a life insurance policy or a certificateholder under a group policy insuring the life of an individual with a catastrophic or life-threatening illness or condition who enters or seeks to enter into a viatical settlement contract. This term does not include a viatical settlement purchaser or a viatical settlement provider or any person acquiring a policy or interest in a policy from a viatical settlement provider, nor does it include an independent third-party trustee or escrow agent.

(8)  "Related provider trust" means a trust established by a viatical settlement provider for the sole purpose of entering into or owning viatical settlement contracts. This term does not include an independent third-party trustee or escrow agent or a trust that does not enter into agreements with a viatical settlement purchaser. A related provider trust shall be subject to all provisions of this act that apply to the viatical settlement provider who established the related provider trust, except s. 626.9912, which shall not be applicable. A viatical settlement provider may establish no more than one related provider trust, and the sole trustee of such related provider trust shall be the viatical settlement provider licensed under s. 626.9912. The name of the licensed viatical settlement provider shall be included within the name of the related provider trust.

(9)  "Viatical settlement purchase agreement" means a contract or agreement, entered into by a viatical settlement purchaser, to which the viator is not a party, to purchase a life insurance policy or an interest in a life insurance policy, which is entered into for the purpose of deriving an economic benefit.

(10)  "Viatical settlement purchaser" means a person, other than a licensee under this part, an accredited investor as defined in Rule 501, Regulation D of the Securities Act Rules, or a qualified institutional buyer as defined by Rule 144(a) of the Federal Securities Act, or a special purpose entity which is created solely to act as a financing source for the viatical settlement provider, who gives a sum of money as consideration for a life insurance policy or an interest in the death benefits of a life insurance policy which has been or will be the subject of a viatical settlement contract, for the purpose of deriving an economic benefit. The above references to Rule 501, Regulation D and Rule 144(a) of the Federal Securities Act are used strictly for defining purposes and shall not be interpreted in any other manner.

(11)  "Viatical settlement sales agent" means a person other than a licensed viatical settlement provider who arranges the purchase through a viatical settlement purchase agreement of a life insurance policy or an interest in a life insurance policy.

History.--s. 2, ch. 96-336; s. 22, ch. 97-93; s. 1, ch. 98-164; s. 1, ch. 99-212.