Senate Bill 2004er

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    1998 Legislature                 CS for SB 2004, 1st Engrossed



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  2         An act relating to the Viatical Settlement Act;

  3         amending s. 626.9911, F.S.; modifying

  4         definitions used in the act and adding a

  5         definition of related provider trust; amending

  6         s. 626.9913, F.S.; requiring viatical

  7         settlement providers to file certain

  8         information with the Department of Insurance;

  9         specifying applicability of fee and deposit

10         requirements; amending s. 626.9914, F.S.;

11         specifying liability of a viatical settlement

12         provider for a related provider trust; amending

13         s. 626.9921, F.S.; requiring certain providers

14         to file notice with the department; creating s.

15         626.99235, F.S.; prohibiting misrepresentation;

16         providing disclosure of required information;

17         providing an effective date.

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19  Be It Enacted by the Legislature of the State of Florida:

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21         Section 1.  Subsections (5) and (6) of section

22  626.9911, Florida Statutes, are amended and subsection (8) is

23  added to that section, to read:

24         626.9911  Definitions.--As used in this act, the term:

25         (5)  "Viatical settlement contract" means a written

26  settlement entered into between a viatical settlement

27  provider, or its related provider trust, and a viator.  The

28  agreement must establish the terms under which the viatical

29  settlement provider will pay compensation or anything of

30  value.

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    1998 Legislature                 CS for SB 2004, 1st Engrossed



  1         (6)  "Viatical settlement provider" means a person who,

  2  in this state or from this state, enters into a viatical

  3  settlement contract with a viator.  The term does not include:

  4         (a)  Any bank, savings bank, savings and loan

  5  association, credit union, or other licensed lending

  6  institution that takes an assignment of a life insurance

  7  policy as collateral for a loan;

  8         (b)  A life and health insurer that has lawfully issued

  9  a life insurance policy that provides accelerated benefits to

10  terminally ill policyholders or certificateholders; or

11         (c)  Any natural person who enters into no more than

12  one viatical settlement contract with a viator in 1 calendar

13  year, unless such natural person has previously been licensed

14  under this act or is currently licensed under this act.

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

16  provider trust".

17         (8)  "Related provider trust" means a trust established

18  by a viatical settlement provider for the sole purpose of

19  entering into or owning viatical settlement contracts. A

20  related provider trust shall be subject to all provisions of

21  this act that apply to the viatical settlement provider who

22  established the related provider trust, except s. 626.9912,

23  which shall not be applicable. A viatical settlement provider

24  may establish no more than one related provider trust, and the

25  sole trustee of such related provider trust shall be the

26  viatical settlement provider licensed under s. 626.9912. The

27  name of the licensed viatical settlement provider shall be

28  included within the name of the related provider trust.

29         Section 2.  Subsection (2) of section 626.9913, Florida

30  Statutes, is amended and subsection (4) is added to that

31  section, to read:


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    1998 Legislature                 CS for SB 2004, 1st Engrossed



  1         626.9913  Viatical settlement provider license

  2  continuance; annual report; fees; deposit.--

  3         (2)  Annually, on or before March 1, the viatical

  4  settlement provider licensee shall file a statement containing

  5  information the department requires and shall pay to the

  6  department a license fee in the amount of $500. A viatical

  7  settlement provider shall include in all statements filed with

  8  the department all information requested by the department

  9  regarding a related provider trust established by the viatical

10  settlement provider. The department may require more frequent

11  reporting.  Failure to timely file the annual statement or to

12  timely pay the license fee is grounds for immediate suspension

13  of the license.

14         (4)  There shall be no additional annual license fee or

15  deposit requirements under this act for a related provider

16  trust established by a viatical settlement provider.

17         Section 3.  Subsection (4) is added to section

18  626.9914, Florida Statutes, to read:

19         626.9914  Suspension, revocation, or nonrenewal of

20  viatical settlement provider license; grounds; administrative

21  fine.--

22         (4)  If a viatical settlement provider establishes a

23  related provider trust as permitted by this act, the viatical

24  settlement provider shall be liable and responsible for the

25  performance of all obligations of the related provider trust

26  under all viatical settlement contracts entered into by the

27  related provider trust, and for the compliance of the related

28  provider trust with all provisions of this act. Any violation

29  of this act by the related provider trust shall be deemed a

30  violation of this act by the viatical settlement provider as

31  well as the related provider trust. If the related provider


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    1998 Legislature                 CS for SB 2004, 1st Engrossed



  1  trust violates any provisions of this act, the department may

  2  exercise all remedies set forth in this act for such

  3  violations against the viatical settlement provider, as well

  4  as the related provider trust.

  5         Section 4.  Subsection (1) of section 626.9921, Florida

  6  Statutes, is amended, and subsection (3) is added to that

  7  section, to read:

  8         626.9921  Filing of forms; required procedures;

  9  approval.--

10         (1)  A viatical settlement contract form or related

11  form may be used in this state only after the viatical

12  settlement provider or related provider trust has filed the

13  form with the department and only after the form has been

14  approved by the department.

15         (3)  If a viatical settlement provider elects to use a

16  related provider trust in accordance with this act, the

17  viatical settlement provider shall file notice of its

18  intention to use a related provider trust with the department,

19  including a copy of the trust agreement of the related

20  provider trust.

21         Section 5.  Section 626.99235, Florida Statutes, is

22  created to read:

23         626.99235  Disclosures to investors;

24  misrepresentations.--

25         (1)  No person shall misrepresent the nature of the

26  return or the duration of time to obtain the return of any

27  investment related to one or more viatical settlements sold by

28  a viatical settlement provider or related provider trust.

29         (2)  The viatical settlement provider, itself or

30  through another person, shall provide in writing the following

31  disclosures to any investor or investor prospect:


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    1998 Legislature                 CS for SB 2004, 1st Engrossed



  1         (a)  That the return available under the viatical

  2  investment is directly tied to the projected life span or date

  3  of death of one or more viators;

  4         (b)  If a return is represented, the disclosure shall

  5  indicate the projected life span or date of death of the

  6  viator or viators whose life or lives are tied to the return.

  7         (c)  If required by the terms of the investment

  8  contract, that the investor may be responsible for the payment

  9  of insurance premiums on the life of the viator or late or

10  surrender fees or other costs related to the life insurance

11  policy on the life of the viator or viators which may reduce

12  the return.

13         (d)  The amount of any trust fees or other expenses, if

14  any, to be charged to the investor.

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16  The written disclosure required under this subsection shall be

17  conspicuously displayed in any investment agreement, and any

18  solicitation material furnished to the investor by such

19  provider, trust or person, and shall be in contrasting color

20  and in not less than 10 point type or no smaller than the

21  largest type on the page if larger than 10 point type.

22         Section 6.  This act shall take effect July 1, 1998.

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