Senate Bill 1956er

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  1

  2         An act relating to viatical settlements;

  3         amending s. 626.9911, F.S.; redefining the

  4         terms "viatical settlement contract," "viatical

  5         settlement provider," "viator," "related

  6         provider trust," and "viatical settlement

  7         purchaser"; defining the terms "viaticated

  8         policy," "related form," "special purpose

  9         entity," and "financing entity"; amending s.

10         626.9912, F.S.; requiring additional

11         information for license applications; amending

12         s. 626.9921, F.S.; providing for additional

13         forms; amending s. 626.9922, F.S.; revising

14         recordkeeping time requirements; defining the

15         term "home office"; providing that records be

16         made available; creating s. 626.99236, F.S.;

17         providing for disclosure to viatical settlement

18         purchasers; providing for rescission of

19         agreements; amending s. 626.9924, F.S.;

20         providing for notice of viaticated policies;

21         requiring notice of transfer of ownership or

22         change in beneficiary within a specified period

23         of time; creating s. 626.99245, F.S.; providing

24         for the regulation of interstate conflicts;

25         amending s. 626.9925, F.S.; providing

26         additional rulemaking authority; amending s.

27         626.99275, F.S.; providing criminal penalties;

28         creating s. 626.99278, F.S.; requiring the

29         adoption of an anti-fraud plan; creating s.

30         626.99285, F.S.; providing for the

31         applicability of the Insurance Code; creating


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  1         s. 626.99287, F.S.; providing for the

  2         contestability of viaticated policies; creating

  3         626.99295, F.S.; providing for a grace period

  4         for unlicensed viatical settlement providers

  5         and viatical settlement brokers; amending s.

  6         626.9915, F.S.; allowing a provider whose

  7         license is suspended or revoked to continue to

  8         maintain and service viaticated policies if the

  9         department approves; providing an

10         appropriation; providing an effective date.

11

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

13

14         Section 1.  Subsections (5), (6), (7), (8), and (10) of

15  section 626.9911, Florida Statutes, are amended and

16  subsections (12), (13), (14), and (15) are added to that

17  section to read:

18         626.9911  Definitions.--As used in this act, the term:

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

20  agreement entered into between a viatical settlement provider,

21  or its related provider trust, and a viator. The viatical

22  settlement contract includes an agreement to transfer

23  ownership or change the beneficiary designation of a life

24  insurance policy at a later date, regardless of the date that

25  compensation is paid to the viator.  The agreement must

26  establish the terms under which the viatical settlement

27  provider will pay compensation or anything of value, which

28  compensation or value is less than the expected death benefit

29  of the insurance policy or certificate, in return for the

30  viator's assignment, transfer, sale, devise, or bequest of the

31  death benefit or ownership of all or a portion of the


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  1  insurance policy or certificate of insurance to the viatical

  2  settlement provider.  A viatical settlement contract also

  3  includes a contract for a loan or other financial transaction

  4  secured primarily by an individual or group life insurance

  5  policy, other than a loan by a life insurance company pursuant

  6  to the terms of the life insurance contract, or a loan secured

  7  by the cash value of a policy.

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

  9  in this state, from this state, or with a resident of this

10  state, effectuates a viatical settlement contract.  The term

11  does not include:

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

13  association, credit union, or other licensed lending

14  institution that takes an assignment of a life insurance

15  policy as collateral for a loan;

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

17  a life insurance policy that provides accelerated benefits to

18  terminally ill policyholders or certificateholders; or

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

20  one viatical settlement contract with a viator in 1 calendar

21  year, unless such natural person has previously been licensed

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

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

24  provider trust."

25         (e)  A viatical settlement provider, who from this

26  state, enters into a viatical settlement purchase agreement

27  with a purchaser who is resident of a state, other than

28  Florida, which has enacted statutes or promulgated regulations

29  governing viatical settlement purchase agreements. Such

30  viatical settlement purchase agreements shall be governed in

31  the effectuation of that viatical settlement purchase


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  1  agreement, under the statutes and regulations governing

  2  viatical settlement purchase agreements in the purchaser's

  3  state of residence.

  4         (f)  A viatical settlement provider who, from this

  5  state, enters into a viatical settlement contract with a

  6  viator who is resident of a state, other than Florida, which

  7  has enacted statutes or promulgated regulations governing

  8  viatical settlement contracts. Such viatical settlement

  9  contracts shall be governed in the effectuation of that

10  viatical settlement contract, under the statutes and

11  regulations governing viatical settlement contracts in the

12  viator's state of residence.

13         (e)(g)  A viator in this state.

14         (f)(h)  A viatical settlement purchaser.

15         (g)  A financing entity.

16         (7)  "Viator" means the owner of a life insurance

17  policy or a certificateholder under a group policy insuring

18  the life of an individual with a catastrophic or

19  life-threatening illness or condition who enters or seeks to

20  enter into a viatical settlement contract. This term does not

21  include a viatical settlement purchaser or a viatical

22  settlement provider or any person acquiring a policy or

23  interest in a policy from a viatical settlement provider, nor

24  does it include an independent third-party trustee or escrow

25  agent.

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

27  by a viatical settlement provider for the sole purpose of

28  entering into or owning viatical settlement contracts. This

29  term does not include an independent third-party trustee or

30  escrow agent or a trust that does not enter into agreements

31  with a viator viatical settlement purchaser.  A related


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  1  provider trust shall be subject to all provisions of this act

  2  that apply to the viatical settlement provider who established

  3  the related provider trust, except s. 626.9912, which shall

  4  not be applicable. A viatical settlement provider may

  5  establish no more than one related provider trust, and the

  6  sole trustee of such related provider trust shall be the

  7  viatical settlement provider licensed under s. 626.9912. The

  8  name of the licensed viatical settlement provider shall be

  9  included within the name of the related provider trust.

10         (10)  "Viatical settlement purchaser" means a person,

11  other than a licensee under this part, an accredited investor

12  as defined in Rule 501, Regulation D of the Securities Act

13  Rules, or a qualified institutional buyer as defined by Rule

14  144(a) of the Federal Securities Act, or a special purpose

15  entity which is created solely to act as a financing source

16  for the viatical settlement provider, who gives a sum of money

17  as consideration for a life insurance policy or an equitable

18  or legal interest in the death benefits of a life insurance

19  policy which has been or will be the subject of a viatical

20  settlement contract, for the purpose of deriving an economic

21  benefit. The above references to Rule 501, Regulation D and

22  Rule 144(a) of the Federal Securities Act are used strictly

23  for defining purposes and shall not be interpreted in any

24  other manner. Any person who claims to be an accredited

25  investor shall sign an affidavit stating that he or she is an

26  accredited investor, the basis of that claim, and that he or

27  she understands that as an accredited investor he or she will

28  not be entitled to certain protections of the Viatical Act.

29  This affidavit must be kept with other documents required to

30  be maintained by this act.

31


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  1         (11)  "Viatical settlement sales agent" means a person

  2  other than a licensed viatical settlement provider who

  3  arranges the purchase through a viatical settlement purchase

  4  agreement of a life insurance policy or an interest in a life

  5  insurance policy.

  6         (12)  "Viaticated policy" means a life insurance

  7  policy, or a certificate under a group policy, which is the

  8  subject of a viatical settlement contract.

  9         (13)  "Related form" means any form, created by or on

10  behalf of a licensee, which a viator or viatical settlement

11  purchaser is required to sign or initial. The forms include,

12  but are not limited to, a power of attorney, a release of

13  medical information form, a suitability questionnaire, a

14  disclosure document, or any addendum, schedule, or amendment

15  to a viatical settlement contract or viatical settlement

16  purchase agreement considered necessary by a provider to

17  effectuate a viatical settlement transaction.

18         (14)  "Special purpose entity" means an entity

19  established by a licensed viatical settlement provider, which

20  may be a corporation, partnership, trust, or other similar

21  entity formed solely to act as a vehicle to permit a lender to

22  the provider to access institutional capital markets for the

23  provider. A special purpose entity shall not enter into a

24  viatical settlement contract or a viatical settlement purchase

25  agreement.

26         (15)  "Financing entity" means an underwriter,

27  placement agent, lender, purchaser of securities, or purchaser

28  of a policy or certificate from a viatical settlement

29  provider, credit enhancer, or any person that may be a party

30  to a viatical settlement contract and that has direct

31  ownership in a policy or certificate that is the subject of a


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  1  viatical settlement contract, but whose sole activity related

  2  to the transaction is providing funds or credit enhancement to

  3  effect the viatical settlement and who has an agreement in

  4  writing with a licensed viatical settlement provider to act as

  5  a participant in a financing transaction. The term does not

  6  include a nonaccredited investor or other natural person.

  7         Section 2.  Subsection (1), paragraph (f) of subsection

  8  (3), subsection (4), and paragraph (b) of subsection (5) of

  9  section 626.9912, Florida Statutes, are amended to read:

10         626.9912  Viatical settlement provider license

11  required; application for license.--

12         (1)  After July 1, 1996, A person may not perform the

13  functions of a viatical settlement provider as defined in this

14  act or enter into or solicit a viatical settlement contract

15  without first having obtained a license from the department.

16         (3)  In the application, the applicant must provide all

17  of the following:

18         (f)  All applications, viatical settlement contract

19  forms, viatical settlement purchase agreement forms, escrow

20  forms rating manuals, and other related forms proposed to be

21  used by the applicant.

22         (4)  The department may not issue a license to an

23  entity other than a natural person if it is not satisfied that

24  all officers, directors, employees, stockholders, and

25  partners, and any other persons who exercise or have the

26  ability to exercise effective control of the entity or who

27  have the ability to influence the transaction of business by

28  the entity meet the standards of this act and have not

29  violated any provision of this act or rules of the department

30  related to the business of viatical settlement contracts or

31  viatical settlement purchase agreements.


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  1         (5)  Upon the filing of a sworn application and the

  2  payment of the license fee, the department shall investigate

  3  each applicant and may issue the applicant a license if the

  4  department finds that the applicant:

  5         (b)  Is competent and trustworthy and intends to act in

  6  good faith in the business authorized by the license applied

  7  for; however, for purposes of this act, including this

  8  paragraph, a person shall not be deemed to be incompetent and

  9  untrustworthy solely for any felony committed more than 5

10  years before licensure if the person has had his or her civil

11  rights restored by the Governor and Cabinet with respect to

12  such felony.

13         Section 3.  Section 626.9921, Florida Statutes, is

14  amended to read:

15         626.9921  Filing of forms; required procedures;

16  approval.--

17         (1)  A viatical settlement contract form, viatical

18  settlement purchase agreement form, escrow form, or related

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

20  settlement provider or any related provider trust has filed

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

22  approved by the department.

23         (2)  The viatical settlement contract form, viatical

24  settlement purchase agreement form, escrow form, or related

25  form must be filed with the department at least 60 days before

26  its use.  The A contract form or related form is considered

27  approved on the 60th day after its date of filing unless it

28  has been previously disapproved by the department. The

29  department must disapprove a viatical settlement contract

30  form, viatical settlement purchase agreement form, escrow

31  form, or related form that is unreasonable, contrary to the


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  1  public interest, discriminatory, or misleading or unfair to

  2  the viator or the purchaser.

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

  4  related provider trust in accordance with this act, the

  5  viatical settlement provider shall file notice of its

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

  7  including a copy of the trust agreement of the related

  8  provider trust. The organizational documents of the trust must

  9  be submitted to and approved by the department before the

10  transacting of business by the trust.

11         (4)  The department may adopt, by rule, standardized

12  forms to be used by licensees, at the licensee's option in

13  place of separately approved forms.

14         Section 4.  Subsection (2) of section 626.9922, Florida

15  Statutes, is amended and subsections (3), (4), and (5) are

16  added to that section to read:

17         626.9922  Examination.--

18         (1)  The department may examine the business and

19  affairs of any licensee or applicant for a license.  The

20  department may order any licensee or applicant to produce any

21  records, books, files, advertising and solicitation materials,

22  or other information and may take statements under oath to

23  determine whether the licensee or applicant is in violation of

24  the law or is acting contrary to the public interest.  The

25  expenses incurred in conducting any examination or

26  investigation must be paid by the licensee or applicant.

27  Examinations and investigations must be conducted as provided

28  in chapter 624, and licensees are subject to all applicable

29  provisions of the insurance code.

30         (2)  All accounts, books and records, documents, files,

31  contracts, and other information relating to all transactions


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  1  of viatical settlement contracts or viatical settlement

  2  purchase agreements must be maintained by the licensee for a

  3  period of at least 3 years after the death of the insured and

  4  must be available to the department for inspection during

  5  reasonable business hours.

  6         (3)  All such records or accurate copies of such

  7  records must be maintained at the licensee's home office. As

  8  used in this section, the term "home office" means the

  9  principal place of business and any other single storage

10  facility, the street address of which shall be disclosed to

11  the department within 20 days after its initial use, or within

12  20 days of the effective date of this subsection.

13         (4)  The originals of records required to be maintained

14  under this section must be made available to the department

15  for examination at the department's request.

16         Section 5.  Section 626.99236, Florida Statutes, is

17  created to read:

18         626.99236  Further disclosures to viatical settlement

19  purchasers.--

20         (1)  No later than 5 days prior to the assignment,

21  transfer, sale, devise, or bequest of the death benefit or

22  ownership of all or a portion of the insurance policy or

23  certificate of insurance to the purchaser, the viatical

24  settlement provider, itself or through another person, shall

25  provide in writing the following disclosures to any viatical

26  settlement purchaser:

27         (a)  All the life expectancy certifications obtained by

28  the provider.

29         (b)  The name and address of the insurance company, the

30  policy number, and the date of original issue of the

31  viaticated policy.


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  1         (c)  The experience and qualifications of the person

  2  issuing the life expectancy certification, and that person's

  3  relationship to the viatical settlement provider, the viatical

  4  settlement broker, the viatical settlement sales agent, and

  5  the viator.

  6         (d)  The name and address of any person providing

  7  escrow services, and that person's relationship to the

  8  viatical settlement provider, the viatical settlement broker,

  9  the viatical settlement sales agent, and the viator.

10         (e)  The type of life insurance policy offered or sold,

11  including a statement as to whether the policy is whole life,

12  term life, universal life, or a group policy certificate; a

13  statement as to whether the policy is in lapse status or has

14  lapsed in the last two years; and a statement as to whether

15  the purchaser is entitled to benefits contained in the policy

16  other than the death benefit of the policy.

17         (f)  The procedure to be used by the provider to

18  provide the status of the health condition of the insured to a

19  purchaser.

20         (2)  The viatical settlement purchase agreement is

21  voidable by the purchaser at anytime within three days after

22  the disclosures mandated by this section are received by the

23  purchaser.

24         (3)  At the time the disclosures in subsection (1) are

25  made, the viatical settlement purchaser shall be advised to

26  seek independent financial advice from a person not

27  compensated by the viatical settlement provider or viatical

28  settlement broker or the viatical settlement sales agent. The

29  viatical settlement purchaser shall sign an affidavit that he

30  or she has received the disclosures and understands their

31  importance.


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  1         Section 6.  Subsection (1) of section 626.9924, Florida

  2  Statutes, is amended, and subsections (7), (8), and (9) are

  3  added to that section to read:

  4         626.9924  Viatical settlement contracts; procedures;

  5  rescission.--

  6         (1)  A viatical settlement provider entering into a

  7  viatical settlement contract with any viator must first obtain

  8  a witnessed document in which the viator consents to the

  9  viatical settlement contract, acknowledges the catastrophic or

10  life-threatening illness, represents that he or she has a full

11  and complete understanding of the viatical settlement contract

12  and the benefits of the life insurance policy, releases his or

13  her medical records, and acknowledges that he or she has

14  entered into the viatical settlement contract freely and

15  voluntarily.

16         (7)  At any time during the contestable period, within

17  20 days after a viator executes documents necessary to

18  transfer rights under an insurance policy or within 20 days of

19  any agreement, option, promise, or any other form of

20  understanding, express or implied, to viaticate the policy,

21  the provider must give notice to the insurer of the policy

22  that the policy has or will become a viaticated policy. The

23  notice must be accompanied by the documents required by s.

24  626.99287(5)(a) in their entirety.

25         (8)  If the owner of the insurance policy is not the

26  insured, the provider shall notify the insured that the policy

27  has become the subject of a viatical settlement contract

28  within 20 days after the transfer of rights under the

29  contract.

30         (9)  If the provider transfers ownership or changes the

31  beneficiary of the insurance policy, the provider must


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  1  communicate the initial change in ownership or beneficiary to

  2  the insured within 20 days after the change.

  3         Section 7.  Section 626.99245, Florida Statutes, is

  4  created to read:

  5         626.99245  Conflict of regulation of viaticals.--

  6         (1)  A viatical settlement provider who from this state

  7  enters into a viatical settlement purchase agreement with a

  8  purchaser who is resident of another state that has enacted

  9  statutes or adopted regulations governing viatical settlement

10  purchase agreements, shall be governed in the effectuation of

11  that viatical settlement purchase agreement by the statutes

12  and regulations of the purchaser's state of residence. If the

13  state in which the purchaser is a resident has not enacted

14  statutes or regulations governing viatical settlement purchase

15  agreements, the provider shall give the purchaser notice that

16  neither Florida nor his or her state regulates the transaction

17  upon which he or she is entering. For transactions in these

18  states, however, the viatical settlement provider is to

19  maintain all records required as if the transactions were

20  executed in Florida. However, the forms used in those states

21  need not be approved by the department.

22         (2)  A viatical settlement provider who from this state

23  enters into a viatical settlement contract with a viator who

24  is resident of another state that has enacted statutes or

25  adopted regulations governing viatical settlement contracts

26  shall be governed in the effectuation of that viatical

27  settlement contract by the statutes and regulations of the

28  viator's state of residence. If the state in which the viator

29  is a resident has not enacted statutes or regulations

30  governing viatical settlement agreements, the provider shall

31  give the viator notice that neither Florida nor his or her


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  1  state regulates the transaction upon which he or she is

  2  entering. For transactions in those states, however, the

  3  viatical settlement provider is to maintain all records

  4  required as if the transactions were executed in Florida. The

  5  forms used in those states need not be approved by the

  6  department.

  7         Section 8.  Section 626.9925, Florida Statutes, is

  8  amended to read:

  9         626.9925  Rules.--The department may adopt rules to

10  administer implement this act, including rules establishing

11  standards for evaluating advertising by licensees; and rules

12  providing for the collection of data, for disclosures to

13  viators or purchasers, and for the reporting of life

14  expectancies; and rules defining terms used in this act and

15  prescribing recordkeeping requirements relating to executed

16  viatical settlement contracts and viatical settlement purchase

17  agreements.

18         Section 9.  Section 626.99275, Florida Statutes, is

19  amended to read:

20         626.99275  Prohibited practices; penalties.--

21         (1)  It is unlawful for any person:

22         (a)(1)  To knowingly enter into, broker, or otherwise

23  deal in a viatical settlement contract the subject of which is

24  a life insurance policy, knowing that the policy was obtained

25  by presenting materially false information concerning any fact

26  material to the policy or by concealing, for the purpose of

27  misleading another, information concerning any fact material

28  to the policy, where the viator or the viator's agent intended

29  to defraud the policy's issuer that was obtained by means of a

30  false, deceptive, or misleading application for the life

31  insurance policy.


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  1         (b)(2)  In the solicitation or sale of a viatical

  2  settlement purchase agreement:

  3         1.(a)  To employ any device, scheme, or artifice to

  4  defraud;

  5         2.(b)  To obtain money or property by means of an

  6  untrue statement of a material fact or by any omission to

  7  state a material fact necessary in order to make the

  8  statements made, in light of the circumstances under which

  9  they were made, not misleading; or

10         3.(c)  To engage in any transaction, practice, or

11  course of business which operates or would operate as a fraud

12  or deceit upon a person.

13         (c)  To knowingly engage in any transaction, practice,

14  or course of business intending thereby to avoid the notice

15  requirements of s. 626.9924(7).

16         (2)  A person who violates any provision of this

17  section commits:

18         (a)  A felony of the third degree, punishable as

19  provided in s. 775.082, s. 774.083, or s. 775.084, if the

20  insurance policy involved is valued at any amount less than

21  $20,000.

22         (b)  A felony of the second degree, punishable as

23  provided in s. 775.082, s. 774.083, or s. 775.084, if the

24  insurance policy involved is valued at $20,000 or more, but

25  less than $100,000.

26         (c)  A felony of the first degree, punishable as

27  provided in s. 775.082, s. 774.083, or s. 775.084, if the

28  insurance policy involved is valued at $100,000 or more.

29         Section 10.  Section 626.99278, Florida Statutes, is

30  created to read:

31


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  1         626.99278  Viatical provider anti-fraud plan.--Every

  2  licensed viatical settlement provider and viatical settlement

  3  broker must adopt an anti-fraud plan and file it with the

  4  Division of Insurance Fraud of the department on or before

  5  December 1, 2000. Each anti-fraud plan shall include:

  6         (1)  A description of the procedures for detecting and

  7  investigating possible fraudulent acts and procedures for

  8  resolving material inconsistencies between medical records and

  9  insurance applications;

10         (2)  A description of the procedures for the mandatory

11  reporting of possible fraudulent insurance acts to the

12  Division of Insurance Fraud of the department;

13         (3)  A description of the plan for anti-fraud education

14  and training of its underwriters or other personnel; and

15         (4)  A written description or chart outlining the

16  organizational arrangement of the anti-fraud personnel who are

17  responsible for the investigation and reporting of possible

18  fraudulent insurance acts, and investigating unresolved

19  material inconsistencies between medical records and insurance

20  applications.

21         Section 11.  Section 626.99285, Florida Statutes, is

22  created to read:

23         626.99285  Applicability of Insurance Code.--In

24  addition to other applicable provisions cited in the Insurance

25  Code, the department has the authority granted under ss.

26  624.310, 626.901, and 626.989 to regulate viatical settlement

27  providers, viatical settlement brokers, viatical settlement

28  sales agents, viatical settlement contracts, viatical

29  settlement purchase agreements, and viatical settlement

30  transactions.

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  1         Section 12.  Section 626.99287, Florida Statutes, is

  2  created to read:

  3         626.99287  Contestability of viaticated

  4  policies.--Except as hereinafter provided, if a viatical

  5  settlement contract is entered into within the 2-year period

  6  commencing with the date of issuance of the insurance policy

  7  or certificate to be acquired, the viatical settlement

  8  contract is void and unenforceable by either party.

  9  Notwithstanding this limitation, such a viatical settlement

10  contract is not void and unenforceable if:

11         (1)  The policy was issued upon the owner's exercise of

12  conversion rights arising out of a group or term policy;

13         (2)  The owner of the policy is a charitable

14  organization exempt from taxation under 26 U.S.C. s.

15  501(c)(3);

16         (3)  The owner of the policy is not a natural person;

17         (4)  The viatical settlement contract was entered into

18  before July 1, 2000;

19         (5)  The viator certifies by producing independent

20  evidence to the viatical settlement provider that one or more

21  of the following conditions have been met within the 2-year

22  period;

23         (a)1.  The viator or insured is diagnosed with an

24  illness or condition that is either;

25         a.  Catastrophic or life threatening; or

26         b.  Requires a course of treatment for a period of at

27  least 3 years of long-term care or home-health care; and

28         2.  The condition was not known to the insured at the

29  time the life insurance contract was entered into.

30         (b)  The viator's spouse dies;

31         (c)  The viator divorces his or her spouse;


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  1         (d)  The viator retires from full-time employment;

  2         (e)  The viator becomes physically or mentally disabled

  3  and a physician determines that the disability prevents the

  4  viator from maintaining full-time employment;

  5         (f)  The owner of the policy was that the insured's

  6  employer at the time the policy or certificate was issued and

  7  the employment relationship terminated;

  8         (g)  A final order, judgment, or decree is entered by a

  9  court of competent jurisdiction, on the application of a

10  creditor of the viator, adjudicating the viator bankrupt or

11  insolvent, or approving a petition seeking reorganization of

12  the viator or appointing a receiver, trustee, or liquidator to

13  all or a substantial part of the viator's assets; or

14         (h)  The viator experiences a significant decrease in

15  income which is unexpected by the viator and which impairs his

16  or her reasonable ability to pay the policy premium.

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18  If the viatical settlement provider submits to the insurer a

19  copy of the viator's or owner's certification described above

20  then the provider submits a request to the insurer to effect

21  the transfer of the policy or certificate to the viatical

22  settlement provider, the viatical settlement agreement shall

23  not be void or unenforceable by operation of this section. The

24  insurer shall timely respond to such request. Nothing in this

25  section shall prohibit an insurer from exercising its right

26  during the contestability period to contest the validity of

27  any policy on grounds of fraud.

28         Section 13.  Section 626.99295, Florida Statutes, is

29  created to read:

30         626.99295  Grace period.--An unlicensed viatical

31  settlement provider or viatical settlement broker that was


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  1  legally transacting business in this state on June 30, 2000,

  2  may continue to transact such business, in the absence of any

  3  orders by the department to the contrary, until the department

  4  approves or disapproves the viatical settlement provider's

  5  application for licensure if the viatical settlement provider

  6  or viatical settlement broker files with the department an

  7  application for licensure no later than August 1, 2000, and if

  8  the viatical settlement provider or viatical settlement broker

  9  complies with all other provisions of this act. Any form for

10  which department approval is required under this part must be

11  filed by August 1, 2000, and may continue to be used until

12  disapproved by the department.

13         Section 14.  Subsection (1) of section 626.9915,

14  Florida Statutes, is amended to read:

15         626.9915  Effect of suspension or revocation of

16  viatical settlement provider license; duration of suspension;

17  reinstatement.--

18         (1)  When its license is suspended or revoked, the

19  provider must proceed, immediately following the effective

20  date of the suspension or revocation, to conclude the affairs

21  it is transacting under its license. The provider may not

22  solicit, negotiate, advertise, or effectuate new contracts.

23  The department retains jurisdiction over the provider until

24  all contracts have been fulfilled or canceled or have expired.

25  A provider whose license is suspended or revoked may continue

26  to maintain and service viaticated policies subject to the

27  approval of the department.

28         Section 15.  Effective July 1, 2000, the sum of

29  $250,000 is appropriated for the 2000-2001 fiscal year from

30  the Insurance Commissioner's Regulatory Trust Fund to the

31


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  1  Department of Insurance to fund four positions for the purpose

  2  of carrying out the provisions of this act.

  3         Section 16.  This act shall take effect July 1, 2000.

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