HOUSE AMENDMENT
Bill No. HB 1507
Amendment No. 1 (for drafter's use only)
CHAMBER ACTION
Senate House
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5 ORIGINAL STAMP BELOW
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11 The Committee on Insurance offered the following:
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13 Amendment (with title amendment)
14 Remove from the bill: Everything after the enacting clause
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16 and insert in lieu thereof:
17 Section 1. Subsections (8), (9), (10), (14), and (15)
18 of section 626.9911, Florida Statutes, are amended to read:
19 626.9911 Definitions.--As used in this act, the term:
20 (8) "Related provider trust" means a titling trust or
21 other trust established by a licensed viatical settlement
22 provider or a financing entity for the sole purpose of holding
23 the ownership or beneficial interest in purchased policies in
24 connection with a financing transaction. The trust must have
25 a written agreement with a licensed viatical settlement
26 provider or financing entity under which the licensed viatical
27 settlement provider or financing entity is responsible for
28 insuring compliance with all statutory and regulatory
29 requirements and under which the trust agrees to make all
30 records and files relating to viatical settlement transactions
31 available to the department as if those records and files were
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HOUSE AMENDMENT
Bill No. HB 1507
Amendment No. 1 (for drafter's use only)
1 maintained directly by the licensed viatical settlement
2 provider entering into or owning viatical settlement
3 contracts. This term does not include an independent
4 third-party trustee or escrow agent or a trust that does not
5 enter into agreements with a viator. A related provider trust
6 shall be subject to all provisions of this act that apply to
7 the viatical settlement provider who established the related
8 provider trust, except s. 626.9912, which shall not be
9 applicable. A viatical settlement provider may establish no
10 more than one related provider trust, and the sole trustee of
11 such related provider trust shall be the viatical settlement
12 provider licensed under s. 626.9912. The name of the licensed
13 viatical settlement provider shall be included within the name
14 of the related provider trust.
15 (9) "Viatical settlement purchase agreement" means a
16 contract or agreement, entered into by a viatical settlement
17 purchaser, to which the viator is not a party, to purchase a
18 life insurance policy or an interest in a life insurance
19 policy, which is entered into for the purpose of deriving an
20 economic benefit. The term also includes purchases made in
21 the secondary market, that is, purchases from any person other
22 than the provider who effectuated the viatical settlement
23 contract.
24 (10) "Viatical settlement purchaser" means a person
25 who gives a sum of money as consideration for a life insurance
26 policy or an equitable or legal interest in the death benefits
27 of a life insurance policy which has been or will be the
28 subject of a viatical settlement contract, for the purpose of
29 deriving an economic benefit, including purchases made in the
30 secondary market, that is, purchases from any person other
31 than the provider who effectuated the viatical settlement
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HOUSE AMENDMENT
Bill No. HB 1507
Amendment No. 1 (for drafter's use only)
1 contract or an entity affiliated with the provider.
2 The term does not include ,other than a licensee under
3 this part, an accredited investor as defined in Rule 501,
4 Regulation D of the Securities Act Rules, or a qualified
5 institutional buyer as defined by Rule 144(a) of the Federal
6 Securities Act, or a special purpose entity who gives a sum of
7 money as consideration for a life insurance policy or an
8 equitable or legal interest in the death benefits of a life
9 insurance policy which has been or will be the subject of a
10 viatical settlement contract, for the purpose of deriving an
11 economic benefit.
12 The above references to Rule 501, Regulation D and Rule
13 144(a) of the Federal Securities Act are used strictly for
14 defining purposes and shall not be interpreted in any other
15 manner. Any person who claims to be an accredited investor
16 shall sign an affidavit stating that he or she is an
17 accredited investor, the basis of that claim, and that he or
18 she understands that as an accredited investor he or she will
19 not be entitled to certain protections of the Viatical Act.
20 This affidavit must be kept with other documents required to
21 be maintained by this act.
22 (14) "Special purpose entity" means an entity
23 established by a licensed viatical settlement provider, which
24 may be a corporation, partnership, trust, limited liability
25 company, or other similar entity formed solely to provide,
26 either directly or indirectly, access to act as a vehicle to
27 permit a lender to the provider to access institutional
28 capital markets to a viatical settlement for the provider or a
29 financing entity. A special purpose entity shall not enter
30 into a viatical settlement contract or a viatical settlement
31 purchase agreement.
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HOUSE AMENDMENT
Bill No. HB 1507
Amendment No. 1 (for drafter's use only)
1 (15) "Financing entity" means an underwriter,
2 placement agent, lender, purchaser of securities, or purchaser
3 of a policy or certificate from a viatical settlement
4 provider, credit enhancer, or any entity person that may be a
5 party to a viatical settlement contract and that has direct
6 ownership in a policy or certificate that is the subject of a
7 viatical settlement contract, but whose principal sole
8 activity related to the transaction is providing funds or
9 credit enhancement to effect the viatical settlement and who
10 has an agreement in writing with one or more licensed viatical
11 settlement providers a licensed viatical settlement provider
12 to act as a participant in a financing transaction. The term
13 does not include a nonaccredited investor, a viatical
14 settlement purchaser, or other natural person. A financing
15 entity shall not enter into a viatical settlement contract.
16 Section 2. Subsection (1) of section 626.9921, Florida
17 Statutes, is amended to read:
18 626.9921 Filing of forms; required procedures;
19 approval.--
20 (1) A viatical settlement contract form, viatical
21 settlement purchase agreement form, escrow form, or related
22 form may be used in this state only after the viatical
23 settlement provider or any related provider trust has filed
24 the form has been filed with the department and only after the
25 form has been approved by the department.
26 Section 3. Subsection (3) is added to section
27 626.99235, Florida Statutes, to read: 626.99235 Disclosures
28 to viatical settlement purchasers; misrepresentations.--
29 (3) The requirements of this section also apply to
30 purchases made in the secondary market, which involve
31 purchases from any person other than the provider who
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HOUSE AMENDMENT
Bill No. HB 1507
Amendment No. 1 (for drafter's use only)
1 effectuated the viatical settlement contract.
2 Section 4. Section 626.99236, Florida Statutes, is
3 amended to read:
4 626.99236 Further disclosures to viatical settlement
5 purchasers.--
6 (1) No later than 5 days prior to the assignment,
7 transfer, sale, devise, or bequest of the death benefit or
8 ownership of all or a portion of the insurance policy or
9 certificate of insurance to the purchaser, the viatical
10 settlement provider and the viatical settlement sales agent,
11 themselves, itself or through another person, shall provide in
12 writing the following disclosures to any viatical settlement
13 purchaser:
14 (a) All the life expectancy certifications obtained by
15 the provider.
16 (b) The name and address of the insurance company, the
17 policy number, and the date of original issue of the
18 viaticated policy.
19 (c) The experience and qualifications of the person
20 issuing the life expectancy certification, and that person's
21 relationship to the viatical settlement provider, the viatical
22 settlement broker, the viatical settlement sales agent, and
23 the viator.
24 (d) The name and address of any person providing
25 escrow services, and that person's relationship to the
26 viatical settlement provider, the viatical settlement broker,
27 the viatical settlement sales agent, and the viator.
28 (e) The type of life insurance policy offered or sold,
29 including a statement as to whether the policy is whole life,
30 term life, universal life, or a group policy certificate; a
31 statement as to whether the policy is in lapse status or has
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HOUSE AMENDMENT
Bill No. HB 1507
Amendment No. 1 (for drafter's use only)
1 lapsed in the last 2 years; and a statement as to whether the
2 purchaser is entitled to benefits contained in the policy
3 other than the death benefit of the policy.
4 (f) The procedure to be used by the provider to
5 provide the status of the health condition of the insured to a
6 purchaser.
7 (2) The viatical settlement purchase agreement is
8 voidable by the purchaser at any time within 3 days after the
9 disclosures mandated by this section are received by the
10 purchaser.
11 (3) At the time the disclosures in subsection (1) are
12 made, the viatical settlement purchaser shall be advised to
13 seek independent financial advice from a person not
14 compensated by the viatical settlement provider or viatical
15 settlement broker or the viatical settlement sales agent. The
16 viatical settlement purchaser shall sign an affidavit that he
17 or she has received the disclosures and understands their
18 importance.
19 (4) A viatical settlement purchase transaction in the
20 secondary market, which involves purchases from any person
21 other than the provider who effectuated the viatical
22 settlement contract, may be completed only through the use of
23 an independent third-party trustee or escrow agent. All funds
24 to be paid by the purchaser must be deposited by the purchaser
25 with the independent third-party trustee or escrow agent. The
26 independent third-party trustee or escrow agent shall not
27 release the deposited funds to the seller until after the 3
28 day voidable period established by subsection (2) has expired.
29 (5) The requirements of subsections (1), (2), and (3)
30 of this section also apply to purchases made in the secondary
31 market, which involve purchases occurring from any person
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HOUSE AMENDMENT
Bill No. HB 1507
Amendment No. 1 (for drafter's use only)
1 other than the provider who effectuated the viatical
2 settlement contract.
3 Section 5. Subsection (10) is added to section
4 626.9924, Florida Statutes, to read: 626.9924 Viatical
5 settlement contracts; procedures; rescission.--
6 (10) The viatical settlement provider who effectuated
7 the viatical settlement contract with the viator (the "initial
8 provider") is responsible for tracking the insured, including
9 but not limited to, keeping track of the insured's whereabouts
10 and health status, submission of death claims or assisting the
11 beneficiary in the submission of death claims, and the status
12 of the payment of premiums until the death of the insured.
13 This responsibility may be contracted out to a third party,
14 however, the ultimate responsibility remains with the initial
15 provider. This responsibility continues with the initial
16 provider, notwithstanding any transfers of the viaticated
17 policy in the secondary market. This subsection only applies
18 to those viaticated policies that are, or are to become, the
19 subject of viatical settlement purchase agreements.
20 Section 6. Subsection (3) is added to section
21 626.9945, Florida Statutes, to read: 626.99245 Conflict of
22 regulation of viaticals.--
23 (3) This section does not affect the requirements of
24 ss. 626.9911(6) and 626.9912(1) that a viatical settlement
25 provider doing business from this state must obtain a viatical
26 settlement license from the department. "Doing business from
27 this state" includes effectuating viatical settlement
28 contracts and effectuating viatical settlement purchase
29 agreements from offices in this state, regardless of the state
30 of residence of the viator or the viatical settlement
31 purchaser.
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HOUSE AMENDMENT
Bill No. HB 1507
Amendment No. 1 (for drafter's use only)
1 Section 7. This act shall take effect July 1, 2001.
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4 ================ T I T L E A M E N D M E N T ===============
5 And the title is amended as follows:
6 On page 1,
7 remove from the title of the bill: The entire title
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9 and insert in lieu thereof:
10 A bill to be entitled
11 An act relating to viatical settlement
12 contracts; amending s. 626.9911, F.S.; revising
13 definitions; amending s. 626.9921, F.S.;
14 providing for approval of forms; amending s.
15 626.99235, F.S.; providing for applicability to
16 purchase in the secondary market; amending s.
17 626.99236, F.S.; requiring certain purchases to
18 be handled by an independent third party
19 trustee; amending s. 626.9924, F.S.; providing
20 additional responsibilities of viatical
21 settlement provider; amending s. 626.99245,
22 F.S.; clarifying application of licensing
23 requirements to viatical settlement providers;
24 providing an effective date.
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