Senate Bill sb1786

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    Florida Senate - 2001                                  SB 1786

    By Senator Dawson





    30-1149A-01

  1                      A bill to be entitled

  2         An act relating to insurance; creating s.

  3         627.4553, F.S.; requiring life insurers having

  4         certain types of policies in force to annually

  5         notify policyholders of certain information

  6         concerning their policies; providing

  7         exceptions; amending s. 627.4555, F.S.;

  8         limiting an exception from specified notice

  9         requirements with respect to lapse of life

10         insurance coverage for nonpayment of premium;

11         creating s. 627.4587, F.S.; requiring benefit

12         enhancement of certain types of policies if the

13         premium payment reaches certain levels;

14         creating s. 627.5015, F.S.; prohibiting

15         delivery or issuance of industrial life

16         insurance policies after a specified date;

17         requiring notice to policyholders of existing

18         policies; providing an exception; providing an

19         effective date.

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

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23         Section 1.  Section 627.4553, Florida Statutes, is

24  created to read:

25         627.4553  Annual notice.--Each insurer that has in

26  force in this state a policy of life insurance with a death

27  benefit of $15,000 or less shall annually on the policy

28  anniversary date, by United States mail, disclose to the

29  policyholder or premium payor the total amount of premiums

30  paid, the cash value, and the amount of the death benefits

31  payable under such policy. If the insurer is unable to locate

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    Florida Senate - 2001                                  SB 1786
    30-1149A-01




  1  the policyholder, the policy shall be converted to full

  2  paid-up status. The disclosure notice is not required to be

  3  sent for any policies that are in full paid-up status or

  4  policies that are converted to full paid-up status.

  5         Section 2.  Section 627.4555, Florida Statutes, is

  6  amended to read:

  7         627.4555  Secondary notice.--Except as provided in this

  8  section, a contract for life insurance issued or issued for

  9  delivery in this state on or after October 1, 1997, covering a

10  natural person 64 years of age or older, which has been in

11  force for at least 1 year, may not be lapsed for nonpayment of

12  premium unless, after expiration of the grace period, and at

13  least 21 days before the effective date of any such lapse, the

14  insurer has mailed a notification of the impending lapse in

15  coverage to the policyowner and to a specified secondary

16  addressee if such addressee has been designated in writing by

17  name and address by the policyowner.  An insurer issuing a

18  life insurance contract on or after October 1, 1997, shall

19  notify the applicant of the right to designate a secondary

20  addressee at the time of application for the policy, on a form

21  provided by the insurer, and at any time the policy is in

22  force, by submitting a written notice to the insurer

23  containing the name and address of the secondary addressee.

24  For purposes of any life insurance policy that provides a

25  grace period of more than 51 days for nonpayment of premiums,

26  the notice of impending lapse in coverage required by this

27  section must be mailed to the policyowner and the secondary

28  addressee at least 21 days before the expiration of the grace

29  period provided in the policy. This section does not apply to

30  any life insurance contract issued before July 1, 2001, under

31  which premiums are payable monthly or more frequently and are

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    Florida Senate - 2001                                  SB 1786
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  1  regularly collected by a licensed agent or are paid by credit

  2  card or any preauthorized check processing or automatic debit

  3  service of a financial institution.

  4         Section 3.  Section 627.4587, Florida Statutes, is

  5  created to read:

  6         627.4587  Benefit enhancement.--For all policies issued

  7  after July 1, 2001, with a death benefit of less than $15,000,

  8  the following apply:

  9         (1)  When the cumulative premiums paid exceed 250

10  percent of the death benefit, the insurer shall enhance the

11  death benefit by $0.50 for each premium dollar paid in excess

12  of 250 percent of the death benefit.

13         (2)  When the cumulative premiums paid exceed 500

14  percent of the death benefit, the insurer shall enhance the

15  death benefit by $1.50 for each premium dollar paid in excess

16  of 500 percent of the death benefit.

17         Section 4.  Section 627.5015, Florida Statutes, is

18  created to read:

19         627.5015  Industrial life insurance prohibited;

20  disclosure.--

21         (1)  A policy of industrial life insurance may not be

22  delivered or issued in this state on or after July 1, 2001.

23         (2)  Each insurer that has in force in this state a

24  policy of industrial life shall annually on the policy

25  anniversary date, by United States mail, disclose to the

26  policyholder or premium payor the total amount of premiums

27  paid, the cash value, and the amount of the death benefits

28  payable under such policy. If the insurer is unable to locate

29  the policyholder, the policy shall be converted to full

30  paid-up status. The disclosure notice is not required to be

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    Florida Senate - 2001                                  SB 1786
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  1  sent for any policies that are in full paid-up status or

  2  policies that are converted to full paid-up status.

  3         Section 5.  This act shall take effect July 1, 2001.

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  6                          SENATE SUMMARY

  7    Requires life insurers that have policies in force which
      provide death benefits of less than $15,000 to annually
  8    mail to the policyholder a disclosure of the total
      premiums paid, the cash value, and the death benefits
  9    payable. Provides an exception for policies that are in
      full paid-up status. Provides that the secondary notice
10    requirements for lapse of a life insurance policy for
      nonpayment of premium does not apply to policies issued
11    on or after July 1, 2001. Requires benefit enhancement
      for policies issued after July 1, 2001, having a death
12    benefit of less than $15,000, when the premium payment
      reaches specified levels. Prohibits delivery or issuance
13    of industrial life insurance policies after July 1, 2001.
      Requires annual notice to policyholders of existing
14    policies. Provides an exception for policies that are in
      full paid-up status.
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