Senate Bill sb0938

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    Florida Senate - 2001                                   SB 938

    By Senator Peaden





    1-430A-01

  1                      A bill to be entitled

  2         An act relating to credit insurance; amending

  3         s. 621.321, F.S.; authorizing the issuance of

  4         credit life insurance licenses to lending or

  5         financial institutions and authorizing such

  6         licensees to sell credit insurance; deleting

  7         certain license requirements for institutions

  8         with multiple offices; requiring an annual

  9         filing regarding current office addresses and

10         other information; amending s. 626.9551, F.S.;

11         exempting sales of credit insurance and credit

12         property insurance from certain disclosure

13         requirements regarding the sale of insurance in

14         connection with the sale of services or

15         personal property; amending s. 627.679, F.S.;

16         requiring certain disclosures to credit life

17         insurance purchasers regarding the cancellation

18         of such coverage; providing an effective date.

19

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

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22         Section 1.  Paragraph (e) of subsection (1) of section

23  626.321, Florida Statutes, is amended to read:

24         626.321  Limited licenses.--

25         (1)  The department shall issue to a qualified

26  individual, or a qualified individual or entity under

27  paragraphs (c), (d), and (e), a license as agent authorized to

28  transact a limited class of business in any of the following

29  categories:

30         (e)  Credit life or disability insurance.--License

31  covering only credit life or disability insurance. The license

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    Florida Senate - 2001                                   SB 938
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  1  may be issued only to an individual employed by a life or

  2  health insurer as an officer or other salaried or commissioned

  3  representative, or to an individual employed by or associated

  4  with a lending or financing institution or creditor, or to a

  5  lending or financial institution, and may authorize the sale

  6  of such insurance only with respect to borrowers or debtors of

  7  such lending or financing institution or creditor.  However,

  8  only the individual or entity whose tax identification number

  9  is used in receiving or is credited with receiving the

10  commission from the sale of such insurance shall be the

11  licensed agent of the insurer.  No individual while so

12  licensed shall hold a license as an agent or solicitor as to

13  any other or additional kind or class of life or health

14  insurance coverage. An entity other than a lending or

15  financial institution defined in s. 655.005(1)(g), (h), or (p)

16  holding a limited license under this paragraph is shall also

17  be authorized to sell credit insurance and credit property

18  insurance. An entity applying for a license under this

19  section:

20         1.  Is required to submit only one application for a

21  license under s. 626.171, excluding the requirements of s.

22  626.171(5), if the entity is regulated by the Department of

23  Banking and Finance, the Office of the Comptroller of the

24  Currency, or the Office of Thrift Supervision of the

25  Securities and Exchange Commission.

26         2.  Is not required to obtain a license or appointment

27  for each office, branch office, or place of business using

28  making use of the entity's business name by applying to the

29  department for the license on a simplified form developed by

30  rule of the department for this purpose. However, it must file

31  with the department on or before January 1 of each year in an

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    Florida Senate - 2001                                   SB 938
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  1  electronic format as specified by departmental rule, the

  2  address and telephone number of each location where credit

  3  life insurance is sold. Any change regarding such location

  4  during the year must be reported to the department in the same

  5  format, within 30 days after the change occurs.

  6         3.  A copy of Is not required to pay any additional

  7  application fees for a license issued to the offices or places

  8  of business referenced in subsection (2), but is required to

  9  pay the license fee as prescribed in s. 624.501, be appointed

10  under s. 626.112, and pay the prescribed appointment fee under

11  s. 624.501. the license obtained under this paragraph must

12  shall be posted at each the business location where insurance

13  authorized by this section is sold, in a manner that is for

14  which it was issued so as to be readily visible to prospective

15  purchasers of such coverage.

16         Section 2.  Subsection (3) of section 626.9551, Florida

17  Statutes, is amended to read:

18         626.9551  Favored agent or insurer; coercion of

19  debtors.--

20         (3)  Paragraphs (2)(a), (b), (c), and (d) do not apply

21  to sales of insurance regulated under ss. 627.676-627.6845, s.

22  655.946, parts XV-XVI of chapter 627, or 12 U.S.C. ss.

23  4901-4910. Paragraph (2)(a) also does not apply to sales of

24  insurance, as defined in s. 624.605(1)(i) and (j).

25         Section 3.  Subsection (1) of section 627.679, Florida

26  Statutes, is amended to read:

27         627.679  Amount of insurance; disclosure.--

28         (1)(a)  The amount of credit life insurance written

29  under one or more policies shall not exceed by more than $5

30  the total of the payments of the specific contracts of

31  indebtedness in connection with which it is written, when the

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    Florida Senate - 2001                                   SB 938
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  1  indebtedness is repayable in substantially equal installments

  2  or in one installment or a single payment.

  3         (b)  The total amount of credit life insurance on the

  4  life of any debtor with respect to any loan or loans covered

  5  in one or more insurance policies shall at no time exceed

  6  $50,000 with any one creditor, except that loans not exceeding

  7  1 year's duration shall not be subject to such limits, and on

  8  such loans not exceeding 1 year's duration, the limits of

  9  coverage shall not exceed $50,000 with any one insurer.

10         (c)  Before any credit life insurance may be sold, the

11  creditor agent or agent shall provide obtain a separate

12  written disclosure acknowledgment with respect to each of the

13  following:

14         1.  That the borrower understands that he or she has

15  the option of assigning any other policy or policies the

16  borrower owns or may procure for the purpose of covering such

17  loan and that the policy need not be purchased from the

18  creditor agent in order to obtain the loan.

19         2.  That the borrower understands that the credit life

20  coverage may be deferred if, at the time of application, the

21  borrower is unable to engage in employment or unable to

22  perform normal activities of a person of like age and sex, if

23  the proposed credit life insurance policy contains this

24  restriction.

25         3.  That the borrower understands that the benefits

26  under the policy will terminate when the borrower reaches a

27  certain age and that the borrower's age is accurately

28  represented on the application or policy.

29         4.  That the borrower has 30 days after the date the

30  coverage takes effect to rescind the credit life insurance

31  coverage.

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    Florida Senate - 2001                                   SB 938
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  1

  2  Notwithstanding the required disclosures required by this

  3  paragraph, if the sale of credit life insurance is solicited

  4  or consummated telephonically, electronically, or by mail, the

  5  creditor or agent must, within 30 days after the date the

  6  coverage takes effect, be notified that he or she has 30 days

  7  after the date the disclosures have been received within which

  8  to rescind the credit life insurance coverage.

  9         Section 4.  This act shall take effect July 1, 2001.

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11            *****************************************

12                          SENATE SUMMARY

13    Revises provisions relating to credit insurance.
      Authorizes certain financial and lending institutions to
14    be issued licenses and to sell credit insurance. Deletes
      certain branch office license requirements and requires
15    an annual filing. Exempts the sale of certain credit and
      credit property insurance disclosure requirements
16    regarding the sale of insurance in connection with the
      sale of personal property and services. Requires certain
17    disclosures regarding cancellation rights to credit life
      insurance purchasers. (See bill for details.)
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