Senate Bill sb0938er

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    2001 Legislature                  CS for SB 938, 1st Engrossed



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  2         An act relating to credit insurance; amending

  3         s. 626.321, F.S.; authorizing the issuance of

  4         credit life insurance licenses to lending or

  5         financial institutions or creditors and

  6         authorizing such licensees to sell credit

  7         insurance; deleting certain license

  8         requirements for institutions with multiple

  9         offices; amending s. 627.679, F.S.; requiring

10         certain disclosures to credit life insurance

11         purchasers regarding the cancellation of such

12         coverage; providing an effective date.

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

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

17  626.321, Florida Statutes, is amended to read:

18         626.321  Limited licenses.--

19         (1)  The department shall issue to a qualified

20  individual, or a qualified individual or entity under

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

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

23  categories:

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

25  covering only credit life or disability insurance. The license

26  may be issued only to an individual employed by a life or

27  health insurer as an officer or other salaried or commissioned

28  representative, or to an individual employed by or associated

29  with a lending or financial financing institution or creditor,

30  or to a lending or financial institution or creditor, and may

31  authorize the sale of such insurance only with respect to


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    2001 Legislature                  CS for SB 938, 1st Engrossed



  1  borrowers or debtors of such lending or financing institution

  2  or creditor.  However, only the individual or entity whose tax

  3  identification number is used in receiving or is credited with

  4  receiving the commission from the sale of such insurance shall

  5  be the licensed agent of the insurer.  No individual while so

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

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

  8  insurance coverage. An entity other than a lending or

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

10  holding a limited license under this paragraph is shall also

11  be authorized to sell credit insurance and credit property

12  insurance. An entity applying for a license under this

13  section:

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

15  license under s. 626.171. The requirements of subsection (5)

16  of s. 626.171, shall only apply to the officers and directors

17  of the entity submitting the application.

18         2.  Is required to obtain a license for each office,

19  branch office, or place of business making use of the entity's

20  business name by applying to the department for the license on

21  a simplified form developed by rule of the department for this

22  purpose.

23         3.  Is not required to pay any additional application

24  fees for a license issued to the offices or places of business

25  referenced in subsection (2), but is required to pay the

26  license fee as prescribed in s. 624.501, be appointed under s.

27  626.112, and pay the prescribed appointment fee under s.

28  624.501. The license obtained under this paragraph shall be

29  posted at the business location for which it was issued so as

30  to be readily visible to prospective purchasers of such

31  coverage.


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    2001 Legislature                  CS for SB 938, 1st Engrossed



  1         Section 2.  Subsection (1) of section 627.679, Florida

  2  Statutes, is amended to read:

  3         627.679  Amount of insurance; disclosure.--

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

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

  6  the total of the payments of the specific contracts of

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

  8  indebtedness is repayable in substantially equal installments

  9  or in one installment or a single payment.

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

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

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

13  $50,000 with any one creditor, except that loans not exceeding

14  1 year's duration shall not be subject to such limits, and on

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

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

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

18  creditor agent or agent shall obtain a separate written

19  acknowledgment with respect to each of the following:

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

21  the option of assigning any other policy or policies the

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

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

24  creditor agent in order to obtain the loan.

25         2.  That the borrower understands that the credit life

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

27  borrower is unable to engage in employment or unable to

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

29  the proposed credit life insurance policy contains this

30  restriction.

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    2001 Legislature                  CS for SB 938, 1st Engrossed



  1         3.  That the borrower understands that the benefits

  2  under the policy will terminate when the borrower reaches a

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

  4  represented on the application or policy.

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  6  In lieu of the required written acknowledgments set forth in

  7  this paragraph and s. 626.9551(2)(a), if the sale of credit

  8  life insurance is solicited or consummated telephonically, the

  9  creditor agent or agent shall provide written disclosures of

10  such options to the borrower within 30 days from the date the

11  coverage takes effect. The borrower must be notified that he

12  or she has 30 days from the date the disclosures are received

13  to rescind the credit life insurance coverage.

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

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