HB 0487 2003
1	A bill to be entitled
2	An act relating to viatical settlements; conforming
3	various provisions to certain governmental reorganization;
4	amending s. 517.021, F.S.; revising definitions; creating
5	s. 517.072, F.S.; providing for nonapplication of an
6	exemption to viatical settlement investments; amending s.
7	626.9911, F.S.; revising definitions; amending s.
8	626.9912, F.S.; providing additional requirements relating
9	to licensure; amending s. 626.9913, F.S.; revising
10	provisions relating to viatical settlement provider
11	license continuation; requiring annual statements to
12	include audited financial statements and other
13	information; prohibiting viatical settlement providers
14	from certain investing or lending activities; requiring
15	certain information relating to an annual statement to be
16	made available to the Office of Insurance Regulation;
17	deleting an alternative deposit requirement; prohibiting
18	certain levies by judgment creditors or other claimants;
19	amending s. 626.9914, F.S.; revising a criterion for
20	adverse licensure actions; revising terminology, to
21	conform to governmental reorganization; amending s.
22	626.9915, F.S., to conform to governmental reorganization;
23	amending s. 626.9916, F.S.; requiring a life agent license
24	to function as a viatical settlement broker; providing for
25	application of certain life insurance policy provisions to
26	viatical settlement contracts; authorizing transfer of
27	viatical settlement broker appointments to a life agent
28	license; terminating viatical settlement broker licenses
29	and prohibiting renewal; deleting provisions relating to
30	viatical settlement broker licensure; amending ss.
31	626.9917 and 626.9918, F.S., to conform to governmental
32	reorganization; clarifying application of adverse
33	licensure activities to life agents acting as viatical
34	settlement brokers; amending s. 626.9919, F.S., to
35	conform; amending s. 626.992, F.S.; deleting provisions
36	relating to viatical settlement sales agents, to conform;
37	amending s. 626.9921, F.S., to conform to governmental
38	reorganization; deleting provisions relating to viatical
39	settlement purchase agreement forms; amending s. 626.9922,
40	F.S., to conform to governmental reorganization; revising
41	office examination requirements; amending s. 626.9924,
42	F.S.; deleting certain insured status and information
43	tracking requirements; amending s. 626.99245, F.S.;
44	deleting conflict of regulation provisions relating to
45	out-of-state residents and application; amending s.
46	626.9925, F.S.; revising commission rulemaking
47	requirements; amending ss. 626.9926, 626.9927, and
48	626.99272, F.S., to conform; amending s. 626.99275, F.S.;
49	revising prohibited practices provisions, to conform;
50	revising penalty criteria; specifying nonapplication to
51	certain policy ownership transfers under court order;
52	amending s. 626.99277, F.S.; revising prohibited false
53	representation provisions, to conform; amending ss.
54	626.99278, 626.9928, and 626.99285, F.S., to conform;
55	amending s. 626.989, F.S.; clarifying a definition;
56	repealing s. 626.99235, F.S., relating to disclosures to
57	viatical settlement purchasers and misrepresentations;
58	repealing s. 626.99236, F.S., relating to further
59	disclosures to viatical settlement purchasers; repealing
60	s. 626.99295, F.S., relating to a licensure grace period
61	for unlicensed viatical settlement providers or viatical
62	settlement brokers; providing an effective date.
63
64	Be It Enacted by the Legislature of the State of Florida:
65
66	Section 1. Paragraph (w) is added to subsection (19) of
67	section 517.021, Florida Statutes, and subsection (21) is added
68	to said section, to read:
69	517.021 Definitions.--When used in this chapter, unless
70	the context otherwise indicates, the following terms have the
71	following respective meanings:
72	(19) "Security" includes any of the following:
73	(w) A viatical settlement investment.
74	(21) “Viatical settlement investment” means an agreement
75	for the purchase, sale, assignment, transfer, devise, or bequest
76	of any portion of an interest in a viaticated policy as defined
77	in chapter 626. This term includes, but is not limited to, a
78	beneficial or other interest in a trust, the corpus of which
79	includes viaticated policies, and an interest in any business
80	organization or association, however organized, the assets of
81	which include or are to include viaticated policies. The term
82	does not include:
83	(a) The transfer of an interest in a viaticated policy
84	from a natural person who transfers no more than one such
85	interest in 1 calendar year.
86	(b) The provision of stop-loss coverage to a viatical
87	settlement provider, financing entity, or related provider
88	trust, as those terms are defined in s. 626.9911, by an
89	authorized or eligible insurer.
90	(c) The transfer of a viaticated policy from a licensed
91	viatical settlement provider to a related provider trust or a
92	financing entity, as those terms are defined in s. 626.9911.
93	Section 2. Section 517.072, Florida Statutes, is created
94	to read:
95	517.072 Viatical settlement investments.--The exemption
96	provided for by s. 517.051 does not apply to a viatical
97	settlement investment as defined in s. 517.021. The offering of
98	a viatical settlement investment is not an exempt transaction
99	under s. 517.061, regardless of whether the offering otherwise
100	complies with the conditions of that section.
101	Section 3. Section 626.9911, Florida Statutes, is amended
102	to read:
103	626.9911 Definitions.--As used in this act, the term:
104	(1) “Fraudulent viatical settlement act” includes:
105	(a) Acts or omissions committed by any person who,
106	knowingly or with intent to defraud, for the purpose of
107	depriving another of property or for pecuniary gain, commits or
108	permits its employees or its agents to engage in acts including:
109	1. Presenting, causing to be presented, or preparing with
110	knowledge or belief that it will be presented to or by a
111	viatical settlement provider, viatical settlement broker,
112	special purpose entity, related provider trust, financing
113	entity, insurer, insurance producer, or any other person, false
114	material information, or concealing material information as part
115	of, in support of, or concerning a fact material to one or more
116	of the following:
117	a. An application for the issuance of a viatical
118	settlement contract or insurance policy;
119	b. The underwriting of a viatical settlement contract or
120	insurance policy;
121	c. A claim for payment or benefit pursuant to a viatical
122	settlement contract or insurance policy;
123	d. Premiums paid on an insurance policy;
124	e. Payments and changes in ownership or beneficiary made
125	in accordance with the terms of a viatical settlement contract
126	or insurance policy;
127	f. The reinstatement or conversion of an insurance policy;
128	g. The solicitation, offer, effectuation, or sale of a
129	viatical settlement contract or insurance policy;
130	h. The issuance of written evidence of a viatical
131	settlement contract or insurance; or
132	i. A financing transaction;
133	2. Employing any device, scheme, or artifice to defraud;
134	3. Obtaining money or property by means of an untrue
135	statement of a material fact or by any omission to state a
136	material fact necessary in order to clarify the statements made
137	in light of the circumstances under which they were made; or
138	4. Engaging in any transaction, practice, or course of
139	business which operates or would operate as a fraud or deceit
140	upon a person.
141	(b) In the furtherance of a fraud or the prevention of
142	detection of a fraud, the committing or permitting by any person
143	of the person’s employees or agents to:
144	1. Remove, conceal, alter, destroy, or sequester from the
145	office the assets or records of a licensee or other person
146	engaged in the business of viatical settlements;
147	2. Misrepresent or conceal the financial condition of a
148	licensee, financing entity, insurer, or other person;
149	3. Transact the business of viatical settlements in
150	violation of laws requiring a license, certificate of authority,
151	or other legal authority for the transaction of the business of
152	viatical settlements; or
153	4. File with the department, the office, or the chief
154	insurance regulatory official of another jurisdiction a document
155	containing false information or otherwise conceal information
156	about a material fact from the department or office;
157	(c) Embezzlement, theft, misappropriation, or conversion
158	of moneys, funds, premiums, credits, or other property of a
159	viatical settlement provider, insurer, insured, viator,
160	insurance policyowner, or any other person engaged in the
161	business of viatical settlements or insurance;
162	(d) Recklessly entering into, brokering, or otherwise
163	dealing in a viatical settlement contract, the subject of which
164	is a life insurance policy that was obtained by presenting false
165	information concerning any fact material to the policy or by
166	concealing, for the purpose of misleading another, information
167	concerning any fact material to the policy, where the viator or
168	the viator’s agent intended to defraud the policy’s issuer.
169	“Recklessly” means engaging in the conduct in conscious and
170	clearly unjustifiable disregard of a substantial likelihood of
171	the existence of the relevant facts or risks, such disregard
172	involving a gross deviation from acceptable standards of
173	conduct; or
174	(e) Attempting or conspiring to commit or assisting,
175	aiding, or abetting in the commission of the acts or omissions
176	specified in this subsection."Department" means the Department
177	of Insurance.
178	(2) "Independent third-party trustee or escrow agent"
179	means an attorney, certified public accountant, financial
180	institution, or other person providing escrow services under the
181	authority of a regulatory body. The term does not include any
182	person associated, affiliated, or under common control with a
183	viatical settlement provider or viatical settlement broker.
184	(3) "Person" has the meaning specified in s. 1.01.
185	(4) "Viatical settlement broker" means a naturalperson
186	who, in this state, from this state, or with a resident of this
187	stateon behalf of a viator and for a fee, commission, or other
188	valuable consideration, offers or attempts to negotiate viatical
189	settlement contracts between a viator resident in this stateand
190	one or more viatical settlement providers. Notwithstanding the
191	manner in which the viatical settlement broker is compensated, a
192	viatical settlement broker is deemed to represent only the
193	viator and owes a fiduciary duty to the viator to act according
194	to the viator's instructions and in the best interest of the
195	viator. The term does not include an employer of a licensed
196	viatical settlement provider when negotiating a viatical
197	settlement contract solely on behalf of such provider,an
198	attorney, licensed Certified Public Accountant, or investment
199	adviser lawfully registered with the Department of Banking and
200	Finance under chapter 517, who is retained to represent the
201	viator and whose compensation is paid directly by or at the
202	direction and on behalf of the viator.
203	(5) "Viatical settlement contract" means a written
204	agreement entered into between a viatical settlement provider,
205	or its related provider trust, and a viator. The viatical
206	settlement contract includes an agreement to transfer ownership
207	or change the beneficiary designation of a life insurance policy
208	at a later date, regardless of the date that compensation is
209	paid to the viator. The agreement must establish the terms under
210	which the viatical settlement provider will pay compensation or
211	anything of value, which compensation or value is less than the
212	expected death benefit of the insurance policy or certificate,
213	in return for the viator's assignment, transfer, sale, devise,
214	or bequest of the death benefit or ownership of all or a portion
215	of the insurance policy or certificate of insurance to the
216	viatical settlement provider. A viatical settlement contract
217	also includes a contract for a loan or other financial
218	transaction secured primarily by an individual or group life
219	insurance policy, other than a loan by a life insurance company
220	pursuant to the terms of the life insurance contract, or a loan
221	secured by the cash value of a policy.
222	(6) "Viatical settlement provider" means a person who, in
223	this state, from this state, or with a resident of this state,
224	effectuates a viatical settlement contract. The term does not
225	include:
226	(a) Any bank, savings bank, savings and loan association,
227	credit union, or other licensed lending institution that takes
228	an assignment of a life insurance policy as collateral for a
229	loan;
230	(b) A life and health insurer that has lawfully issued a
231	life insurance policy that provides accelerated benefits to
232	terminally ill policyholders or certificateholders; or
233	(c) Any natural person who enters into no more than one
234	viatical settlement contract with a viator in 1 calendar year,
235	unless such natural person has previously been licensed under
236	this act or is currently licensed under this act.
237	(d) A trust that meets the definition of a "related
238	provider trust."
239	(e) A viator in this state.
240	(f) A viatical settlement purchaser.
241	(f)(g)A financing entity.
242	(7) "Viator" means the owner of a life insurance policy or
243	a certificateholder under a group policy who enters or seeks to
244	enter into a viatical settlement contract. This term does not
245	include a viatical settlement purchaser ora viatical settlement
246	provider or any person acquiring a policy or interest in a
247	policy from a viatical settlement provider, nor does it include
248	an independent third-party trustee or escrow agent.
249	(8) "Related provider trust" means a titling trust or
250	other trust established by a licensed viatical settlement
251	provider or financing entity for the sole purpose of holding the
252	ownership or beneficial interest in purchased policies in
253	connection with a financing transaction. The trust must have a
254	written agreement with a licensed viatical settlement provider
255	or financing entity under which the licensed viatical settlement
256	provider or financing entity is responsible for insuring
257	compliance with all statutory and regulatory requirements and
258	under which the trust agrees to make all records and files
259	relating to viatical settlement transactions available to the
260	officedepartmentas if those records and files were maintained
261	directly by the licensed viatical settlement provider. This term
262	does not include an independent third-party trustee or escrow
263	agent or a trust that does not enter into agreements with a
264	viator. A related provider trust shall be subject to all
265	provisions of this act that apply to the viatical settlement
266	provider who established the related provider trust, except s.
267	626.9912, which shall not be applicable. A viatical settlement
268	provider may establish no more than one related provider trust,
269	and the sole trustee of such related provider trust shall be the
270	viatical settlement provider licensed under s. 626.9912. The
271	name of the licensed viatical settlement provider shall be
272	included within the name of the related provider trust.
273	(9) "Business of viatical settlements” means an activity
274	involved in, but not limited to, the offering, solicitation of
275	and for, negotiation, procurement, effectuation, purchasing,
276	investing, financing, monitoring, tracking, underwriting,
277	selling, transferring, assigning, pledging, hypothecating, or
278	any other manner of dealing in viaticated policies."Viatical
279	settlement purchase agreement" means a contract or agreement,
280	entered into by a viatical settlement purchaser, to which the
281	viator is not a party, to purchase a life insurance policy or an
282	interest in a life insurance policy, which is entered into for
283	the purpose of deriving an economic benefit. The term also
284	includes purchases made by viatical settlement purchasers from
285	any person other than the provider who effectuated the viatical
286	settlement contract.
287	(10) “Control,” including the terms “controlling,”
288	“controlled by,” and “under common control with,” means the
289	possession, directly or indirectly, of the power to direct or
290	cause the direction of the management or policies of a person,
291	whether through the ownership of voting securities, by contract,
292	or otherwise."Viatical settlement purchaser" means a person who
293	gives a sum of money as consideration for a life insurance
294	policy or an equitable or legal interest in the death benefits
295	of a life insurance policy that has been or will be the subject
296	of a viatical settlement contract, for the purpose of deriving
297	an economic benefit, including purchases made from any person
298	other than the provider who effectuated the viatical settlement
299	contract or an entity affiliated with the provider. The term
300	does not include a licensee under this part, an accredited
301	investor as defined in Rule 501, Regulation D of the Securities
302	Act Rules, or a qualified institutional buyer as defined by Rule
303	144(a) of the Federal Securities Act, a special purpose entity,
304	a financing entity, or a contingency insurer. The above
305	references to Rule 501, Regulation D and Rule 144(a) of the
306	Federal Securities Act are used strictly for defining purposes
307	and shall not be interpreted in any other manner. Any person who
308	claims to be an accredited investor shall sign an affidavit
309	stating that he or she is an accredited investor, the basis of
310	that claim, and that he or she understands that as an accredited
311	investor he or she will not be entitled to certain protections
312	of the Viatical Settlement Act. This affidavit must be kept with
313	other documents required to be maintained by this act.
314	(11) "Viatical settlement sales agent" means a person
315	other than a licensed viatical settlement provider who arranges
316	the purchase through a viatical settlement purchase agreement of
317	a life insurance policy or an interest in a life insurance
318	policy.
319	(11)(12)"Viaticated policy" means a life insurance
320	policy, or a certificate under a group policy, which is the
321	subject of a viatical settlement contract.
322	(12)(13)"Related form" means any form, created by or on
323	behalf of a licensee, which a viator or viatical settlement
324	purchaseris required to sign or initial. The forms include, but
325	are not limited to, a power of attorney, a release of medical
326	information form, a suitability questionnaire, a disclosure
327	document, or any addendum, schedule, or amendment to a viatical
328	settlement contract or viatical settlement purchase agreement
329	considered necessary by a provider to effectuate a viatical
330	settlement transaction.
331	(13)(14)"Special purpose entity" means an entity
332	established by a licensed viatical settlement provider or by a
333	financing entity, which may be a corporation, partnership,
334	trust, limited liability company, or other similar entity formed
335	solely to provide, either directly or indirectly, access to
336	institutional capital markets to a viatical settlement provider
337	or financing entity. A special purpose entity shall not enter
338	into a viatical settlement contract or a viatical settlement
339	purchase agreement.
340	(14)(15)"Financing entity" means an underwriter,
341	placement agent, lender, purchaser of securities, or purchaser
342	of a policy or certificate from a viatical settlement provider,
343	credit enhancer, or any entity that has direct ownership in a
344	policy or certificate that is the subject of a viatical
345	settlement contract, but whose principal activity related to the
346	transaction is providing funds or credit enhancement to effect
347	the viatical settlement or the purchase of one or more viatical
348	policies and who has an agreement in writing with one or more
349	licensed viatical settlement providers to finance the
350	acquisition of viatical settlement contracts. The term does not
351	include a nonaccredited investor, a viatical settlement
352	purchaser, or other natural person.A financing entity may not
353	enter into a viatical settlement contract.
354	Section 4. Section 626.9912, Florida Statutes, is amended
355	to read:
356	626.9912 Viatical settlement provider license required;
357	application for license.--
358	(1) A person may not perform the functions of a viatical
359	settlement provider as defined in this act or enter into or
360	solicit a viatical settlement contract without first having
361	obtained a license from the officedepartment.
362	(2) Application for a viatical settlement provider license
363	must be made to the officedepartmentby the applicant on a form
364	prescribed by the officedepartment, under oath and signed by
365	the applicant. The application must be accompanied by a fee of
366	$500. If the applicant is a corporation, the application must be
367	under oath and signed by the president and the secretary of the
368	corporation.
369	(3) In the application, the applicant must provide all of
370	the following:
371	(a) The applicant's full name, age, residence address, and
372	business address, and all occupations engaged in by the
373	applicant during the 105years preceding the date of the
374	application.
375	(b) A copy of the applicant's basic organizational
376	documents, if any, including the articles of incorporation,
377	articles of association, partnership agreement, trust agreement,
378	or other similar documents, together with all amendments to such
379	documents.
380	(c) Copies of all bylaws, rules, regulations, or similar
381	documents regulating the conduct of the applicant's internal
382	affairs.
383	(d) A list showing the name, business and residence
384	addresses, and official position of each individual who is
385	responsible for conduct of the applicant's affairs, including,
386	but not limited to, any member of the applicant's board of
387	directors, board of trustees, executive committee, or other
388	governing board or committee and any other person or entity
389	owning or having the right to acquire 10 percent or more of the
390	voting securities of the applicant.
391	(e) With respect to each individual identified under
392	paragraph (d):
393	1. A sworn biographical statement on forms supplied by the
394	commissiondepartment.
395	2. A set of fingerprints on forms prescribed by the
396	commissiondepartment, certified by a law enforcement officer,
397	and accompanied by the fingerprinting fee specified in s.
398	624.501.
399	3. Authority for release of information relating to the
400	investigation of the individual's background.
401	(f) All applications, viatical settlement contract forms,
402	viatical settlement purchase agreement forms, escrow forms, and
403	other agreements related to the business of viatical
404	settlements, and allrelated forms proposed to be used by the
405	applicant.
406	(g) Such other information as the commission or office
407	departmentdeems necessary to determine that the applicant and
408	the individuals identified under paragraph (d) are competent and
409	trustworthy and can lawfully and successfully act as a viatical
410	settlement provider.
411	(4) The officedepartmentmay not issue a license to an
412	entity other than a natural person if it is not satisfied that
413	all officers, directors, employees, stockholders, partners, and
414	any other persons who exercise or have the ability to exercise
415	effective control of the entity or who have the ability to
416	influence the transaction of business by the entity meet the
417	standards of this act and have not violated any provision of
418	this act or rules of the officedepartmentrelated to the
419	business of viatical settlementssettlement contracts or
420	viatical settlement purchase agreements.
421	(5) Upon the filing of a sworn application and the payment
422	of the license fee, the officedepartmentshall investigate each
423	applicant and may issue the applicant a license if the office
424	departmentfinds that the applicant:
425	(a) Has provided a detailed plan of operation regarding
426	its business of viatical settlements and the procurement and
427	disposition of viaticated policies, including copies of any
428	offering of securities.
429	(b) Is competent and trustworthy and intends to act in
430	good faith in the business authorized by the license applied
431	for.
432	(c) Has a good business reputation and has had experience,
433	training, or education that qualifies the applicant to conduct
434	the business authorized by the license applied for.
435	(d) If the applicant is a corporation, is a corporation
436	incorporated under the laws of this state, or is a foreign
437	corporation authorized to transact business in this state.
438	(e) Has designated the Chief Financial OfficerInsurance
439	Commissioner and Treasureras its agent for service of process.
440	(f) Has made the deposit required by s. 626.9913(5)(3).
441	(g) Has filed an anti-fraud plan that meets the
442	requirements of s. 626.99278.
443	Section 5. Section 626.9913, Florida Statutes, is amended
444	to read:
445	626.9913 Viatical settlement provider license continuance;
446	annual report; fees; deposit.--
447	(1) A viatical settlement provider license continues in
448	force until suspended or revoked.
449	(2) Annually, on or before March 1, the viatical
450	settlement provider licensee shall file a statement containing
451	information the office or commissiondepartmentrequires and
452	shall pay to the officedepartmenta license fee in the amount
453	of $500. The annual statement shall include audited financial
454	statements prepared in accordance with generally accepted
455	accounting principles by an independent certified public
456	accountant as of the last day of the preceding calendar year and
457	such other reasonable data, financial statements, and pertinent
458	information, including, but not limited to, a schedule showing
459	the names and locations of all persons with which the viatical
460	settlement provider has engaged in the business of viatical
461	settlements during the reporting period as the department may by
462	rule require with respect to the provider, its subsidiaries, or
463	affiliates.A viatical settlement provider shall include in all
464	statements filed with the officedepartmentall information
465	requested by the office or commissiondepartmentregarding a
466	related provider trust established by the viatical settlement
467	provider. The office or commissiondepartmentmay require more
468	frequent reporting. Failure to timely file the annual statement
469	or to timely pay the license fee is grounds for immediate
470	suspension of the license.
471	(3) A viatical settlement provider shall not directly or
472	indirectly invest in or lend its funds upon the security of any
473	note or other evidence of indebtedness of any director, officer,
474	or controlling stockholder of the provider.
475	(4) The work papers, account analyses, description of
476	basic assumptions, and other information necessary for a full
477	understanding of the annual statement shall be made available to
478	the office upon request.
479	(5)(3)A viatical settlement provider licensee must
480	deposit and maintain deposited in trust with the department
481	securities eligible for deposit under s. 625.52, having at all
482	times a value of not less than $100,000. As an alternative to
483	meeting the $100,000 deposit requirement, the provider may
484	deposit and maintain deposited in trust with the department such
485	securities in the amount of $25,000 and post with the department
486	a surety bond acceptable to the department in the amount of
487	$75,000.
488	(6) No judgment creditor or other claimant of a viatical
489	settlement provider shall have the right to levy upon any of the
490	assets or securities held in this state pursuant to this
491	section.(7)(4)There shall be no additional annual license
492	fee or deposit requirements under this act for a related
493	provider trust established by a viatical settlement provider.
494	Section 6. Section 626.9914, Florida Statutes, is amended
495	to read:
496	626.9914 Suspension, revocation, or nonrenewal of viatical
497	settlement provider license; grounds; administrative fine.--
498	(1) The officedepartment shall suspend, revoke, deny,or
499	refuse to renew the license of any viatical settlement provider
500	if the officedepartmentfinds that the licensee:
501	(a) Has made a misrepresentation in the application for
502	the license;
503	(b) Has engaged in fraudulent or dishonest practices, or
504	otherwise has been shown to be untrustworthy or incompetent to
505	act as a viatical settlement provider;
506	(c) Demonstrates a pattern of unreasonable payments to
507	viators;
508	(d) Has been found guilty of, or has pleaded guilty or
509	nolo contendere to, any felony, or a misdemeanor involving fraud
510	or moral turpitude, regardless of whether a judgment of
511	conviction has been entered by the court;
512	(e) Has issued viatical settlement contracts that have not
513	been approved pursuant to this act;
514	(f) Has failed to honor contractual obligations related to
515	the business of viatical settlementssettlement contracts;
516	(g) Deals in bad faith with viators;
517	(h) Has violated any provision of the insurance code of
518	any state, any federal or state securities laws, or similar laws
519	or rules of any regulatory or self-regulatory bodyor of this
520	act;
521	(i) Employs or contracts withany person who materially
522	influences the licensee's conduct and who fails to meet the
523	requirements of this act; or
524	(j) No longer meets the requirements for initial
525	licensure.
526	(2) The officedepartmentmay, in lieu of or in addition
527	to any suspension or revocation, assess an administrative fine
528	not to exceed $2,500 for each nonwillful violation or $10,000
529	for each willful violation by a viatical settlement provider
530	licensee. The officedepartmentmay also place a viatical
531	settlement provider licensee on probation for a period not to
532	exceed 2 years.
533	(3) If an employee of a viatical settlement provider
534	violates any provision of this act, the officedepartmentmay
535	take disciplinary action against such employee as if the
536	employee were licensed under this act, including suspending or
537	otherwise prohibiting the employee from performing the functions
538	of a viatical settlement provider or viatical settlement broker
539	as defined in this act.
540	(4) If a viatical settlement provider establishes a
541	related provider trust as permitted by this act, the viatical
542	settlement provider shall be liable and responsible for the
543	performance of all obligations of the related provider trust
544	under all viatical settlement contracts entered into by the
545	related provider trust, and for the compliance of the related
546	provider trust with all provisions of this act. Any violation of
547	this act by the related provider trust shall be deemed a
548	violation of this act by the viatical settlement provider as
549	well as the related provider trust. If the related provider
550	trust violates any provisions of this act, the officedepartment
551	may exercise all remedies set forth in this act for such
552	violations against the viatical settlement provider, as well as
553	the related provider trust.
554	Section 7. Section 626.9915, Florida Statutes, is amended
555	to read:
556	626.9915 Effect of suspension or revocation of viatical
557	settlement provider license; duration of suspension;
558	reinstatement.--
559	(1) When its license is suspended or revoked, the provider
560	must proceed, immediately following the effective date of the
561	suspension or revocation, to conclude the affairs it is
562	transacting under its license. The provider may not solicit,
563	negotiate, advertise, or effectuate new contracts. The office
564	departmentretains jurisdiction over the provider until all
565	contracts have been fulfilled or canceled or have expired. A
566	provider whose license is suspended or revoked may continue to
567	maintain and service viaticated policies subject to the approval
568	of the officedepartment.
569	(2) The suspension of the license of a viatical settlement
570	provider licensee may be for such period, not to exceed 2 years,
571	as determined by the officedepartment. The officedepartment
572	may shorten, rescind, or modify the suspension.
573	(3) During the period of suspension, the licensee shall
574	file its annual statement and pay license fees as if the license
575	had continued in full force.
576	(4) If, upon expiration of the suspension order, the
577	license has not otherwise been terminated, the officedepartment
578	must reinstate the license only upon written request by the
579	suspended licensee unless the officedepartmentfinds that the
580	grounds giving rise to the suspension have not been removed or
581	that the licensee is otherwise not in compliance with the
582	requirements of this act. The officedepartmentshall give the
583	licensee notice of its findings no later than 90 days after
584	receipt of the request or upon expiration of the suspension
585	order, whichever occurs later. If a license is not reinstated
586	pursuant to the procedures set forth in this subsection, it
587	expires at the end of the suspension or on the date it otherwise
588	would have expired, whichever is sooner.
589	Section 8. Section 626.9916, Florida Statutes, is amended
590	to read:
591	626.9916 Viatical settlement broker license required;
592	application for license.--
593	(1) After October 1, 2003July 1, 1996, a person, other
594	than a life agent licensed under this chapter,may not perform
595	the functions of a viatical settlement broker as defined in this
596	act without first having obtained a life agentlicense from the
597	department.
598	(2) Except as otherwise provided in this section, parts I
599	and III of this chapter apply as if a viatical settlement
600	contract were an insurance policy. In order to perform the
601	functions of a viatical settlement broker, the licensed life
602	agent must appoint himself or herself with the office as such.
603	Application for a viatical settlement broker license must be
604	made to the department by the applicant on a form prescribed by
605	the department, under oath, and signed by the applicant. The
606	application must be accompanied by a $50 filing fee. If the
607	applicant is a corporation, the application must be under oath
608	and signed by the president and the secretary of the
609	corporation.
610	(3) Each natural person who on July 1, 2003, held a
611	viatical settlement broker’s license and appointment may, upon
612	obtaining a life agent license on or before October 1, 2003,
613	transfer an existing broker appointment to such license.In the
614	application, the applicant must provide all of the following:
615	(a) The applicant's full name, age, residence address, and
616	business address, and all occupations engaged in by the
617	applicant during the 5 years preceding the date of the
618	application; if the applicant is not a natural person, the
619	applicant must provide the information required by this
620	paragraph with respect to all officers, directors, or partners.
621	(b) A copy of the applicant's basic organizational
622	documents, if any, including the articles of incorporation,
623	articles of association, partnership agreement, trust agreement,
624	or other similar documents, together with all amendments to such
625	documents.
626	(c) If the applicant is not a natural person, a list
627	showing the name, business and residence addresses, and official
628	position of each individual who is responsible for conduct of
629	the applicant's affairs, including, but not limited to, any
630	member of the applicant's board of directors, board of trustees,
631	executive committee, or other governing board or committee and
632	any other person or entity owning or having the right to acquire
633	10 percent or more of the voting securities of the applicant.
634	(d) With respect to an individual applicant and with
635	respect to each individual identified under paragraph (c):
636	1. A sworn biographical statement on forms supplied by the
637	department.
638	2. A set of fingerprints on forms prescribed by the
639	department, certified by a law enforcement officer, and
640	accompanied by the fingerprinting fee specified in s. 624.501.
641	3. Authority, if required by the department, for release
642	of information relating to the investigation of the individual's
643	background.
644	(e) Such other information as the department deems
645	necessary to determine that the individual applicant and the
646	individuals identified under paragraph (c) are competent and
647	trustworthy and can lawfully and successfully act as a viatical
648	settlement provider.
649	(4) All viatical settlement broker licenses shall
650	terminate on October 1, 2003, and shall not be subject to
651	renewal.Any natural person who is employed by or otherwise
652	represents a viatical settlement broker licensee, which broker
653	licensee is not a natural person, must also be licensed as a
654	viatical settlement broker if such employee or other
655	representative performs the functions of a viatical settlement
656	broker as defined in this act.
657	(5) The department may not issue a license to an applicant
658	if it is not satisfied that the applicant, if a natural person,
659	or all officers, directors, employees, stockholders, and
660	partners who exercise or have the ability to exercise effective
661	control of the applicant or who have the ability to influence
662	the transaction of business by the applicant, if the applicant
663	is not a natural person, meet the standards of this act and have
664	not violated any provision of this act or rules of the
665	department related to the business of viatical settlement
666	contracts.
667	(6) The department may specify the form of the license and
668	may require photographing of the applicant as part of the
669	application process.
670	(7) Upon the filing of a sworn application and the payment
671	of the license fee and all other applicable fees under this act,
672	the department shall investigate each applicant and may issue
673	the applicant a license if the department finds that the
674	applicant:
675	(a) Is competent and trustworthy and intends to act in
676	good faith in the business authorized by the license applied
677	for.
678	(b) Has a good business reputation and has had experience,
679	training, or education that qualifies the applicant to conduct
680	the business authorized by the license applied for.
681	(c) Except with respect to applicants for nonresident
682	licenses, is a bona fide resident of this state and actually
683	resides in this state at least 180 days a year. If an applicant
684	holds a similar license or an insurance agent's or broker's
685	license in another state at the time of applying for a license
686	under this section, the applicant may be found to meet the
687	residency requirement of this paragraph only after he or she
688	furnishes a letter of clearance satisfactory to the department
689	or other proof that the applicant's resident licenses have been
690	canceled or changed to nonresident status and that the applicant
691	is in good standing with the licensing authority.
692	(d) Is a corporation, a corporation incorporated under the
693	laws of this state, or a foreign corporation authorized to
694	transact business in this state.
695	(e) Has designated the Insurance Commissioner and
696	Treasurer as its agent for service of process.
697	(8) An applicant for a nonresident viatical settlement
698	broker license must, in addition to designating the Insurance
699	Commissioner and Treasurer as agent for service of process as
700	required by this section, also furnish the department with the
701	name and address of a resident of this state upon whom notices
702	or orders of the department or process affecting the applicant
703	or licensee may be served. After issuance of the license, the
704	licensee must also notify the department of change of the person
705	to receive such notices, orders, or process; such change is not
706	effective until acknowledged by the department.
707	(9) Beginning July 1, 1997, the department may, by rule,
708	specify experience, educational, or other training standards
709	required for licensure under this section.
710	(10) Except as otherwise provided in this section,
711	viatical settlement brokers shall be licensed, appointed,
712	renewed, continued, reinstated, and terminated in the manner
713	specified in this chapter for insurance representatives
714	generally; however, viatical settlement brokers are not subject
715	to continuing education requirements.
716	Section 9. Section 626.9917, Florida Statutes, is amended
717	to read:
718	626.9917 Denial,Suspension, revocation, or nonrenewal of
719	viatical settlement broker’s life agentbrokerlicense; grounds;
720	administrative fine.--
721	(1) The officedepartment shall deny an application for,
722	suspend, revoke, or refuse to renew the license of any life
723	agent acting as a viatical settlement broker if the office
724	departmentfinds that the licensee:
725	(a) Has made a misrepresentation in the application for
726	the license or application form;
727	(b) Has engaged in fraudulent or dishonest practices, or
728	otherwise has been shown to be untrustworthy or incompetent to
729	act as a viatical settlement broker;
730	(c) Has been found guilty of, or has pleaded guilty or
731	nolo contendere to, any felony, or a misdemeanor involving fraud
732	or moral turpitude, regardless of whether a judgment of
733	conviction has been entered by the court;
734	(d) Deals in bad faith with viators or providers;
735	(e) Has violated any provision of the insurance code or of
736	this act;
737	(f) Employs or contracts withany person who materially
738	influences the licensee's conduct and who fails to meet the
739	requirements of this act;
740	(g) No longer meets the requirements for initial
741	licensure; or
742	(h) Has received a fee, commission, or other valuable
743	consideration for his or her services involving unlicensed
744	providers or life agentswith respect to viatical settlements.
745	(2) The officedepartmentmay, in lieu of or in addition
746	to any suspension or revocation, assess an administrative fine
747	not to exceed $2,500 for each nonwillful violation or $10,000
748	for each willful violation by a viatical settlement broker
749	licensee. The officedepartmentmay also place a viatical
750	settlement broker licensee on probation for a period not to
751	exceed 2 years.
752	Section 10. Section 626.9918, Florida Statutes, is amended
753	to read:
754	626.9918 Effect of suspension or revocation of viatical
755	settlement broker’s life agentbrokerlicense; duration of
756	suspension; reinstatement.--
757	(1) When theits license of a viatical settlement broker
758	is suspended or revoked, the broker must proceed, immediately
759	following the effective date of the suspension or revocation, to
760	conclude the affairs the brokerit is transacting under theits
761	license. The broker may not perform any of the functions of a
762	viatical settlement broker as defined in this act. The
763	department retains jurisdiction over the brokerprovideruntil
764	all contracts have been fulfilled or canceled or have expired.
765	(2) The suspension of the life agentlicense of a viatical
766	settlement broker licenseemay be for such period, not to exceed
767	2 years, as determined by the department. The department may
768	shorten, rescind, or modify the suspension.
769	(3) During the period of suspension, the licensee shall
770	pay license fees, as required by the department, as if the
771	license had continued in full force.
772	(4) If, upon expiration of the suspension order, the
773	license has not otherwise been terminated, the department must
774	reinstate the license only upon written request by the suspended
775	licensee unless the department finds that the grounds giving
776	rise to the suspension have not been removed or that the
777	licensee is otherwise not in compliance with the requirements of
778	this act. The department shall give the licensee notice of its
779	findings no later than 90 days after receipt of the request or
780	upon expiration of the suspension order, whichever occurs later.
781	If a license is not reinstated pursuant to the procedures set
782	forth in this subsection, it expires at the end of the
783	suspension or on the date it otherwise would have expired,
784	whichever is sooner.
785	Section 11. Section 626.9919, Florida Statutes, is amended
786	to read:
787	626.9919 Notice of change of licensee address or
788	name.--Each viatical settlement provider licensee, viatical
789	settlement broker licensee, and viatical settlement sales agent
790	licensee must provide the officedepartmentat least 30 days'
791	advance notice of any change in the licensee's name, residence
792	address, principal business address, or mailing address.
793	Section 12. Section 626.992, Florida Statutes, is amended
794	to read:
795	626.992 Use of licensed viatical settlement licensed
796	brokers and, providers, and sales agentsrequired.--
797	(1) A licensed viatical settlement provider may not use
798	any person to perform the functions of a viatical settlement
799	broker as defined in this act unless such person holds a
800	current, valid license as a life agentviatical settlement
801	broker. Salaried individuals employed by viatical settlement
802	providers may notshallengage in viatical settlement broker
803	activities unless he or sheonly when accompanied by a viatical
804	settlement broker who holds a current valid life agent license
805	issued under this act. A viatical settlement provider may not
806	use any person to perform the functions of a viatical settlement
807	sales agent unless the person holds a current, valid license as
808	provided in subsection (4).
809	(2) A licensedviatical settlement broker may not use any
810	person to perform the functions of a viatical settlement
811	provider as defined in this act unless such person holds a
812	current, valid license as a viatical settlement provider.
813	(3) A viatical settlement sales agent may not use any
814	person to perform the functions of a viatical settlement broker
815	unless such person holds a current, valid license as a viatical
816	settlement broker.
817	(4) A person may not perform the functions of a viatical
818	settlement sales agent unless licensed as a life agent as
819	defined in s. 626.015 and as provided in this chapter.
820	Section 13. Section 626.9921, Florida Statutes, is amended
821	to read:
822	626.9921 Filing of forms; required procedures; approval.--
823	(1) A viatical settlement contract form, viatical
824	settlement purchase agreement form,escrow form, or related form
825	may be used in this state only after the form has been filed
826	with the officedepartmentand only after the form has been
827	approved by the officedepartment.
828	(2) The viatical settlement contract form, viatical
829	settlement purchase agreement form,escrow form, or related form
830	must be filed with the officedepartmentat least 60 days before
831	its use. The form is considered approved on the 60th day after
832	its date of filing unless it has been previously disapproved by
833	the officedepartment. The officedepartmentmust disapprove a
834	viatical settlement contract form, viatical settlement purchase
835	agreement form,escrow form, or related form that is
836	unreasonable, contrary to the public interest, discriminatory,
837	or misleading or unfair to the viator or violates any provision
838	of this part or if the application of the submitting party for
839	licensure as a provider or a related provider trust has not been
840	approved by the officethe purchaser.
841	(3) If a viatical settlement provider elects to use a
842	related provider trust in accordance with this act, the viatical
843	settlement provider shall file notice of its intention to use a
844	related provider trust with the officedepartment, including a
845	copy of the trust agreement of the related provider trust. The
846	organizational documents of the trust must be submitted to and
847	approved by the officedepartmentbefore the transacting of
848	business by the trust.
849	(4) The commissiondepartmentmay adopt, by rule,
850	standardized forms to be used by licensees, at the licensee's
851	option in place of separately approved forms.
852	Section 14. Section 626.9922, Florida Statutes, is amended
853	to read:
854	626.9922 Examination.--
855	(1) The officedepartmentmay examine the business and
856	affairs of any licensee or applicant for a license. The office
857	departmentmay order any licensee or applicant to produce any
858	records, books, files, financial records,advertising and
859	solicitation materials, or other information relating to the
860	business of viatical settlements regardless of jurisdiction or
861	locationand may take statements under oath to determine whether
862	the licensee or applicant is in violation of the law or is
863	acting contrary to the public interest. The expenses incurred in
864	conducting any examination or investigation must be paid by the
865	licensee or applicant. Examinations and investigations must be
866	conducted as provided in chapter 624, and licensees are subject
867	to all applicable provisions of the insurance code.
868	(2) All accounts, books and records, documents, files,
869	contracts, and other information relating to the business of
870	viatical settlements andall transactions of viatical settlement
871	contracts regardless of location or jurisdictionor viatical
872	settlement purchase agreementsmust be maintained by the
873	licensee for a period of at least 3 years after the death of the
874	insured and must be available to the officedepartmentfor
875	inspection during reasonable business hours.
876	(3) All such records or accurate copies of such records
877	must be maintained at the licensee's home office. As used in
878	this section, the term "home office" means the principal place
879	of business and any other single storage facility, the street
880	address of which shall be disclosed to the officedepartment
881	within 20 days after its initial use, or within 320 days after
882	ofthe effective date of this subsection.
883	(4) The originals of records required to be maintained
884	under this section must be made available to the office
885	department for examination at the office’sdepartment'srequest.
886	Section 15. Section 626.9924, Florida Statutes, is amended
887	to read:
888	626.9924 Viatical settlement contracts; procedures;
889	rescission.--
890	(1) A viatical settlement provider entering into a
891	viatical settlement contract with any viator must first obtain a
892	witnessed document in which the viator consents to the viatical
893	settlement contract, represents that he or she has a full and
894	complete understanding of the viatical settlement contract and
895	the benefits of the life insurance policy, releases his or her
896	medical records, and acknowledges that he or she has entered
897	into the viatical settlement contract freely and voluntarily.
898	(2) All viatical settlement contracts subject to this act
899	must contain an unconditional rescission provision which allows
900	the viator to rescind the contract within 15 days after the
901	viator receives the viatical settlement proceeds, conditioned on
902	the return of such proceeds.
903	(3) A viatical settlement transaction may be completed
904	only through the use of an independent third-party trustee or
905	escrow agent. Immediately upon receipt by the independent third-
906	party trustee or escrow agent of documents from the viator to
907	effect the transfer of the insurance policy, the viatical
908	settlement provider must pay the proceeds of the settlement to
909	an escrow or trust account managed by the independent third-
910	party trustee or escrow agent in a financial institution
911	licensed under Florida law or a federally chartered financial
912	institution that is a member of the Federal Reserve System,
913	pending acknowledgment of the transfer by the issuer of the
914	policy. An advance or partial payment of the proceeds due under
915	a viatical settlement contract may not be used to effect
916	transfer of the subject policy; any such advance or partial
917	payment is made at the sole discretion and risk of the viatical
918	settlement provider.
919	(4) Upon receipt of all viatical settlement contract
920	proceeds, the independent third-party trustee or escrow agent
921	must release to the viatical settlement provider all documents
922	necessary to complete the transfer of the insurance policy or
923	certificate of insurance so that the transfer, assignment, sale,
924	bequest, or devise may be effected.
925	(5) The independent third-party trustee or escrow agent
926	must transfer all proceeds of the viatical settlement contract
927	within 3 business days after receiving from the issuer of the
928	subject policy acknowledgment of the transfer, assignment,
929	bequest, sale, or devise. Failure to transfer proceeds as
930	required by this subsection renders the viatical settlement
931	contract and the transfer, assignment, bequest, sale, or devise
932	voidable.
933	(6) A viatical settlement provider may not negotiate or
934	enter into a viatical settlement contract with a viator if the
935	subject policy contains an accelerated benefits provision
936	allowing benefits to be paid for a period in advance of the
937	expected death which is equal to or exceeds the time period
938	available under the viatical settlement contract, and at an
939	amount which is equal to or exceeds the amount available under
940	the viatical settlement contract, unless the issuer of the
941	policy, in writing, denies, declines, or refuses to provide such
942	accelerated benefits. If the insurer does not respond to a
943	request to effectuate an accelerated benefits provision sent by
944	certified mail within 30 days after receiving the request, the
945	insurer shall be deemed to have denied, declined, or refused to
946	provide such accelerated benefits.
947	(7) At any time during the contestable period, within 20
948	days after a viator executes documents necessary to transfer
949	rights under an insurance policy or within 20 days of any
950	agreement, option, promise, or any other form of understanding,
951	express or implied, to viaticate the policy, the provider must
952	give notice to the insurer of the policy that the policy has or
953	will become a viaticated policy. The notice must be accompanied
954	by the documents required by s. 626.99287(5)(a) in their
955	entirety.
956	(8) If the owner of the insurance policy is not the
957	insured, the provider shall notify the insured that the policy
958	has become the subject of a viatical settlement contract within
959	20 days after the transfer of rights under the contract.
960	(9) If the provider transfers ownership or changes the
961	beneficiary of the insurance policy, the provider must
962	communicate the initial change in ownership or beneficiary to
963	the insured within 20 days after the change.
964	(10) The viatical settlement provider who effectuated the
965	viatical settlement contract with the viator (the "initial
966	provider") is responsible for tracking the insured, including,
967	but not limited to, keeping track of the insured's whereabouts
968	and health status, submission of death claims or assisting the
969	beneficiary in the submission of death claims, and the status of
970	the payment of premiums until the death of the insured. This
971	responsibility may be contracted out to a third party; however,
972	the ultimate responsibility remains with the initial provider.
973	This responsibility continues with the initial provider,
974	notwithstanding any transfers of the viaticated policy in the
975	secondary market. This subsection applies only to those
976	viaticated policies that are or are to become the subject of
977	viatical settlement purchase agreements.
978	Section 16. Section 626.99245, Florida Statutes, is
979	amended to read:
980	626.99245 Conflict of regulation of viaticals.--
981	(1) A viatical settlement provider who from this state
982	enters into a viatical settlement purchase agreement with a
983	purchaser who is a resident of another state that has enacted
984	statutes or adopted regulations governing viatical settlement
985	purchase agreements, shall be governed in the effectuation of
986	that viatical settlement purchase agreement by the statutes and
987	regulations of the purchaser's state of residence. If the state
988	in which the purchaser is a resident has not enacted statutes or
989	regulations governing viatical settlement purchase agreements,
990	the provider shall give the purchaser notice that neither
991	Florida nor his or her state regulates the transaction upon
992	which he or she is entering. For transactions in these states,
993	however, the viatical settlement provider is to maintain all
994	records required as if the transactions were executed in
995	Florida. However, the forms used in those states need not be
996	approved by the department.
997	(2) A viatical settlement provider or viatical settlement
998	broker who from this state enters into or negotiatesa viatical
999	settlement contract with a viator who is a resident of another
1000	state that has enacted statutes or adopted regulations governing
1001	viatical settlement contracts shall be governed in the
1002	effectuation of that viatical settlement contract by the
1003	statutes and regulations of the viator's state of residence. If
1004	the state in which the viator is a resident has not enacted
1005	statutes or regulations governing viatical settlement
1006	agreements, the provider shall give the viator notice that
1007	neither Florida nor his or her state regulates the transaction
1008	upon which he or she is entering. For transactions in those
1009	states, however, the viatical settlement provider or brokeris
1010	to maintain all records required as if the transactions were
1011	executed in Florida. The forms used in those states need not be
1012	approved by the officedepartment.
1013	(3) This section does not affect the requirement of ss.
1014	626.9911(6) and 626.9912(1) that a viatical settlement provider
1015	doing business from this state must obtain a viatical settlement
1016	license from the department. As used in this subsection, the
1017	term "doing business from this state" includes effectuating
1018	viatical settlement contracts and effectuating viatical
1019	settlement purchase agreements from offices in this state,
1020	regardless of the state of residence of the viator or the
1021	viatical settlement purchaser.
1022	Section 17. Section 626.9925, Florida Statutes, is amended
1023	to read:
1024	626.9925 Rules.—The commissiondepartmentmay adopt rules
1025	to administer this act, including rules establishing standards
1026	for evaluating advertising by licensees; rules providing for the
1027	collection of data, including electronic filing by licensees,
1028	for disclosures to viators or purchasers, and for the reporting
1029	of life expectancies; and rules defining terms used in this act,
1030	rules setting forth requirements for an anti-fraud plan, and
1031	rules prescribing recordkeeping requirements relating to the
1032	business of viatical settlementsexecuted viatical settlement
1033	contracts and viatical settlement purchase agreements.
1034	Section 18. Section 626.9926, Florida Statutes, is amended
1035	to read:
1036	626.9926 Rate regulation not authorized.--Nothing in this
1037	act shall be construed to authorize the office or commission
1038	departmentto directly or indirectly regulate the amount paid as
1039	consideration for entry into a viatical settlement contract or
1040	viatical settlement purchase agreement.
1041	Section 19. Section 626.9927, Florida Statutes, is amended
1042	to read:
1043	626.9927 Unfair trade practices; cease and desist;
1044	injunctions; civil remedy.--
1045	(1) A violation of this act is an unfair trade practice
1046	under ss. 626.9521 and 626.9541 and is subject to the penalties
1047	provided in the insurance code. Part IXX of this chapter,
1048	entitled Unfair Insurance Trade Practices,applies to a licensee
1049	under this act or a transaction subject to this act as if a
1050	viatical settlement contract and a viatical settlement purchase
1051	agreementwere an insurance policy.
1052	(2) In addition to the penalties and other enforcement
1053	provisions of this act, if any person violates this act or any
1054	rule implementing this act, the officedepartmentmay seek an
1055	injunction in the circuit court of the county where the person
1056	resides or has a principal place of business and may apply for
1057	temporary and permanent orders that the officedepartment
1058	determines necessary to restrain the person from committing the
1059	violation.
1060	(3) Any person damaged by the acts of a person in
1061	violation of this act may bring a civil action against the
1062	person committing the violation in the circuit court of the
1063	county in which the alleged violator resides or has a principal
1064	place of business or in the county wherein the alleged violation
1065	occurred. Upon an adverse adjudication, the defendant is liable
1066	for damages, together with court costs and reasonable attorney's
1067	fees incurred by the plaintiff. When so awarded, court costs and
1068	attorney's fees must be included in the judgment or decree
1069	rendered in the case. If it appears to the court that the suit
1070	brought by the plaintiff is frivolous or brought for purposes of
1071	harassment, the plaintiff is liable for court costs and
1072	reasonable attorney's fees incurred by the defendant.
1073	Section 20. Section 626.99272, Florida Statutes, is
1074	amended to read:
1075	626.99272 Cease and desist orders and fines.--
1076	(1) The officedepartmentmay issue a cease and desist
1077	order upon a person that violates any provision of this part,
1078	any rule or order adopted by the officedepartment, or any
1079	written agreement entered into with the officedepartment.
1080	(2) When the officedepartmentfinds that such an action
1081	presents an immediate danger to the public which requires an
1082	immediate final order, it may issue an emergency cease and
1083	desist order reciting with particularity the facts underlying
1084	such findings. The emergency cease and desist order is effective
1085	immediately upon service of a copy of the order on the
1086	respondent and remains effective for 90 days. If the office
1087	departmentbegins nonemergency cease and desist proceedings
1088	under subsection (1), the emergency cease and desist order
1089	remains effective, absent an order by an appellate court of
1090	competent jurisdiction pursuant to s. 120.68, until the
1091	conclusion of proceedings under ss. 120.569 and 120.57.
1092	(3) The officedepartmentmay impose and collect an
1093	administrative fine not to exceed $10,000 for each nonwillful
1094	violation and $25,000 for each willful violation of any
1095	provision of this part.
1096	Section 21. Section 626.99275, Florida Statutes, is
1097	amended to read:
1098	626.99275 Prohibited practices; penalties.--
1099	(1) It is unlawful for any person:
1100	(a) To commit a fraudulent viatical settlement act as
1101	defined in s. 626.9911knowingly enter into, broker, or
1102	otherwise deal in a viatical settlement contract the subject of
1103	which is a life insurance policy, knowing that the policy was
1104	obtained by presenting materially false information concerning
1105	any fact material to the policy or by concealing, for the
1106	purpose of misleading another, information concerning any fact
1107	material to the policy, where the viator or the viator's agent
1108	intended to defraud the policy's issuer.
1109	(b) In the solicitation or sale of a viatical settlement
1110	purchase agreement:
1111	1. To employ any device, scheme, or artifice to defraud;
1112	2. To obtain money or property by means of an untrue
1113	statement of a material fact or by any omission to state a
1114	material fact necessary in order to make the statements made, in
1115	light of the circumstances under which they were made, not
1116	misleading; or
1117	3. To engage in any transaction, practice, or course of
1118	business which operates or would operate as a fraud or deceit
1119	upon a person.
1120	(b)(c)To knowingly engage in any transaction, practice,
1121	or course of business intending thereby to avoid the notice
1122	requirements of s. 626.9924(7).
1123	(2) A person who violates any provision of this section
1124	commits:
1125	(a) A felony of the third degree, punishable as provided
1126	in s. 775.082, s. 775.083, or s. 775.084, if the aggregate face
1127	amount of the insurance policiespolicy involved areisvalued
1128	at any amount less than $20,000.
1129	(b) A felony of the second degree, punishable as provided
1130	in s. 775.082, s. 775.083, or s. 775.084, if the aggregate face
1131	amount of the insurance policiespolicy involved areisvalued
1132	at $20,000 or more, but less than $100,000.
1133	(c) A felony of the first degree, punishable as provided
1134	in s. 775.082, s. 775.083, or s. 775.084, if the aggregate face
1135	amount of the insurance policiespolicy involved areisvalued
1136	at $100,000 or more.
1137	(3) The provisions of this section do not apply to a
1138	conservator of a viatical settlement provider appointed by a
1139	court of competent jurisdiction who transfers ownership of
1140	viaticated policies pursuant to that court’s order.
1141	Section 22. Section 626.99277, Florida Statutes, is
1142	amended to read:
1143	626.99277 False representations; deceptive words.--
1144	(1) It is unlawful for a person in the advertisement,
1145	offer, or sale of a viatical settlement purchase agreement to
1146	misrepresent that such an agreement has been guaranteed,
1147	sponsored, recommended, or approved by the state, or any agency
1148	or officer of the state or by the United States or any agency or
1149	officer of the United States.
1150	(1)(2) It is unlawful for a person in conjunction with the
1151	business of viatical settlementssale of a viatical settlement
1152	purchase agreementto directly or indirectly misrepresent that
1153	the person has been sponsored, recommended, or approved, or that
1154	his or her abilities or qualifications have in any respect been
1155	passed upon, by this state or any other state, or any agency or
1156	officer thereof, or by the United States or any agency or
1157	officer thereof.
1158	(2)(3) It is unlawful for a person engaged in the business
1159	of viatical settlementsin the offer or sale of a viatical
1160	settlement purchase agreement to obtain money or property by:
1161	(a) A misrepresentation that the viatical settlement
1162	purchase agreement purchased, offered, or sold is guaranteed,
1163	sponsored, recommended, or approved by this state or any other
1164	state, or any agency or officer thereof, or by the United States
1165	or any agency or officer thereof.
1166	(b)a misrepresentation that the person is sponsored,
1167	recommended, or approved, or that the person's abilities or
1168	qualifications have in any respect been passed upon, by this
1169	state or any other state, or any agency or officer thereof, or
1170	by the United States or any agency or officer thereof.
1171	(3)(4)Neither subsection (1) nor subsection (2) may be
1172	construed to prohibit a statement that the person is licensed or
1173	appointed under this part if such a statement is required by
1174	this part or rules adopted under this part, if the statement is
1175	true in fact, and if the effect of the statement is not
1176	misrepresented.
1177	(5) A person may not represent that a viatical settlement
1178	purchase agreement is guaranteed by any insurance guaranty fund.
1179	(6) A person may not represent that the investment in a
1180	viatical settlement purchase agreement is "guaranteed," that the
1181	principal is "safe," or that the investment is free of risk.
1182	Section 23. Section 626.99278, Florida Statutes, is
1183	amended to read:
1184	626.99278 Viatical provider anti-fraud plan.—Every
1185	applicant or licensed viatical settlement provider and viatical
1186	settlement brokermust adopt an anti-fraud plan and file it with
1187	the Division of Insurance Fraud of the department upon
1188	applicationon or before December 1, 2000. Each anti-fraud plan
1189	shall include:
1190	(1) A description of the procedures for detecting and
1191	investigating possible fraudulent acts and procedures for
1192	resolving material inconsistencies between medical records and
1193	insurance applications;
1194	(2) A description of the procedures for the mandatory
1195	reporting of possible fraudulent insurance acts to the Division
1196	of Insurance Fraud of the department;
1197	(3) A description of the plan for anti-fraud education and
1198	training of its underwriters or other personnel; and
1199	(4) A written description or chart outlining the
1200	organizational arrangement of the anti-fraud personnel who are
1201	responsible for the investigation and reporting of possible
1202	fraudulent insurance acts, and investigating unresolved material
1203	inconsistencies between medical records and insurance
1204	applications.
1205	Section 24. Section 626.9928, Florida Statutes, is amended
1206	to read:
1207	626.9928 Acquisitions.--Acquisition of interest in a
1208	viatical settlement provider or viatical settlement brokeris
1209	subject to s. 628.4615.
1210	Section 25. Section 626.99285, Florida Statutes, is
1211	amended to read:
1212	626.99285 Applicability of insurance code.--In addition to
1213	other applicable provisions cited in the insurance code, the
1214	office and commission havedepartment hasthe authority granted
1215	under ss. 624.310, 626.611, 626.621, 626.901, 626.902,and
1216	626.989 to regulate the business of viatical settlements
1217	settlement providers, viatical settlement brokers, viatical
1218	settlement sales agents, viatical settlement contracts, viatical
1219	settlement purchase agreements, and viatical settlement
1220	transactions.
1221	Section 26. Subsection (1) of section 626.989, Florida
1222	Statutes, is amended to read:
1223	626.989 Investigation by department or Division of
1224	Insurance Fraud; compliance; immunity; confidential information;
1225	reports to division; division investigator's power of arrest.--
1226	(1) For the purposes of this section, a person commits a
1227	"fraudulent insurance act" if the person knowingly and with
1228	intent to defraud presents, causes to be presented, or prepares
1229	with knowledge or belief that it will be presented, to or by an
1230	insurer, self-insurer, self-insurance fund, servicing
1231	corporation, purported insurer, broker, or any agent thereof,
1232	any written statement as part of, or in support of, an
1233	application for the issuance of, or the rating of, any insurance
1234	policy, or a claim for payment or other benefit pursuant to any
1235	insurance policy, which the person knows to contain materially
1236	false information concerning any fact material thereto or if the
1237	person conceals, for the purpose of misleading another,
1238	information concerning any fact material thereto. The term also
1239	includes any act that would constitute a fraudulent viatical
1240	settlement act pursuant to s. 626.9911(1).For the purposes of
1241	this section, the term "insurer" also includes any health
1242	maintenance organization and the term "insurance policy" also
1243	includes a health maintenance organization subscriber contract.
1244	Section 27. Sections 626.99235, 626.99236, and 626.99295,
1245	Florida Statutes, are repealed.
1246	Section 28. This act shall take effect upon becoming a
1247	law.