Amendment

Bill No. 1643

Amendment No. 840719

CHAMBER ACTION
Senate		House
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1	Representative Llorente offered the following:
2
3	Amendment (with title amendment)
4	Between lines 202 and 203, insert:
5	Section 4.  Section 625.081, Florida Statutes, is amended
6	to read:
7	625.081  Reserve for health insurance.--For all health
8	insurance policies, the insurer shall maintain an active life
9	reserve which places a sound value on the insurer's liabilities
10	under such policies; is not less than the reserve according to
11	appropriate standards set forth in rules issued by the
12	commission; and, with the exception of credit disability
13	insurance, in no event, is less in the aggregate than the pro
14	rata gross unearned premiums for such policies.
15	Section 5.  Paragraphs (a), (e), and (f) of subsection (5)
16	and subsection (13) of section 625.121, Florida Statutes, are
17	amended, and paragraphs (k) and (l) are added to subsection (5)
18	of said section, to read:
19	625.121  Standard Valuation Law; life insurance.--
20	(5)  MINIMUM STANDARD FOR VALUATION OF POLICIES AND
21	CONTRACTS ISSUED ON OR AFTER OPERATIVE DATE OF STANDARD
22	NONFORFEITURE LAW.--Except as otherwise provided in paragraph
23	(h) and subsections (6), (11), and (14), the minimum standard
24	for the valuation of all such policies and contracts issued on
25	or after the operative date of s. 627.476 (Standard
26	Nonforfeiture Law for Life Insurance) shall be the
27	commissioners' reserve valuation method defined in subsections
28	(7), (11), and (14); 5 percent interest for group annuity and
29	pure endowment contracts and 3.5 percent interest for all other
30	such policies and contracts, or in the case of life insurance
31	policies and contracts, other than annuity and pure endowment
32	contracts, issued on or after July 1, 1973, 4 percent interest
33	for such policies issued prior to October 1, 1979, and 4.5
34	percent interest for such policies issued on or after October 1,
35	1979; and the following tables:
36	(a)  For all ordinary policies of life insurance issued on
37	the standard basis, excluding any disability and accidental
38	death benefits in such policies:
39	1.  For policies issued prior to the operative date of s.
40	627.476(9), the commissioners' 1958 Standard Ordinary Mortality
41	Table; except that, for any category of such policies issued on
42	female risks, modified net premiums and present values, referred
43	to in subsection (7), may be calculated according to an age not
44	more than 6 years younger than the actual age of the insured.;
45	and
46	2.  For policies issued on or after the operative date of
47	s. 627.476(9), the commissioners' 1980 Standard Ordinary
48	Mortality Table or, at the election of the insurer for any one
49	or more specified plans of life insurance, the commissioners'
50	1980 Standard Ordinary Mortality Table with Ten-Year Select
51	Mortality Factors.
52	3.  For policies issued on or after July 1, 2004, ordinary
53	mortality tables, adopted after 1980 by the National Association
54	of Insurance Commissioners, adopted by rule by the Commission
55	for use in determining the minimum standard of valuation for
56	such policies.
57	(e)  For total and permanent disability benefits in or
58	supplementary to ordinary policies or contracts:
59	1.  For policies or contracts issued on or after January 1,
60	1966, the tables of period 2 disablement rates and the 1930 to
61	1950 termination rates of the 1952 disability study of the
62	Society of Actuaries, with due regard to the type of benefit.;
63	2.  For policies or contracts issued on or after January 1,
64	1961, and prior to January 1, 1966, either those tables or, at
65	the option of the insurer, the class three disability table
66	(1926).; and
67	3.  For policies issued prior to January 1, 1961, the class
68	three disability table (1926).
69	4.  For policies or contracts issued on or after July 1,
70	2004, tables of disablement rates and termination rates adopted
71	after 1980 by the National Association of Insurance
72	Commissioners, adopted by rule by the commission for use in
73	determining the minimum standard of valuation for those policies
74	or contracts.
75
76	Any such table for active lives shall be combined with a
77	mortality table permitted for calculating the reserves for life
78	insurance policies.
79	(f)  For accidental death benefits in or supplementary to
80	policies:
81	1.  For policies issued on or after January 1, 1966, the
82	1959 Accidental Death Benefits Table.;
83	2.  For policies issued on or after January 1, 1961, and
84	prior to January 1, 1966, either that table or, at the option of
85	the insurer, the Intercompany Double Indemnity Mortality Table.;
86	and
87	3.  For policies issued prior to January 1, 1961, the
88	Intercompany Double Indemnity Mortality Table.
89	4.  For policies issued on or after July 1, 2004, tables of
90	accidental death benefits adopted after 1980 by the National
91	Association of Insurance Commissioners, adopted by rule by the
92	commission for use in determining the minimum standard of
93	valuation for those policies.
94
95	Either table shall be combined with a mortality table permitted
96	for calculating the reserves for life insurance policies.
97	(k)  For individual annuity and pure endowment contracts
98	issued on or after July 1, 2004, excluding any disability and
99	accidental death benefits purchased under those contracts,
100	individual annuity mortality tables adopted after 1980 by the
101	National Association of Insurance Commissioners, adopted by rule
102	by the commission for use in determining the minimum standard of
103	valuation for those contracts.
104
105	(l)  For all annuities and pure endowments purchased on or
106	after July 1, 2004, under group annuity and pure endowment
107	contracts, excluding any disability and accidental death
108	benefits purchased under those contracts, group annuity
109	mortality tables adopted after 1980 by the National Association
110	of Insurance Commissioners, adopted by rule by the commission
111	for use in determining the minimum standard of valuation for
112	those contracts.
113	(13)  APPLICABILITY TO CREDIT LIFE AND DISABILITY
114	INSURANCE POLICIES.-
115	(a)  For policies issued prior to January 1, 2004:
116	1.  The minimum reserve for single-premium credit
117	disability insurance, monthly premium credit life insurance, and
118	monthly premium credit disability insurance shall be the
119	unearned gross premium.
120	2.  As to single-premium credit life insurance policies,
121	the insurer shall establish and maintain reserves which are not
122	less than the value, at the valuation date, of the risk for the
123	unexpired portion of the period for which the premium has been
124	paid as computed on the basis of the commissioners' 1980
125	Standard Ordinary Mortality Table and 3.5 percent interest. At
126	the discretion of the Office, the insurer may make a reasonable
127	assumption as to the ages at which net premiums are to be
128	determined. In lieu of the foregoing basis, reserves based upon
129	unearned gross premiums may be used at the option of the
130	insurer.
131	(b)  For policies issued on or after January 1, 2004:
132	1.  The minimum reserve for single-premium credit
133	disability insurance shall be the unearned gross premium or
134	shall be based upon a morbidity table that is adopted by the
135	National Association of Insurance Commissioners and is specified
136	in a rule the Commission shall adopt pursuant to paragraph (14)
137	of 625.121.
138	2.  The minimum reserve for monthly premium credit
139	disability insurance shall be the unearned gross premium.
140	3.  The minimum reserve for monthly premium credit life
141	insurance shall be the unearned gross premium.
142	4.  As to single-premium credit life insurance policies,
143	the insurer shall establish and maintain reserves which are not
144	less than the value, at the valuation date, of the risk for the
145	unexpired portion of the period for which the premium has been
146	paid as computed on the basis of the commissioners' 1980
147	Standard Ordinary Mortality Table or any ordinary mortality
148	table, adopted after 1980 by the National Association of
149	Insurance Commissioners, that is approved by rule adopted by the
150	commission for use in determining the minimum standard of
151	valuation for such policies, and an interest rate determined in
152	accordance with s. 625.121(6). At the discretion of the office,
153	the insurer may make a reasonable assumption as to the ages at
154	which net premiums are to be determined. In lieu of the
155	foregoing basis, reserves based upon unearned gross premiums may
156	be used at the option of the insurer This section does not apply
157	as to those credit life insurance policies for which reserves
158	are computed and maintained as required under s. 625.131.
159	Section 6.  Section 625.131, Florida Statutes, is repealed.
160
161	================ T I T L E  A M E N D M E N T =============
162	Remove line(s) 25 and insert:
163	an insured; providing criteria and limitations; amending s.
164	625.081, F.S.; excepting credit disability insurance from certain
165	health insurance reserve requirements; providing an exception;
166	amending s. 625.121, F.S.; providing additional minimum
167	standards for valuation of insurance policies and contracts;
168	providing minimum reserve requirements for credit life and
169	disability insurance policies; repealing s. 625.031, F.S.;
170	relating to special reserve bases for credit life and disability
171	policies; providing

CODING: Words stricken are deletions; words underlined are additions.