HB 1643

CS

CHAMBER ACTION

1	The Committee on Insurance recommends the following:
2
3	Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to life insurance and annuity contracts;
7	providing a popular name; amending s. 624.402, F.S.;
8	providing that a certificate of authority is not required
9	for certain life insurance policies or annuity contracts
10	issued by an insurer domiciled outside the United States
11	and covering only persons who are not residents of the
12	United States; providing criteria, requirements, and
13	limitations; requiring the insurer to disclose certain
14	information; providing for the Office of Insurance
15	Regulation to determine when the insurer is no longer
16	eligible for the exemption; providing an exemption from
17	certain taxes; requiring life insurance applications and
18	policies and annuity contracts to provide certain
19	disclosure statements; specifying application of certain
20	provisions to single premium life insurance policies and
21	single premium annuity contracts issued to certain
22	nonresidents; amending s. 627.404, F.S.; defining the term
23	"charitable organization" for purposes of determining
24	entities that are eligible to purchase life insurance on
25	an insured; providing criteria and limitations; providing
26	an effective date.
27
28	Be It Enacted by the Legislature of the State of Florida:
29
30	Section 1.  This act may be referred to by the popular name
31	the "Isabella Llorente Nonresident Life Insurance and Annuity
32	Contract Act of 2004."
33	Section 2.  Subsection (8) is added to section 624.402,
34	Florida Statutes, to read:
35	624.402  Exceptions, certificate of authority required.--A
36	certificate of authority shall not be required of an insurer
37	with respect to:
38	(8)(a)  Life insurance policies or annuity contracts issued
39	by an insurer domiciled outside the United States covering only
40	persons who are not residents of the United States at the time
41	of issuance, provided:
42	1.  The insurer must currently be an authorized insurer in
43	its country of domicile as to the kind or kinds of insurance
44	proposed to be offered and must have been such an insurer for
45	not fewer than the immediately preceding 3 years, or must be the
46	wholly owned subsidiary of such authorized insurer or must be
47	the wholly owned subsidiary of an already eligible authorized
48	insurer as to the kind or kinds of insurance proposed for a
49	period of not fewer than the immediately preceding 3 years.
50	However, the office may waive the 3-year requirement if the
51	insurer has operated successfully for a period of at least the
52	immediately preceding year and has capital and surplus of not
53	less than $25 million.
54	2.  Before granting eligibility, the requesting insurer
55	shall furnish the office with a duly authenticated copy of its
56	current annual financial statement, in English, and with all
57	monetary values therein expressed in United States dollars, at
58	an exchange rate, in the case of statements originally made in
59	the currencies of other countries, then-current and shown in the
60	statement, and with such additional information relative to the
61	insurer as the office may request.
62	3.  The insurer must have and maintain surplus as to
63	policyholders of not less than $15 million. Any such surplus as
64	to policyholders shall be represented by investments consisting
65	of eligible investments for like funds of like domestic insurers
66	under part II of chapter 625; however, any such surplus as to
67	policyholders may be represented by investments permitted by the
68	domestic regulator of such alien insurance company if such
69	investments are substantially similar in terms of quality,
70	liquidity, and security to eligible investments for like funds
71	of like domestic insurers under part II of chapter 625.
72	4.  The insurer must be of good reputation as to the
73	providing of service to its policyholders and the payment of
74	losses and claims.
75	5.  The insurer, to maintain eligibility, shall furnish the
76	office within the time period specified in s. 624.424(1)(a) a
77	duly authenticated copy of its current annual and quarterly
78	financial statements, in English, and with all monetary values
79	therein expressed in United States dollars, at an exchange rate,
80	in the case of statements originally made in the currencies of
81	other countries, then-current and shown in the statement, and
82	with such additional information relative to the insurer as the
83	office may request.
84	6.  An insurer receiving eligibility under this subsection
85	shall agree to make its books and records pertaining to its
86	operations from this state available for inspection during
87	normal business hours upon request of the office.
88	7.  The insurer shall provide to the applicant for the
89	policy or contract a copy of the most recent quarterly financial
90	statements of the insurer providing, in clear and conspicuous
91	language:
92	a.  The date of organization of the insurer.
93	b.  The identity of and rating assigned by each recognized
94	insurance company rating organization that has rated the insurer
95	or, if applicable, that the insurer is unrated.
96	c.  That the insurer does not hold a certificate of
97	authority issued in Florida and that the office does not
98	exercise regulatory oversight over the insurer.
99	d.  The identity and address of the regulatory authority
100	exercising oversight of the insurer.
101
102	This paragraph does not impose upon the office any duty or
103	responsibility to determine the actual financial condition or
104	claims practices of any unauthorized insurer, and the status of
105	eligibility, if granted by the office, indicates only that the
106	insurer appears to be sound financially and to have satisfactory
107	claims practices and that the office has no credible evidence to
108	the contrary.
109	(b)  If at any time the office has reason to believe that
110	an insurer issuing policies or contracts pursuant to this
111	subsection is insolvent or in unsound financial condition, does
112	not make reasonable prompt payment of benefits, or is no longer
113	eligible under the conditions specified in this subsection, the
114	office shall withdraw the eligibility of the insurer to issue
115	policies or contracts pursuant to this subsection without having
116	a certificate of authority issued by the office.
117	(c)  This subsection does not provide an exception to the
118	agent licensure requirements of chapter 626. Any insurer issuing
119	policies or contracts pursuant to this subsection shall appoint
120	the agents that the insurer uses to sell such policies or
121	contracts, as provided in chapter 626.
122	(d)  An insurer issuing policies or contracts pursuant to
123	this subsection is subject to part IX of chapter 626, Unfair
124	Insurance Trade Practices, and the office may take such actions
125	against the insurer for a violation as are provided in that
126	part.
127	(e)  Policies and contracts issued pursuant to this
128	subsection are not subject to the premium tax specified in s.
129	624.509.
130	(f)  Applications for life insurance coverage offered under
131	this subsection must contain, in contrasting color and not less
132	than 12-point type, the following statement on the same page as
133	the applicant's signature:
134
135	"This policy is primarily governed by the laws of a foreign
136	country. As a result, all of the rating and underwriting
137	laws applicable to policies filed in this state do not
138	apply to this coverage, which may result in your premiums
139	being higher than would be permissible under a Florida-
140	approved policy. Any purchase of individual life insurance
141	should be considered carefully, as future medical
142	conditions may make it impossible to qualify for another
143	individual life policy. If the insurer issuing your policy
144	becomes insolvent, this policy is not covered by the
145	Florida Life and Health Insurance Guaranty Association.
146	For information concerning individual life coverage under a
147	Florida-approved policy, consult your agent or the Florida
148	Department of Financial Services."
149
150	(g)  All life insurance policies and annuity contracts
151	issued pursuant to this subsection must contain on the first
152	page of the policy or contract, in contrasting color and not
153	less than 10-point type, the following statement:
154
155	"The benefits of the policy providing your coverage are
156	governed primarily by the law of a country other than the
157	United States."
158
159	(h)  All single premium life insurance policies and single
160	premium annuity contracts issued to persons who are not
161	residents of the United States pursuant to this subsection shall
162	be subject to the provisions of chapter 896.
163	Section 3.  Subsection (2) of section 627.404, Florida
164	Statutes, is amended to read:
165	627.404  Insurable interest; personal insurance.--
166	(2)  A charitable organization that meets the requirements
167	of s. 501(c)(3) of the Internal Revenue Code of 1986, as
168	amended, may own or purchase life insurance on an insured who
169	consents to the ownership or purchase of that insurance. For
170	purposes of this subsection, the term "charitable organization"
171	means:
172	(a)  Any organization that meets the requirements of s.
173	501(c)(3) of the Internal Revenue Code of 1986, as amended;
174	(b)  Any organization to which a charitable contribution
175	could be made under s. 170(c)(1), s. 170(c)(2), or s. 170(c)(3)
176	of the Internal Revenue Code of 1986, as amended; or
177	(c)  Any trust, partnership, limited liability company, or
178	similar entity approved in writing by an organization described
179	in paragraph (a) or paragraph (b) to procure or cause to be
180	procured the combination of a life insurance policy and annuity
181	contract on the life of the individual insured. Before an entity
182	as described in this paragraph can quality as a charitable
183	organization for purposes of this subsection:
184	1.  The individual insured must be an accredited investor
185	as defined in s. 230.501(a) in Rule 501 Reg. D of the Securities
186	Act Rules; or
187	2.  The approving organization described in paragraph (a)
188	or paragraph (b) must have total assets in excess of $5 million
189	at the time the application for the life insurance policy and
190	annuity contract is made.
191
192	Except in the case of a material default or insolvency of the
193	life insurer or annuity company, or a misrepresentation of the
194	individual insured on the application for the life insurance
195	policy or annuity contract providing grounds for a contest by
196	the life insurer or annuity company, the life insurance policy
197	procured or caused to be procured by an entity described in
198	paragraph (c) may not be assigned or transferred by such entity.
199	Such charitable organization has an insurable interest in the
200	life of the insured whether the charitable organization
201	originally purchased the insurance or the insurance is later
202	transferred to the charitable organization by the insured.
203	Section 4.  This act shall take effect July 1, 2004.

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