Amendment

Bill No. 2038

Amendment No. 043301

CHAMBER ACTION
Senate		House
.
.
.

---

---

1	Representative Rivera offered the following:
2
3	Amendment (with title amendment)
4	On page 28, between line(s) 27 and 28, insert:
5	Section 12.  Effective January 1, 2005, subsections (3),
6	(4), and (5) are added to section 627.404, Florida Statutes, to
7	read:
8	627.404  Insurable interest; personal insurance.--
9	(3)  Any trust, partnership, limited liability company, or
10	similar entity that is approved in writing by a charitable
11	organization that meets the requirements of s. 501(c)(3) of the
12	Internal Revenue Code of 1986, as amended, or by an organization
13	to which a charitable contribution could be made under
14	s.170(c)(1), (2), or (3) of the Internal Revenue Code of 1986,
15	as amended, may own or purchase life insurance on an insured who
16	consents in writing to the ownership or purchase of that
17	insurance, subject to the following:
18	(a)  The approved trust, partnership, limited liability
19	company, or similar entity must be, in part, formed for the
20	purpose of generating funds for one or more approving
21	organizations that meet the requirements of s. 501(c)(3) of the
22	Internal Revenue Code of 1986, as amended, or organizations to
23	which a charitable contribution could be made under
24	s.170(c)(1),(2), or (3) of the Internal Revenue Code of 1986, as
25	amended, that are designated by the consenting individual
26	insureds.
27	(b)  The approved trust, partnership, limited liability
28	company, or similar entity may procure or cause to be procured a
29	combination of life insurance policies and annuity contracts on
30	the life of consenting individual insureds. Payments under the
31	annuity contracts shall be reasonably anticipated to fund the
32	premiums on the life insurance policies for the second and
33	succeeding years.
34	(c)  At least 99 percent of all funds used by the approved
35	trust, partnership, limited liability company, or similar entity
36	to procure the life insurance policies and annuity contracts
37	must be from qualified institutional buyers as defined by Rule
38	144A of the Federal Securities Act of 1933 or proceeds from the
39	annuity contracts or other insurance policies and interest
40	income thereon.
41	(d)  The investment in the approved trust, partnership,
42	limited liability company, or similar entity by qualified
43	institutional buyers shall be pursuant to a nonpublic offering
44	or a public offering through a registered broker or dealer under
45	the Securities Exchange Act of 1934.
46	(e)  No qualified institutional buyer may procure or hold
47	any direct interest in the life insurance policies or the
48	annuity contracts, or the benefits from such policies or
49	contracts, except as part of a secured transaction, subject to
50	chapter 517 or to federal securities laws.
51	(f)  The organization that meets the requirements of s.
52	501(c)(3) of the Internal Revenue Code of 1986, as amended, or
53	organization to which a charitable contribution could be made
54	under s. 170(c)(1), (2), or (3) of the Internal Revenue Code of
55	1986, as amended,, as designated by the individual insured,
56	must, at the time of the acquisition of the life insurance
57	policies by the approved trust, partnership, limited liability
58	company, or similar entity, reasonably anticipate receiving not
59	less than 90 percent of the death benefit proceeds of each life
60	insurance policy on such individual insured after the return of
61	the amount invested and yield accrued and payable to the
62	qualified institutional buyers in accordance with the securities
63	offering or other disclosure materials. The reasonably
64	anticipated minimum percentage or amount of the death benefit
65	proceeds of the life insurance policies to be ultimately
66	received by the designated organization must be disclosed in the
67	relevant securities offering or other disclosure materials used
68	in any offering.
69	(g)  The individual insured and each designated
70	organization that meets the requirements of s. 501(c)(3) of the
71	Internal Revenue Code of 1986, as amended, or organization to
72	which a charitable contribution could be made under s.
73	170(c)(1), (2), or (3) of the Internal Revenue Code of 1986, as
74	amended, must be informed, prior to the ownership or purchase of
75	life insurance on the individual insured by the approved trust,
76	partnership, limited liability company, or similar entity, of
77	the minimum percentage or amount of the proceeds of the life
78	insurance policy that is reasonably anticipated to be ultimately
79	paid to the designated organization.
80	(h)  The individual insured must provide an affidavit
81	stating that neither the individual insured or any relative of
82	the individual insured as defined in s. 112.312(21) nor any
83	entity controlled by the individual insured or relative, other
84	than an organization that meets the requirements of s. 501(c)(3)
85	of the Internal Revenue Code of 1986, as amended, or an
86	organization to which a charitable contribution could be made
87	under s. 170(c)(1), (2), or (3) of the Internal Revenue Code of
88	1986, as amended, received any monetary remuneration in
89	consideration for the individual insured's consent to purchase
90	the life insurance policy, except third-party expenses incurred
91	in connection with the grant of such consent.
92	(i)  At the time of the life insurance application, the
93	designated organization that meets the requirements of s.
94	501(c)(3) of the Internal Revenue Code of 1986, as amended, or
95	organization to which a charitable contribution could be made
96	under s. 170(c)(1), (2), or (3) of the Internal Revenue Code of
97	1986, as amended, must have been in existence for 3 years and
98	have assets in excess of $5 million, or the individual insured
99	must be an accredited investor as defined by Rule 501 of
100	Regulation D of the Federal Securities Act of 1933.
101	(4)  With respect to the designated trust, partnership,
102	limited liability company, or similar entity described in
103	subsection (3), except in the case of a material default or
104	commencement of a delinquency proceeding of the life insurer or
105	annuity company or in the case of the life insurer or annuity
106	company exercising its right to contest the life insurance
107	policy or annuity contract:
108	(a)  The life insurance policies procured or caused to be
109	procured by such entity may not be assigned or transferred by
110	such entity;
111	(b)  The ownership or beneficiary designation in favor of
112	such entity of the life insurance policies procured or caused to
113	be procured by such entity may not be changed; or
114	(c)  A policy loan under the life insurance policies
115	procured or caused to be procured by such entity may not be
116	taken out by such entity,
117
118	unless such entity applies for and obtains a license pursuant to
119	the provisions of s. 626.9912 prior to such transfer or
120	assignment of ownership, change in beneficiary, or policy loan.
121	(5)  A  trust, partnership, limited liability company, or
122	similar entity that meets the requirements of subsection (3) has
123	an insurable interest in the life of the individual insured.
124
125
126	================= T I T L E  A M E N D M E N T =================
127	On page 2, line 21,
128	remove:  all of said line,
129
130	and insert:
131	the provision; amending s. 627.404, F.S.; authorizing certain
132	entities to purchase or own life insurance policies on insureds
133	under certain circumstances; providing criteria and
134	requirements; providing limitations; providing an exception;
135	amending s. 627.4091, F.S.;

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