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