| 1 | Representative Rivera offered the following: |
| 2 |
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| 3 | Amendment (with title amendment) |
| 4 | On page 37, between line(s) 29 and 30, |
| 5 | insert: |
| 6 | Section 20. Effective upon this act becoming a law, |
| 7 | subsections (3), (4), and (5) are added to section 627.404, |
| 8 | Florida Statutes, to read: |
| 9 | 627.404 Insurable interest; personal insurance.-- |
| 10 | (3) Any trust, partnership, limited liability company, or |
| 11 | similar entity that is approved in writing either by a public or |
| 12 | private university in this state that receives state funds and |
| 13 | meets the requirements of s. 501(c)(3) of the Internal Revenue |
| 14 | Code of 1986, as amended, or a public or private university in |
| 15 | Florida that receives state funds to which a charitable |
| 16 | contribution could be made under s.170(c)(1), (2) or (3) of the |
| 17 | Internal Revenue Code of 1986, as amended, may own or purchase |
| 18 | life insurance on an insured who consents in writing to the |
| 19 | ownership or purchase of that insurance, subject to the |
| 20 | following: |
| 21 | (a) The approved trust, partnership, limited liability |
| 22 | company, or similar entity must be, in part, formed for the |
| 23 | purpose of generating funds for one or more approving public or |
| 24 | private universities in this state that receive state funds. |
| 25 | (b) The approved trust, partnership, limited liability |
| 26 | company, or similar entity may procure or cause to be procured a |
| 27 | combination of life insurance policies and annuity contracts on |
| 28 | the life of consenting individual insureds. Payments under 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) At least 99 percent of all funds used by the approved |
| 33 | trust, partnership, limited liability company, or similar entity |
| 34 | to procure the life insurance policies and annuity contracts |
| 35 | must be from qualified institutional buyers as defined by Rule |
| 36 | 144A of the Federal Securities Act of 1933 or proceeds from |
| 37 | annuity contracts or other insurance policies procured with the |
| 38 | funds invested by qualified institutional buyers, and interest |
| 39 | income thereon. |
| 40 | (d) The investment in the approved trust, partnership, |
| 41 | limited liability company, or similar entity by qualified |
| 42 | institutional buyers shall be pursuant to a non-public offering |
| 43 | or a public offering through a registered broker ordealer under |
| 44 | the Securities Exchange Act of 1934. |
| 45 | (e) No qualified institutional buyer may procure or hold |
| 46 | any direct interest in the life insurance policies or the |
| 47 | annuity contracts, or the benefits from such policies or |
| 48 | contracts, except as part of a secured transaction, subject to |
| 49 | chaper 517 or to federal securities laws. |
| 50 | (f) The public or private university in this state that |
| 51 | receives state funds as designated by the individual insured |
| 52 | must, at the time of the acquisition of the life insurance |
| 53 | policies by the approved trust, partnership, limited liability |
| 54 | company, or similar entity, reasonably anticipate receiving the |
| 55 | death benefit proceeds of each life insurance policy on such |
| 56 | individual insured after the return of the amount invested and |
| 57 | yield accrued and payable to the qualified institutional buyers |
| 58 | in accordance with the securities offering or other disclosure |
| 59 | materials. The reasonably anticipated minimum percentage or |
| 60 | amount of the death benefit proceeds of the life insurance |
| 61 | policies to be ultimately received by the designated |
| 62 | organization must be disclosed in the relevant securities |
| 63 | offering or other disclosure materials used in any offering. |
| 64 | (g) The individual insured and each designated public or |
| 65 | private university in this state that receives state funds must |
| 66 | be informed prior to the ownership or purchase of life insurance |
| 67 | on the individual insured by the approved trust, partnership, |
| 68 | limited liability company, or similar entity, of the minimum |
| 69 | percentage or amount of the proceeds of the life insurance |
| 70 | policy that is reasonably anticipated to be ultimately paid to |
| 71 | the designated organization. |
| 72 | (h) The individual insured must provide an affidavit |
| 73 | stating that neither the individual insured, any relative of the |
| 74 | individual insured as defined in s. 112.312(21), nor any entity |
| 75 | controlled by the individual insured or relative, other than a |
| 76 | public or private university in this state that receives state |
| 77 | funds, received any monetary remuneration in consideration for |
| 78 | the individual insured's consent to purchase the life insurance |
| 79 | policy, except third-party expenses incurred in connection with |
| 80 | the grant of such consent. |
| 81 | (4) Transactions involving the procurement or funding of |
| 82 | the procurement of a life insurance policy or annuity contract |
| 83 | pursuant to subsection (3) are prohibited without the prior |
| 84 | approval of the Department of Financial Services in consultation |
| 85 | with the Office of Financial Regulation and Office of Insurance |
| 86 | Regulation which approval shall only be provided upon a |
| 87 | determination that the planned transaction meets the |
| 88 | requirements of subsection (3), is fiscally prudent and is |
| 89 | determined to be in the best interest of the citizens of this |
| 90 | state. Upon approval, a trust, partnership, limited liability |
| 91 | company, or similar entity that meets the requirements of |
| 92 | subsection (3) has an insurable interest in the life of the |
| 93 | individual insured. |
| 94 | (5) With respect to the designated trust, partnership, |
| 95 | limited liability company, or similar entity described in |
| 96 | subsection (3), except in the case of a material default of, or |
| 97 | commencement of a delinquency proceeding against, the life |
| 98 | insurer or annuity company, or the life insurer or annuity |
| 99 | company exercising its right to contest the life insurance |
| 100 | policy or annuity contract: |
| 101 | (a) The life insurance policies procured or caused to be |
| 102 | procured by such entity may not be assigned or transferred by |
| 103 | such entity; |
| 104 | (b) The ownership or beneficiary designation in favor of |
| 105 | such entity of the life insurance policies procured or caused to |
| 106 | be procured by such entity may not be changed; or |
| 107 | (c) A policy loan under the life insurance policies |
| 108 | procured or caused to be procured by such entity may not be |
| 109 | taken out by such entity; |
| 110 |
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| 111 | unless such entity applies for and obtains a license pursuant to |
| 112 | the provisions of s. 626.9912 prior to such transfer or |
| 113 | assignment of ownership, change in beneficiary, or policy loan. |
| 114 | All transactions under s. 626.9912 are subject to chapter 517. |
| 115 |
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| 116 | ================= T I T L E A M E N D M E N T ================= |
| 117 | On page 3, between lines 10 and 11, insert: |
| 118 | amending s. 627.404, F.S.; authorizing certain entities to own |
| 119 | or purchase life insurance on an insured under certain |
| 120 | circumstances; providing requirements; providing limitations; |