Amendment

Bill No. 2268

Amendment No. 226181

CHAMBER ACTION
Senate		House
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1	Representative Stargel offered the following:
2
3	Amendment to Amendment (832931) (with title amendment)
4	Between lines 1085 and 1086, insert:
5	Section 41.  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 42.  Paragraphs (a), (e), and (f) of subsection (5)
16	are amended, paragraphs (k) and (l) are added to subsection (13)
17	of section 625.121, Florida Statutes, are amended to read:
18	625.121  Standard Valuation Law; life insurance.--
19	(5)  MINIMUM STANDARD FOR VALUATION OF POLICIES AND
20	CONTRACTS ISSUED ON OR AFTER OPERATIVE DATE OF STANDARD
21	NONFORFEITURE LAW.--Except as otherwise provided in paragraph
22	(h) and subsections (6), (11), and (14), the minimum standard
23	for the valuation of all such policies and contracts issued on
24	or after the operative date of s. 627.476 (Standard
25	Nonforfeiture Law for Life Insurance) shall be the
26	commissioners' reserve valuation method defined in subsections
27	(7), (11), and (14); 5 percent interest for group annuity and
28	pure endowment contracts and 3.5 percent interest for all other
29	such policies and contracts, or in the case of life insurance
30	policies and contracts, other than annuity and pure endowment
31	contracts, issued on or after July 1, 1973, 4 percent interest
32	for such policies issued prior to October 1, 1979, and 4.5
33	percent interest for such policies issued on or after October 1,
34	1979; and the following tables:
35	(a)  For all ordinary policies of life insurance issued on
36	the standard basis, excluding any disability and accidental
37	death benefits in such policies:
38	1.  For policies issued prior to the operative date of s.
39	627.476(9), the commissioners' 1958 Standard Ordinary Mortality
40	Table; except that, for any category of such policies issued on
41	female risks, modified net premiums and present values, referred
42	to in subsection (7), may be calculated according to an age not
43	more than 6 years younger than the actual age of the insured.;
44	and
45	2.  For policies issued on or after the operative date of
46	s. 627.476(9), the commissioners' 1980 Standard Ordinary
47	Mortality Table or, at the election of the insurer for any one
48	or more specified plans of life insurance, the commissioners'
49	1980 Standard Ordinary Mortality Table with Ten-Year Select
50	Mortality Factors.
51	3.  For policies issued on or after July 1, 2004, ordinary
52	mortality tables, adopted after 1980 by the National Association
53	of Insurance Commissioners, adopted by rule by the Commission
54	for use in determining the minimum standard of valuation for
55	such policies.
56	(e)  For total and permanent disability benefits in or
57	supplementary to ordinary policies or contracts:
58	1.  For policies or contracts issued on or after January 1,
59	1966, the tables of period 2 disablement rates and the 1930 to
60	1950 termination rates of the 1952 disability study of the
61	Society of Actuaries, with due regard to the type of benefit;
62	2.  For policies or contracts issued on or after January 1,
63	1961, and prior to January 1, 1966, either those tables or, at
64	the option of the insurer, the class three disability table
65	(1926).; and
66	3.  For policies issued prior to January 1, 1961, the class
67	three disability table (1926).
68	4.  For policies or contracts issued on or after July 1,
69	2004, tables of disablement rates and termination rates adopted
70	after 1980 by the National Association of Insurance
71	Commissioners, adopted by rule by the commission for use in
72	determining the minimum standard of valuation for those policies
73	or contracts.
74
75	Any such table for active lives shall be combined with a
76	mortality table permitted for calculating the reserves for life
77	insurance policies.
78	(f)  For accidental death benefits in or supplementary to
79	policies:
80	1.  For policies issued on or after January 1, 1966, the
81	1959 Accidental Death Benefits Table.;
82	2.  For policies issued on or after January 1, 1961, and
83	prior to January 1, 1966, either that table or, at the option of
84	the insurer, the Intercompany Double Indemnity Mortality Table.;
85	and
86	3.  For policies issued prior to January 1, 1961, the
87	Intercompany Double Indemnity Mortality Table.
88	4.  For policies issued on or after July 1, 2004, tables of
89	accidental death benefits adopted after 1980 by the National
90	Association of Insurance Commissioners, adopted by rule by the
91	commission for use in determining the minimum standard of
92	valuation for those policies.
93
94	Either table shall be combined with a mortality table permitted
95	for calculating the reserves for life insurance policies.
96	(k)  For individual annuity and pure endowment contracts
97	issued on or after July 1, 2004, excluding any disability and
98	accidental death benefits purchased under those contracts,
99	individual annuity mortality tables adopted after 1980 by the
100	National Association of Insurance Commissioners, adopted by rule
101	by the commission for use in determining the minimum standard of
102	valuation for those contracts.
103	(l)  For all annuities and pure endowments purchased on or
104	after July 1, 2004, under group annuity and pure endowment
105	contracts, excluding any disability and accidental death
106	benefits purchased under those contracts, group annuity
107	mortality tables adopted after 1980 by the National Association
108	of Insurance Commissioners, adopted by rule by the commission
109	for use in determining the minimum standard of valuation for
110	those contracts.
111	(13)  APPLICABILITY TO CREDIT LIFE AND DISABILITY INSURANCE
112	POLICIES.--
113	(a)  For policies issued prior to January 1, 2004:
114	1.  The minimum reserve for single-premium credit
115	disability insurance, monthly premium credit life insurance, and
116	monthly premium credit disability insurance shall be the
117	unearned gross premium.
118	2.  As to single-premium credit life insurance policies,
119	the insurer shall establish and maintain reserves which are not
120	less than the value, at the valuation date, of the risk for the
121	unexpired portion of the period for which the premium has been
122	paid as computed on the basis of the commissioners' 1980
123	Standard Ordinary Mortality Table plus 3.5 percent interest. At
124	the discretion of the Office, the insurer may make a reasonable
125	assumption as to the ages at which net premiums are to be
126	determined. In lieu of the foregoing basis, reserves based upon
127	unearned gross premiums may be used at the option of the
128	insurer.
129	(b)  For policies issued on or after January 1, 2004:
130	1.  The minimum reserve for single-premium credit
131	disability insurance shall be the unearned gross premium or
132	shall be based upon a morbidity table that is adopted by the
133	National Association of Insurance Commissioners and is specified
134	in a rule the Commission shall adopt pursuant to s. 625.121(14).
135	2.  The minimum reserve for monthly premium credit
136	disability insurance shall be the unearned gross premium.
137	3.  The minimum reserve for monthly premium credit life
138	insurance shall be the unearned gross premium.
139	4.  As to single-premium credit life insurance policies,
140	the insurer shall establish and maintain reserves which are not
141	less than the value, at the valuation date, of the risk for the
142	unexpired portion of the period for which the premium has been
143	paid as computed on the basis of the commissioners' 1980
144	Standard Ordinary Mortality Table or any ordinary mortality
145	table, adopted after 1980 by the National Association of
146	Insurance Commissioners, that is approved by rule adopted by the
147	Commission for use in determining the minimum standard of
148	valuation for such policies; and an interest rate determined in
149	accordance with s. 625.121(6). At the discretion of the Office,
150	the insurer may make a reasonable assumption as to the ages at
151	which net premiums are to be determined. In lieu of the
152	foregoing basis, reserves based upon unearned gross premiums may
153	be used at the option of the insurer. This section does not
154	apply as to those credit life insurance policies for which
155	reserves are computed and maintained as required under s.
156	625.131.
157	Section 43.  Paragraph (h) of subsection (9) of section
158	627.476, Florida Statutes, is amended to read:
159	627.476  Standard Nonforfeiture Law for Life Insurance.--
160	(9)  CALCULATION OF ADJUSTED PREMIUMS AND PRESENT VALUES
161	FOR POLICIES ISSUED AFTER OPERATIVE DATE OF THIS SUBSECTION.--
162	(h)  All adjusted premiums and present values referred to
163	in this section shall for all policies of ordinary insurance be
164	calculated on the basis of the Commissioners' 1980 Standard
165	Ordinary Mortality Table or, at the election of the insurer for
166	any one or more specified plans of life insurance, the
167	Commissioners' 1980 Standard Ordinary Mortality Table with Ten-
168	Year Select Mortality Factors; shall for all policies of
169	industrial insurance be calculated on the basis of the
170	Commissioners' 1961 Standard Industrial Mortality Table; and
171	shall for all policies issued in a particular calendar year be
172	calculated on the basis of a rate of interest not exceeding the
173	nonforfeiture interest rate as defined in this subsection for
174	policies issued in that calendar year. However:
175	1.  At the option of the insurer, calculations for all
176	policies issued in a particular calendar year may be made on the
177	basis of a rate of interest not exceeding the nonforfeiture
178	interest rate, as defined in this subsection, for policies
179	issued in the immediately preceding calendar year.
180	2.  Under any paid-up nonforfeiture benefit, including any
181	paid-up dividend additions, any cash surrender value available,
182	whether or not required by subsection (2), shall be calculated
183	on the basis of the mortality table and rate of interest used in
184	determining the amount of such paid-up nonforfeiture benefit and
185	paid-up dividend additions, if any.
186	3.  An insurer may calculate the amount of any guaranteed
187	paid-up nonforfeiture benefit, including any paid-up additions
188	under the policy, on the basis of an interest rate no lower than
189	that specified in the policy for calculating cash surrender
190	values.
191	4.  In calculating the present value of any paid-up term
192	insurance with accompanying pure endowment, if any, offered as a
193	nonforfeiture benefit, the rates of mortality assumed may be not
194	more than those shown in the Commissioners' 1980 Extended Term
195	Insurance Table for policies of ordinary insurance and not more
196	than the Commissioners' 1961 Industrial Extended Term Insurance
197	Table for policies of industrial insurance.
198	5.  In lieu of the mortality tables specified in this
199	section, at the option of the insurance company and subject to
200	rules adopted by the commission, the insurance company may
201	substitute:
202	a.  The 1958 CSO or CET Smoker and Nonsmoker Mortality
203	Tables, whichever is applicable, for policies issued on or after
204	the operative date of this subsection and before January 1,
205	1989;
206	b.  The 1980 CSO or CET Smoker and Nonsmoker Mortality
207	Tables, whichever is applicable, for policies issued on or after
208	the operative date of this subsection;
209	c.  A mortality table that is a blend of the sex-distinct
210	1980 CSO or CET mortality table standard, whichever is
211	applicable, or a mortality table that is a blend of the sex-
212	distinct 1980 CSO or CET smoker and nonsmoker mortality table
213	standards, whichever is applicable, for policies that are
214	subject to the United States Supreme Court decision in Arizona
215	Governing Committee v. Norris to prevent unfair discrimination
216	in employment situations.
217	6.  Ordinary mortality tables, adopted after 1980 by
218	the National Association of Insurance Commissioners, adopted by
219	rule by the commission for use in determining the minimum
220	nonforfeiture standard may be substituted for the Commissioners'
221	1980 Standard Ordinary Mortality Table with or without Ten-Year
222	Select Mortality Factors or for the Commissioners' 1980 Extended
223	Term Insurance Table.
224	7.6.  For insurance issued on a substandard basis, the
225	calculation of any such adjusted premiums and present values may
226	be based on appropriate modifications of the aforementioned
227	tables.
228	Section 44.  Section 625.131, Florida Statutes, is
229	repealed.
230	================ T I T L E  A M E N D M E N T =============
231	Remove line(s) 1174 and insert:
232	drug test under certain circumstances; amending s.
233	625.081, F.S.; excepting credit disability insurance from
234	certain health insurance reserve requirements; providing
235	an exception; amending s. 625.121, F.S.; providing
236	additional minimum standards for valuation of insurance
237	policies and contracts; providing reserve requirements for
238	credit life insurance; amending 627.476, F.S.; providing
239	authority to the Financial Services Commission to adopt an
240	alternative mortality table for valuation of life
241	insurance policies; repealing s. 625.131, F.S.; relating
242	to special reserve bases for credit life and disability
243	policies; amending s. 440.05,

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