Amendment

Bill No. 0557

Amendment No. 114235

CHAMBER ACTION
Senate		House
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1	Representative Rivera offered the following:
2
3	Amendment (with title amendments)
4	Between lines 748 and 749, insert:
5	Section 11.  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 s.
14	170(c)(1), (2), or (3) of the Internal Revenue Code of 1986, as
15	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 s.
24	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 must,
56	at the time of the acquisition of the life insurance policies by
57	the approved trust, partnership, limited liability company, or
58	similar entity, reasonably anticipate receiving not less than 90
59	percent of the death benefit proceeds of each life insurance
60	policy on such individual insured after the return of the amount
61	invested and yield accrued and payable to the qualified
62	institutional buyers in accordance with the securities offering
63	or other disclosure materials. The reasonably anticipated
64	minimum percentage or amount of the death benefit proceeds of
65	the life insurance policies to be ultimately received by the
66	designated organization must be disclosed in the relevant
67	securities offering or other disclosure materials used in any
68	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
93	the life insurance application, the designated organization that
94	meets the requirements of s. 501(c)(3) of the Internal Revenue
95	Code of 1986, as amended, or organization to which a charitable
96	contribution could be made under s. 170(c)(1), (2), or (3) of
97	the Internal Revenue Code of 1986, as amended, must have been in
98	existence for 3 years and must have assets in excess of $5
99	million, or the individual insured must be an accredited
100	investor as defined by Rule 501 of Regulation D of the Federal
101	Securities Act of 1933.
102	(4)  With respect to the designated trust, partnership,
103	limited liability company, or similar entity described in
104	subsection (3), except in the case of a material default or
105	commencement of a delinquency proceeding of the life insurer or
106	annuity company or in the case of the life insurer or annuity
107	company exercising its right to contest the life insurance
108	policy or annuity contract:
109	(a)  The life insurance policies procured or caused to be
110	procured by such entity may not be assigned or transferred by
111	such entity;
112	(b)  The ownership or beneficiary designation in favor of
113	such entity of the life insurance policies procured or caused to
114	be procured by such entity may not be changed; or
115	(c)  A policy loan under the life insurance policies
116	procured or caused to be procured by such entity may not be
117	taken out by such entity,
118
119	unless such entity applies for and obtains a license pursuant to
120	the provisions of s. 626.9912 prior to such transfer or
121	assignment of ownership, change in beneficiary, or policy loan.
122	(5)  A  trust, partnership, limited liability company, or
123	similar entity that meets the requirements of subsection (3) has
124	an insurable interest in the life of the individual insured.
125
126	================ T I T L E  A M E N D M E N T =============
127	Remove line 51, and insert:
128	future repeal; amending s. 627.404, F.S.; authorizing certain
129	entities to purchase or own life insurance policies on insureds
130	under certain circumstances; providing criteria and
131	requirements; providing limitations; providing an exception;
132	amending s. 627.4091, F.S.; providing

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