HB 0105

CS

CHAMBER ACTION

1	The Insurance Committee recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to life insurance and annuity contracts;
7	amending s. 624.402, F.S.; providing that a certificate of
8	authority is not required of insurers domiciled outside
9	the United States for certain life insurance policies or
10	annuity contracts covering only persons who are not
11	residents of the United States and are not nonresidents
12	illegally residing in the United States; providing
13	criteria, requirements, and limitations; requiring the
14	insurer to disclose certain information; providing for the
15	Office of Insurance Regulation to determine when the
16	insurer is no longer eligible for the exemption; providing
17	an exemption from certain taxes; requiring life insurance
18	applications and policies and annuity contracts to provide
19	certain disclosure statements; specifying application of
20	certain provisions to single-premium life insurance
21	policies and single-premium annuity contracts issued to
22	certain nonresidents; providing an effective date.
23
24	Be It Enacted by the Legislature of the State of Florida:
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26	Section 1.  Subsection (8) is added to section 624.402,
27	Florida Statutes, to read:
28	624.402  Exceptions, certificate of authority required.--A
29	certificate of authority shall not be required of an insurer
30	with respect to:
31	(8)(a)  Life insurance policies or annuity contracts issued
32	by an insurer domiciled outside the United States covering only
33	persons who, at the time of issuance, are not residents of the
34	United States and are not nonresidents illegally residing in the
35	United States, provided:
36	1.  The insurer must currently be an authorized insurer in
37	its country of domicile as to the kind or kinds of insurance
38	proposed to be offered and must have been such an insurer for
39	not fewer than the immediately preceding 3 years, or must be the
40	wholly owned subsidiary of such authorized insurer or must be
41	the wholly owned subsidiary of an already eligible authorized
42	insurer as to the kind or kinds of insurance proposed for a
43	period of not fewer than the immediately preceding 3 years.
44	However, the office may waive the 3-year requirement if the
45	insurer has operated successfully for a period of at least the
46	immediately preceding year and has capital and surplus of not
47	less than $25 million.
48	2.  Before the office may grant eligibility, the requesting
49	insurer shall furnish the office with a duly authenticated copy
50	of its current annual financial statement, in English, and with
51	all monetary values therein expressed in United States dollars,
52	at an exchange rate then current and shown in the statement, in
53	the case of statements originally made in the currencies of
54	other countries, and with such additional information relative
55	to the insurer as the office may request.
56	3.  The insurer must have and maintain surplus as to
57	policyholders of not less than $15 million. Any such surplus as
58	to policyholders shall be represented by investments consisting
59	of eligible investments for like funds of like domestic insurers
60	under part II of chapter 625; however, any such surplus as to
61	policyholders may be represented by investments permitted by the
62	domestic regulator of such alien insurance company if such
63	investments are substantially similar in terms of quality,
64	liquidity, and security to eligible investments for like funds
65	of like domestic insurers under part II of chapter 625.
66	4.  The insurer must be of good reputation as to the
67	providing of service to its policyholders and the payment of
68	losses and claims.
69	5.  To maintain eligibility, the insurer shall furnish the
70	office within the time period specified in s. 624.424(1)(a) a
71	duly authenticated copy of its current annual and quarterly
72	financial statements, in English, and with all monetary values
73	therein expressed in United States dollars, at an exchange rate
74	then current and shown in the statement, in the case of
75	statements originally made in the currencies of other countries,
76	and with such additional information relative to the insurer as
77	the office may request.
78	6.  An insurer receiving eligibility under this subsection
79	shall agree to make its books and records pertaining to its
80	operations in this state available for inspection during normal
81	business hours upon request of the office.
82	7.  The insurer shall provide to the applicant for the
83	policy or contract a copy of the most recent quarterly financial
84	statements of the insurer providing, in clear and conspicuous
85	language:
86	a.  The date of organization of the insurer.
87	b.  The identity of and rating assigned by each recognized
88	insurance company rating organization that has rated the insurer
89	or, if applicable, that the insurer is unrated.
90	c.  That the insurer does not hold a certificate of
91	authority issued in this state and that the office does not
92	exercise regulatory oversight over the insurer.
93	d.  The identity and address of the regulatory authority
94	exercising oversight of the insurer.
95
96	This paragraph does not impose upon the office any duty or
97	responsibility to determine the actual financial condition or
98	claims practices of any unauthorized insurer, and the status of
99	eligibility, if granted by the office, indicates only that the
100	insurer appears to be financially sound and to have satisfactory
101	claims practices and that the office has no credible evidence to
102	the contrary.
103	(b)  If at any time the office has reason to believe that
104	an insurer issuing policies or contracts pursuant to this
105	subsection is insolvent or is in unsound financial condition,
106	does not make reasonable prompt payment of benefits, or is no
107	longer eligible under the conditions specified in this
108	subsection, the office may conduct an examination or
109	investigation in accordance with s. 624.316, s. 624.3161, or s.
110	624.320 and, if the findings of such examination or
111	investigation warrant, may withdraw the eligibility of the
112	insurer to issue policies or contracts pursuant to this
113	subsection without having a certificate of authority issued by
114	the office.
115	(c)  This subsection does not provide an exception to the
116	agent licensure requirements of chapter 626. Any insurer issuing
117	policies or contracts pursuant to this subsection shall appoint
118	the agents that the insurer uses to sell such policies or
119	contracts as provided in chapter 626.
120	(d)  An insurer issuing policies or contracts pursuant to
121	this subsection is subject to part IX of chapter 626, Unfair
122	Insurance Trade Practices, and the office may take such actions
123	against the insurer for a violation as are provided in that
124	part.
125	(e)  Policies and contracts issued pursuant to this
126	subsection are not subject to the premium tax specified in s.
127	624.509.
128	(f)  Applications for life insurance coverage offered under
129	this subsection must contain, in contrasting color and not less
130	than 12-point type, the following statement on the same page as
131	the applicant's signature:
132
133	This policy is primarily governed by the laws of a foreign
134	country. As a result, all of the rating and underwriting
135	laws applicable to policies filed in this state do not
136	apply to this coverage, which may result in your premiums
137	being higher than would be permissible under a Florida-
138	approved policy. Any purchase of individual life insurance
139	should be considered carefully, as future medical
140	conditions may make it impossible to qualify for another
141	individual life policy. If the insurer issuing your policy
142	becomes insolvent, this policy is not covered by the
143	Florida Life and Health Insurance Guaranty Association. For
144	information concerning individual life coverage under a
145	Florida-approved policy, consult your agent or the Florida
146	Department of Financial Services.
147
148	(g)  All life insurance policies and annuity contracts
149	issued pursuant to this subsection must contain on the first
150	page of the policy or contract, in contrasting color and not
151	less than 10-point type, the following statement:
152
153	The benefits of the policy providing your coverage are
154	governed primarily by the law of a country other than the
155	United States.
156
157	(h)  All single-premium life insurance policies and single-
158	premium annuity contracts issued to persons who are not
159	residents of the United States and are not nonresidents
160	illegally residing in the United States pursuant to this
161	subsection shall be subject to the provisions of chapter 896.
162	Section 2.  This act shall take effect July 1, 2005.

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