HB 1437

1	A bill to be entitled
2	An act relating to viatical settlements; amending s.
3	517.021, F.S.; revising and providing definitions;
4	creating s. 517.072, F.S.; specifying nonapplication of
5	certain exemptions to viatical settlement investments;
6	specifying the offering of a viatical settlement
7	investment as not an exempt transaction under certain
8	provisions of law; amending s. 517.081, F.S.; authorizing
9	the Financial Services Commission to adopt additional
10	rules relating to securities registration; authorizing the
11	commission to adopt rules establishing requirements and
12	standards for disclosures and records relating to viatical
13	settlement investments; creating s. 517.1215, F.S.;
14	requiring the commission to adopt rules specifying
15	requirements for certain investment advisors; requiring
16	the commission to establish by rule rules of conduct and
17	prohibited business practices for investment advisers and
18	associated persons; providing requirements; creating s.
19	517.1217, F.S.; authorizing the commission to establish by
20	rule rules of conduct and prohibited business practices
21	for dealers and associated persons; providing
22	requirements; amending s. 624.501, F.S.; including agents
23	making an appointment under certain life insurance agent
24	fee provisions; amending ss. 626.015, 626.112, 626.207,
25	and 626.331, F.S., to conform; amending s. 626.611, F.S.;
26	providing an additional ground for compulsory refusal,
27	suspension, or revocation of certain licenses or
28	appointments for transactions relating to viatical
29	settlement contracts; amending s. 626.777, F.S., to
30	conform; amending s. 626.7845, F.S.; prohibiting certain
31	activities by a person relating to viatical settlement
32	contracts unless as a licensed life agent; amending s.
33	626.9911, F.S.; revising definitions; amending s.
34	626.9912, F.S., to conform; amending s. 626.9913, F.S.;
35	specifying additional requirements for annual statements
36	by viatical settlement provider licensees; providing an
37	alternative bond provision for certain viatical settlement
38	providers for a certain time period; prohibiting certain
39	persons from levying upon certain assets or securities
40	under certain circumstances; requiring annual statements
41	to contain certain information; amending s. 626.9914,
42	F.S.; including the authority to deny a license among the
43	adverse actions the Office of Insurance Regulation may
44	take against a viatical settlement provider for certain
45	actions; amending s. 626.9916, F.S.; revising licensure
46	requirements for viatical settlement brokers; providing
47	for self-appointment; providing for transfers of
48	appointments; providing for termination of licenses;
49	specifying a fiduciary duty of viatical settlement
50	brokers; prohibiting dividing or sharing compensation
51	received by a life agent for certain activities under
52	certain circumstances; amending ss. 626.9919, 626.992, and
53	626.9921, F.S., to conform; amending s. 626.9922, F.S.;
54	specifying office jurisdiction over certain viatical
55	settlement purchase agreements; authorizing the office to
56	refer certain cases to the United States Securities and
57	Exchange Commission for administrative action under
58	certain circumstances; providing application to life
59	expectancy providers; amending ss. 626.99245, 626.9925,
60	626.9926, and 626.9927, F.S., to conform; amending s.
61	626.99275, F.S.; revising a prohibited practice to apply
62	to issuing life expectancies under certain circumstances;
63	providing a criminal penalty; amending s. 626.99278, F.S.;
64	requiring an anti-fraud plan to include a life expectancy
65	accuracy review process; amending ss. 626.9928 and
66	626.99285, F.S., to conform; amending s. 626.99295, F.S.;
67	revising application of a grace period for certain
68	viatical settlement purchase agreements; repealing s.
69	626.9917, F.S., relating to denial, suspension,
70	revocation, or nonrenewal of viatical settlement broker
71	licenses; repealing s. 626.9918, F.S., relating to effect
72	of suspension or revocation of viatical settlement broker
73	licenses; repealing s. 626.99235, F.S., relating to
74	disclosures to viatical settlement purchasers; repealing
75	s. 626.99236, F.S., relating to further disclosures to
76	viatical settlement purchasers; repealing s. 626.99277,
77	F.S., relating to false representations; providing an
78	effective date.
79
80	Be It Enacted by the Legislature of the State of Florida:
81
82	Section 1.  Subsections (19) and (21) of section 517.021,
83	Florida Statutes, are renumbered as subsections (20) and (22),
84	respectively, present subsection (20) is renumbered as
85	subsection (21) and amended, and subsections (19) and (23) are
86	added to said section, to read:
87	517.021  Definitions.--When used in this chapter, unless
88	the context otherwise indicates, the following terms have the
89	following respective meanings:
90	(19)  "Qualified institutional buyer" means any qualified
91	institutional buyer, as defined in United States Securities and
92	Exchange Commission Rule 144A, 17 C.F.R. 230.144A(a), under the
93	Securities Act of 1933, as amended, or any foreign buyer that
94	satisfies the minimum financial requirements set forth in such
95	rule.
96	(21)(20)  "Security" includes any of the following:
97	(a)  A note.
98	(b)  A stock.
99	(c)  A treasury stock.
100	(d)  A bond.
101	(e)  A debenture.
102	(f)  An evidence of indebtedness.
103	(g)  A certificate of deposit.
104	(h)  A certificate of deposit for a security.
105	(i)  A certificate of interest or participation.
106	(j)  A whiskey warehouse receipt or other commodity
107	warehouse receipt.
108	(k)  A certificate of interest in a profit-sharing
109	agreement or the right to participate therein.
110	(l)  A certificate of interest in an oil, gas, petroleum,
111	mineral, or mining title or lease or the right to participate
112	therein.
113	(m)  A collateral trust certificate.
114	(n)  A reorganization certificate.
115	(o)  A preorganization subscription.
116	(p)  Any transferable share.
117	(q)  An investment contract.
118	(r)  A beneficial interest in title to property, profits,
119	or earnings.
120	(s)  An interest in or under a profit-sharing or
121	participation agreement or scheme.
122	(t)  Any option contract which entitles the holder to
123	purchase or sell a given amount of the underlying security at a
124	fixed price within a specified period of time.
125	(u)  Any other instrument commonly known as a security,
126	including an interim or temporary bond, debenture, note, or
127	certificate.
128	(v)  Any receipt for a security, or for subscription to a
129	security, or any right to subscribe to or purchase any security.
130	(w)  A viatical settlement investment.
131	(23)  "Viatical settlement investment" means an agreement
132	for the purchase, sale, assignment, transfer, devise, or bequest
133	of all or any portion of a legal or equitable interest in a
134	viaticated policy as defined in chapter 626. The term does not
135	include:
136	(a)  The transfer or assignment of an interest in a
137	previously viaticated policy from a natural person who transfers
138	or assigns no more than one such interest in 1 calendar year.
139	(b)  The provision of stop-loss coverage to a viatical
140	settlement provider, financing entity, or related provider
141	trust, as those terms are defined in s. 626.9911, by an
142	authorized or eligible insurer.
143	(c)  The transfer or assignment of a viaticated policy from
144	a licensed viatical settlement provider to another licensed
145	viatical settlement provider, a related provider trust, or a
146	financing entity, as those terms are defined in s. 626.9911, or
147	to a contingency insurer provided that such transfer or
148	assignment is not the direct or indirect promotion of any scheme
149	or enterprise with the intent of violating or evading any
150	provision of this chapter.
151	(d)  The transfer or assignment of a viaticated policy to a
152	bank, trust company, savings institution, insurance company,
153	dealer, investment company as defined in the Investment Company
154	Act of 1940, pension or profit-sharing trust, or qualified
155	institutional buyer as defined in United States Securities and
156	Exchange Commission Rule 144A, 17 C.F.R. 230.144A(a), provided
157	such transfer or assignment is not for the direct or indirect
158	promotion of any scheme or enterprise with the intent of
159	violating or evading any provision of this chapter.
160	(e)  The transfer or assignment of a viaticated policy by a
161	conservator of a viatical settlement provider appointed by a
162	court of competent jurisdiction who transfers or assigns
163	ownership of viaticated policies pursuant to that court's order.
164	Section 2.  Section 517.072, Florida Statutes, is created
165	to read:
166	517.072  Viatical settlement investments.--The exemptions
167	provided for by ss. 517.051(6), (8), and (10) do not apply to a
168	viatical settlement investment. The offering of a viatical
169	settlement investment is not an exempt transaction under s.
170	517.061(2), (3), (8), (11), and (18), regardless of whether the
171	offering otherwise complies with the conditions of that section,
172	unless such offering is to a qualified institutional buyer.
173	Section 3.  Subsection (7) of section 517.081, Florida
174	Statutes, is amended, and subsection (8) is added to said
175	section, to read:
176	517.081  Registration procedure.--
177	(7)  If upon examination of any application the office
178	shall find that the sale of the security referred to therein
179	would not be fraudulent and would not work or tend to work a
180	fraud upon the purchaser, that the terms of the sale of such
181	securities would be fair, just, and equitable, and that the
182	enterprise or business of the issuer is not based upon unsound
183	business principles, it shall record the registration of such
184	security in the register of securities; and thereupon such
185	security so registered may be sold by any registered dealer,
186	subject, however, to the further order of the office. In order
187	to determine if an offering is fair, just, and equitable, the
188	commission may by rule establish requirements and standards for
189	the filing, content, and circulation of any preliminary, final,
190	or amended prospectus and other sales literature and may by rule
191	establish merit qualification criteria relating to the issuance
192	of equity securities, debt securities, insurance company
193	securities, real estate investment trusts, and other traditional
194	and nontraditional investments, including, but not limited to,
195	oil and gas investments. The criteria may include such elements
196	as the promoter's equity investment ratio, the financial
197	condition of the issuer, the voting rights of shareholders, the
198	grant of options or warrants to underwriters and others, loans
199	and other affiliated transaction, the use or refund of proceeds
200	of the offering, and such other relevant criteria as the office
201	in its judgment may deem necessary to such determination.
202	(8)  The commission may by rule establish requirements and
203	standards for:
204	(a)  Disclosures to purchasers of viatical settlement
205	investments.
206	(b)  Recordkeeping requirements for sellers of viatical
207	settlement investments.
208	Section 4.  Section 517.1215, Florida Statutes, is created
209	to read:
210	517.1215  Requirements, rules of conduct, and prohibited
211	business practices for investment advisors and their associated
212	persons.--
213	(1)  The commission shall specify by rule requirements for
214	investment advisors deemed to have custody of client funds which
215	concern the following:
216	(a)  Notification of custody of, maintenance of, and
217	safeguards for client funds.
218	(b)  Communications with clients and independent
219	representatives.
220	(c)  Requirements for investment advisers who have custody
221	of pooled investments.
222	(d)  Exceptions to the custody requirements.
223
224	In adopting the rules, the commission shall consider the rules
225	and regulations of the federal regulatory authority and the
226	North American Securities Administrators Association.
227	(2)  The commission shall by rule establish rules of
228	conduct and prohibited business practices for investment
229	advisers and their associated persons. In adopting the rules,
230	the commission shall consider general industry standards as
231	expressed in the rules and regulations of the various federal
232	and self-regulatory agencies and regulatory associations,
233	including, but not limited to, the United States Securities and
234	Exchange Commission, the National Association of Securities
235	Dealers, and the North American Securities Administrators
236	Association.
237	Section 5.  Section 517.1217, Florida Statutes, is created
238	to read:
239	517.1217  Rules of conduct and prohibited business
240	practices for dealers and their associated persons.--The
241	commission by rule may establish rules of conduct and prohibited
242	business practices for dealers and their associated persons. In
243	adopting the rules, the commission shall consider general
244	industry standards as expressed in the rules and regulations of
245	the various federal and self-regulatory agencies and regulatory
246	associations, including, but not limited to, the United States
247	Securities and Exchange Commission, the National Association of
248	Securities Dealers, and the North American Securities
249	Administrators Association.
250	Section 6.  Paragraph (a) of subsection (7) of section
251	624.501, Florida Statutes, is amended to read:
252	624.501  Filing, license, appointment, and miscellaneous
253	fees.--The department, commission, or office, as appropriate,
254	shall collect in advance, and persons so served shall pay to it
255	in advance, fees, licenses, and miscellaneous charges as
256	follows:
257	(7)  Life insurance agents.
258	(a)  Agent's original appointment and biennial renewal or
259	continuation thereof, each insurer or agent making an
260	appointment:
261	Appointment.................................$42.00
262	State tax....................................12.00
263	County tax....................................6.00
264	Total...........................................$60.00
265	Section 7.  Subsection (10) of section 626.015, Florida
266	Statutes, is amended to read:
267	626.015  Definitions.--As used in this part:
268	(10)  "Life agent" means an individual representing an
269	insurer as to life insurance and annuity contracts, or acting as
270	a viatical settlement broker as defined in s. 626.9911,
271	including agents appointed to transact life insurance, fixed-
272	dollar annuity contracts, or variable contracts by the same
273	insurer.
274	Section 8.  Paragraph (b) of subsection (1) of section
275	626.112, Florida Statutes, is amended to read:
276	626.112  License and appointment required; agents, customer
277	representatives, adjusters, insurance agencies, service
278	representatives, managing general agents.--
279	(1)
280	(b)  Except as provided in subsection (6) or in applicable
281	department rules, and in addition to other conduct described in
282	this chapter with respect to particular types of agents, a
283	license as an insurance agent, service representative, customer
284	representative, or limited customer representative is required
285	in order to engage in the solicitation of insurance. For
286	purposes of this requirement, as applicable to any of the
287	license types described in this section, the solicitation of
288	insurance is the attempt to persuade any person to purchase an
289	insurance product by:
290	1.  Describing the benefits or terms of insurance coverage,
291	including premiums or rates of return;
292	2.  Distributing an invitation to contract to prospective
293	purchasers;
294	3.  Making general or specific recommendations as to
295	insurance products;
296	4.  Completing orders or applications for insurance
297	products; or
298	5.  Comparing insurance products, advising as to insurance
299	matters, or interpreting policies or coverages; or
300	6.  Offering or attempting to negotiate on behalf of
301	another person a viatical settlement contract as defined in s.
302	626.9911.
303
304	However, an employee leasing company licensed pursuant to
305	chapter 468 which is seeking to enter into a contract with an
306	employer that identifies products and services offered to
307	employees may deliver proposals for the purchase of employee
308	leasing services to prospective clients of the employee leasing
309	company setting forth the terms and conditions of doing
310	business; classify employees as permitted by s. 468.529; collect
311	information from prospective clients and other sources as
312	necessary to perform due diligence on the prospective client and
313	to prepare a proposal for services; provide and receive
314	enrollment forms, plans, and other documents; and discuss or
315	explain in general terms the conditions, limitations, options,
316	or exclusions of insurance benefit plans available to the client
317	or employees of the employee leasing company were the client to
318	contract with the employee leasing company. Any advertising
319	materials or other documents describing specific insurance
320	coverages must identify and be from a licensed insurer or its
321	licensed agent or a licensed and appointed agent employed by the
322	employee leasing company. The employee leasing company may not
323	advise or inform the prospective business client or individual
324	employees of specific coverage provisions, exclusions, or
325	limitations of particular plans. As to clients for which the
326	employee leasing company is providing services pursuant to s.
327	468.525(4), the employee leasing company may engage in
328	activities permitted by ss. 626.7315, 626.7845, and 626.8305,
329	subject to the restrictions specified in those sections. If a
330	prospective client requests more specific information concerning
331	the insurance provided by the employee leasing company, the
332	employee leasing company must refer the prospective business
333	client to the insurer or its licensed agent or to a licensed and
334	appointed agent employed by the employee leasing company.
335	Section 9.  Section 626.207, Florida Statutes, is amended
336	to read:
337	626.207  Department rulemaking authority; waiting periods
338	for applicants; penalties against licensees.--
339	(1)  The department shall adopt rules establishing specific
340	waiting periods for applicants to become eligible for licensure
341	following denial, suspension, or revocation pursuant to s.
342	626.611, s. 626.621, s. 626.8437, s. 626.844, s. 626.935, s.
343	626.9917, s. 634.181, s. 634.191, s. 634.320, s. 634.321, s.
344	634.422, s. 634.423, s. 642.041, or s. 642.043. The purpose of
345	the waiting periods is to provide sufficient time to demonstrate
346	reformation of character and rehabilitation. The waiting periods
347	shall vary based on the type of conduct and the length of time
348	since the conduct occurred and shall also be based on the
349	probability that the propensity to commit illegal conduct has
350	been overcome. The waiting periods may be adjusted based on
351	aggravating and mitigating factors established by rule and
352	consistent with this purpose.
353	(2)  The department shall adopt rules establishing specific
354	penalties against licensees for violations of s. 626.611, s.
355	626.621, s. 626.8437, s. 626.844, s. 626.935, s. 626.9917, s.
356	634.181, s. 634.191, s. 634.320, s. 634.321, s. 634.422, s.
357	634.423, s. 642.041, or s. 642.043. The purpose of the
358	revocation or suspension is to provide a sufficient penalty to
359	deter future violations of the Florida Insurance Code. The
360	imposition of a revocation or the length of suspension shall be
361	based on the type of conduct and the probability that the
362	propensity to commit further illegal conduct has been overcome
363	at the time of eligibility for relicensure. The revocation or
364	the length of suspension may be adjusted based on aggravating or
365	mitigating factors, established by rule and consistent with this
366	purpose.
367	Section 10.  Subsection (2) of section 626.331, Florida
368	Statutes, is amended to read:
369	626.331  Number of appointments permitted or required.--
370	(2)  An agent shall be required to have a separate
371	appointment as to each insurer by whom he or she is appointed as
372	an agent. An agent must appoint himself or herself before
373	performing the functions of a viatical settlement broker.
374	Section 11.  Subsection (17) is added to section 626.611,
375	Florida Statutes, to read:
376	626.611  Grounds for compulsory refusal, suspension, or
377	revocation of agent's, title agency's, adjuster's, customer
378	representative's, service representative's, or managing general
379	agent's license or appointment.--The department shall deny an
380	application for, suspend, revoke, or refuse to renew or continue
381	the license or appointment of any applicant, agent, title
382	agency, adjuster, customer representative, service
383	representative, or managing general agent, and it shall suspend
384	or revoke the eligibility to hold a license or appointment of
385	any such person, if it finds that as to the applicant, licensee,
386	or appointee any one or more of the following applicable grounds
387	exist:
388	(17)  In transactions related to viatical settlement
389	contracts as defined in s. 626.9911:
390	(a)  Commission of a fraudulent or dishonest act.
391	(b)  No longer meeting the requirements for initial
392	licensure.
393	(c)  Having received a fee, commission, or other valuable
394	consideration for his or her services with respect to viatical
395	settlements that involved unlicensed viatical settlement
396	providers or persons who offered or attempted to negotiate on
397	behalf of another person a viatical settlement contract as
398	defined in s. 626.9911 and who were not licensed life agents.
399	(d)  Dealing in bad faith with viators.
400	Section 12.  Section 626.777, Florida Statutes, is amended
401	to read:
402	626.777  Scope of this part.--This part applies only to
403	agents of life insurers, and to agents who are appointed by the
404	same insurer as to both life insurance and health insurance, and
405	agents who perform the functions of a viatical settlement broker
406	as defined in s. 626.9911.
407	Section 13.  Subsection (2) of section 626.7845, Florida
408	Statutes, is amended to read:
409	626.7845  Prohibition against unlicensed transaction of
410	life insurance.--
411	(2)  Except as provided in s. 626.112(6), with respect to
412	any line of authority specified in s. 626.015(10), no individual
413	shall, unless licensed as a life agent:
414	(a)  Solicit insurance or annuities or procure
415	applications; or
416	(b)  In this state, engage or hold himself or herself out
417	as engaging in the business of analyzing or abstracting
418	insurance policies or of counseling or advising or giving
419	opinions to persons relative to insurance or insurance contracts
420	other than:
421	1.  As a consulting actuary advising an insurer; or
422	2.  As to the counseling and advising of labor unions,
423	associations, trustees, employers, or other business entities,
424	the subsidiaries and affiliates of each, relative to their
425	interests and those of their members or employees under
426	insurance benefit plans; or
427	(c)  In this state, from this state, or with a resident of
428	this state, offer or attempt to negotiate on behalf of another
429	person a viatical settlement contract as defined in s. 626.9911.
430	Section 14.  Section 626.9911, Florida Statutes, is amended
431	to read:
432	626.9911  Definitions.--As used in this act, the term:
433	(1)(14)  "Financing entity" means an underwriter, placement
434	agent, lender, purchaser of securities, or purchaser of a policy
435	or certificate from a viatical settlement provider, credit
436	enhancer, or any entity that has direct ownership in a policy or
437	certificate that is the subject of a viatical settlement
438	contract, but whose principal activity related to the
439	transaction is providing funds or credit enhancement to effect
440	the viatical settlement or the purchase of one or more
441	viaticated viatical policies and who has an agreement in writing
442	with one or more licensed viatical settlement providers to
443	finance the acquisition of viatical settlement contracts. The
444	term does not include a nonaccredited investor, a viatical
445	settlement purchaser, or other natural person. A financing
446	entity may not enter into a viatical settlement contract.
447	(2)(1)  "Independent third-party trustee or escrow agent"
448	means an attorney, certified public accountant, financial
449	institution, or other person providing escrow services under the
450	authority of a regulatory body. The term does not include any
451	person associated, affiliated, or under common control with a
452	viatical settlement provider or viatical settlement broker.
453	(3)  "Life expectancy" means an opinion or evaluation as to
454	how long a particular person is to live, or relating to such
455	person's expected demise.
456	(4)  "Life expectancy provider" means a person that
457	provides to a viatical settlement provider or viatical
458	settlement broker a life expectancy.
459	(5)(2)  "Person" has the meaning specified in s. 1.01.
460	(6)(12)  "Related form" means any form, created by or on
461	behalf of a licensee, which a viator or viatical settlement
462	purchaser is required to sign or initial. The forms include, but
463	are not limited to, a power of attorney, a release of medical
464	information form, a suitability questionnaire, a disclosure
465	document, or any addendum, schedule, or amendment to a viatical
466	settlement contract or viatical settlement purchase agreement
467	considered necessary by a provider to effectuate a viatical
468	settlement transaction.
469	(7)  "Related provider trust" means a titling trust or
470	other trust established by a licensed viatical settlement
471	provider or financing entity for the sole purpose of holding the
472	ownership or beneficial interest in purchased policies in
473	connection with a financing transaction. The trust must have a
474	written agreement with a licensed viatical settlement provider
475	or financing entity under which the licensed viatical settlement
476	provider or financing entity is responsible for insuring
477	compliance with all statutory and regulatory requirements and
478	under which the trust agrees to make all records and files
479	relating to viatical settlement transactions available to the
480	office as if those records and files were maintained directly by
481	the licensed viatical settlement provider. This term does not
482	include an independent third-party trustee or escrow agent or a
483	trust that does not enter into agreements with a viator. A
484	related provider trust shall be subject to all provisions of
485	this act that apply to the viatical settlement provider who
486	established the related provider trust, except s. 626.9912,
487	which shall not be applicable. A viatical settlement provider
488	may establish no more than one related provider trust, and the
489	sole trustee of such related provider trust shall be the
490	viatical settlement provider licensed under s. 626.9912. The
491	name of the licensed viatical settlement provider shall be
492	included within the name of the related provider trust.
493	(8)(13)  "Special purpose entity" means an entity
494	established by a licensed viatical settlement provider or by a
495	financing entity, which may be a corporation, partnership,
496	trust, limited liability company, or other similar entity formed
497	solely to provide, either directly or indirectly, access to
498	institutional capital markets to a viatical settlement provider
499	or financing entity. A special purpose entity shall not enter
500	into a viatical settlement contract or a viatical settlement
501	purchase agreement.
502	(9)(3)  "Viatical settlement broker" means a person who, on
503	behalf of a viator and for a fee, commission, or other valuable
504	consideration, offers or attempts to negotiate viatical
505	settlement contracts between a viator resident in this state and
506	one or more viatical settlement providers. Notwithstanding the
507	manner in which the viatical settlement broker is compensated, a
508	viatical settlement broker is deemed to represent only the
509	viator and owes a fiduciary duty to the viator to act according
510	to the viator's instructions and in the best interest of the
511	viator. The term does not include an attorney, licensed
512	Certified Public Accountant, or investment adviser lawfully
513	registered under chapter 517, who is retained to represent the
514	viator and whose compensation is paid directly by or at the
515	direction and on behalf of the viator.
516	(10)(4)  "Viatical settlement contract" means a written
517	agreement entered into between a viatical settlement provider,
518	or its related provider trust, and a viator. The viatical
519	settlement contract includes an agreement to transfer ownership
520	or change the beneficiary designation of a life insurance policy
521	at a later date, regardless of the date that compensation is
522	paid to the viator. The agreement must establish the terms under
523	which the viatical settlement provider will pay compensation or
524	anything of value, which compensation or value is less than the
525	expected death benefit of the insurance policy or certificate,
526	in return for the viator's assignment, transfer, sale, devise,
527	or bequest of the death benefit or ownership of all or a portion
528	of the insurance policy or certificate of insurance to the
529	viatical settlement provider. A viatical settlement contract
530	also includes a contract for a loan or other financial
531	transaction secured primarily by an individual or group life
532	insurance policy, other than a loan by a life insurance company
533	pursuant to the terms of the life insurance contract, or a loan
534	secured by the cash value of a policy.
535	(11)(5)  "Viatical settlement provider" means a person who,
536	in this state, from this state, or with a resident of this
537	state, effectuates a viatical settlement contract. The term does
538	not include:
539	(a)  Any bank, savings bank, savings and loan association,
540	credit union, or other licensed lending institution that takes
541	an assignment of a life insurance policy as collateral for a
542	loan.
543	(b)  A life and health insurer that has lawfully issued a
544	life insurance policy that provides accelerated benefits to
545	terminally ill policyholders or certificateholders.
546	(c)  Any natural person who enters into no more than one
547	viatical settlement contract with a viator in 1 calendar year,
548	unless such natural person has previously been licensed under
549	this act or is currently licensed under this act.
550	(d)  A trust that meets the definition of a "related
551	provider trust."
552	(e)  A viator in this state.
553	(f)  A viatical settlement purchaser.
554	(f)(g)  A financing entity.
555	(12)(11)  "Viaticated policy" means a life insurance
556	policy, or a certificate under a group policy, which is the
557	subject of a viatical settlement contract.
558	(13)(6)  "Viator" means the owner of a life insurance
559	policy or a certificateholder under a group policy, which policy
560	is not a viaticated policy, who enters or seeks to enter into a
561	viatical settlement contract. This term does not include a
562	viatical settlement purchaser or a viatical settlement provider
563	or any person acquiring a policy or interest in a policy from a
564	viatical settlement provider, nor does it include an independent
565	third-party trustee or escrow agent.
566	(8)  "Viatical settlement purchase agreement" means a
567	contract or agreement, entered into by a viatical settlement
568	purchaser, to which the viator is not a party, to purchase a
569	life insurance policy or an interest in a life insurance policy,
570	which is entered into for the purpose of deriving an economic
571	benefit. The term also includes purchases made by viatical
572	settlement purchasers from any person other than the provider
573	who effectuated the viatical settlement contract.
574	(9)  "Viatical settlement purchaser" means a person who
575	gives a sum of money as consideration for a life insurance
576	policy or an equitable or legal interest in the death benefits
577	of a life insurance policy that has been or will be the subject
578	of a viatical settlement contract, for the purpose of deriving
579	an economic benefit, including purchases made from any person
580	other than the provider who effectuated the viatical settlement
581	contract or an entity affiliated with the provider. The term
582	does not include a licensee under this part, an accredited
583	investor as defined in Rule 501, Regulation D of the Securities
584	Act Rules, or a qualified institutional buyer as defined by Rule
585	144(a) of the Federal Securities Act, a special purpose entity,
586	a financing entity, or a contingency insurer. The above
587	references to Rule 501, Regulation D and Rule 144(a) of the
588	Federal Securities Act are used strictly for defining purposes
589	and shall not be interpreted in any other manner. Any person who
590	claims to be an accredited investor shall sign an affidavit
591	stating that he or she is an accredited investor, the basis of
592	that claim, and that he or she understands that as an accredited
593	investor he or she will not be entitled to certain protections
594	of the Viatical Settlement Act. This affidavit must be kept with
595	other documents required to be maintained by this act.
596	(10)  "Viatical settlement sales agent" means a person
597	other than a licensed viatical settlement provider who arranges
598	the purchase through a viatical settlement purchase agreement of
599	a life insurance policy or an interest in a life insurance
600	policy.
601	Section 15.  Paragraph (f) of subsection (3) and subsection
602	(4) of section 626.9912, Florida Statutes, are amended to read:
603	626.9912  Viatical settlement provider license required;
604	application for license.--
605	(3)  In the application, the applicant must provide all of
606	the following:
607	(f)  All applications, viatical settlement contract forms,
608	viatical settlement purchase agreement forms, escrow forms, and
609	other related forms proposed to be used by the applicant.
610	(4)  The office may not issue a license to an entity other
611	than a natural person if it is not satisfied that all officers,
612	directors, employees, stockholders, partners, and any other
613	persons who exercise or have the ability to exercise effective
614	control of the entity or who have the ability to influence the
615	transaction of business by the entity meet the standards of this
616	act and have not violated any provision of this act or rules of
617	the commission related to the business of viatical settlement
618	contracts or viatical settlement purchase agreements.
619	Section 16.  Section 626.9913, Florida Statutes, is amended
620	to read:
621	626.9913  Viatical settlement provider license continuance;
622	annual report; fees; deposit.--
623	(1)  A viatical settlement provider license continues in
624	force until suspended or revoked.
625	(2)  Annually, on or before March 1, the viatical
626	settlement provider licensee shall file a statement containing
627	information the commission requires and shall pay to the office
628	a license fee in the amount of $500. The annual statement shall
629	include audited financial statements prepared in accordance with
630	generally accepted accounting principles by an independent
631	certified public accountant as of the last day of the preceding
632	calendar year. A viatical settlement provider shall include in
633	all statements filed with the office all information requested
634	by the office regarding a related provider trust established by
635	the viatical settlement provider. The office may require more
636	frequent reporting. Failure to timely file the annual statement
637	or to timely pay the license fee is grounds for immediate
638	suspension of the license.
639	(3)  To ensure the faithful performance of its obligations
640	to its viators in the event of insolvency or the loss of its
641	license, a viatical settlement provider licensee must deposit
642	and maintain deposited in trust with the department securities
643	eligible for deposit under s. 625.52, having at all times a
644	value of not less than $100,000, provided a viatical settlement
645	provider in this state licensed prior to June 1, 2004, that has
646	deposited and maintains continuously deposited in trust with the
647	department securities in the amount of $25,000 and which posted
648	and maintains continuously posted a security bond acceptable to
649	the department in the amount of $75,000, has until June 1, 2005,
650	to comply with the requirements of this subsection. As an
651	alternative to meeting the $100,000 deposit requirement, the
652	provider may deposit and maintain deposited in trust with the
653	department such securities in the amount of $25,000 and post
654	with the office a surety bond acceptable to the office in the
655	amount of $75,000.
656	(4)  There shall be no additional annual license fee or
657	deposit requirements under this act for a related provider trust
658	established by a viatical settlement provider.
659	(5)  A judgment creditor or other claimant of a viatical
660	settlement provider may not levy upon any of the assets or
661	securities held in this state pursuant to this section.
662	(6)  The annual statement shall also contain the following
663	information in electronic format as set forth by the office:
664	(a)  For each viatical settlement contract entered into
665	during the reporting period:
666	1.  A unique identifying number or other consistent
667	identifier that corresponds to each viator in the statement, as
668	a means of identifying the viator in a manner that does not
669	reveal any confidential information.
670	2.  The date, month, and year the viatical settlement
671	contract was signed by all necessary parties.
672	3.  The insurance carrier's name.
673	4.  The age and each life expectancy, in months, of the
674	insured at the time the viatical settlement contract was entered
675	into.
676	5.  The viator's state of residence at the time of
677	contract.
678	6.  The face amount of policy purchased.
679	7.  The net death benefit purchased.
680	8.  The estimated total premiums to keep the policy in
681	force for life expectancy, any waiver of premium in effect, or
682	whether the premium is not applicable because the policy is paid
683	up or no premiums are due.
684	9.  The net amount paid to the owner, less any outstanding
685	debts or liens.
686	10.  The source of the policy, whether broker, direct
687	purchase, or secondary market, previously purchased by another
688	person.
689	11.  The type of policy, individual or group.
690	12.  The age of the policy at the time the viatical
691	settlement contract was effected.
692	13.  The primary International Classification of Diseases
693	diagnosis code, if applicable, in numeric format, as defined by
694	the International Classification of Diseases as published by the
695	United States Department of Health and Human Services.
696	14.  The type of funding, whether institutional, such as a
697	bank, corporation, company, or nonindividual entity, or private,
698	such as an individual.
699	15.  The status as of ending date. Allowable status codes
700	are death, if applicable; not applicable, if the date of death
701	has not been determined or verified; or sold, if the settlement
702	contract has been sold.
703	(b)  For each viatical settlement contract where death has
704	occurred during the reporting period:
705	1.  A unique identifying number or other consistent
706	identifier that corresponds to each viator in the report, as a
707	means of identifying the viator in a manner that does not reveal
708	any confidential information.
709	2.  The date, month, and year the viatical settlement
710	contract was signed by all necessary parties.
711	3.  The age and each life expectancy, in months, of the
712	insured at time the viatical settlement contract was entered
713	into.
714	4.  The viator's state of residence at the time of
715	contract.
716	5.  The net death benefit collected under the policy.
717	6.  The amount of total premiums paid, any waiver of
718	premium in effect, or whether the premium is not applicable
719	because the policy is paid up or no premiums are due.
720	7.  The net amount paid to the owner, less any outstanding
721	debts or liens.
722	8.  The Primary International Classification of Diseases
723	diagnosis code, in numeric format, if applicable, as defined by
724	the International Classification of Diseases as published by the
725	United States Department of Health and Human Services.
726	9.  The date of death.
727	10.  The amount of time, in months, between the date the
728	viatical settlement contract was signed by all necessary parties
729	and the date of death.
730	11.  The difference between the actual number of months the
731	insured lived after the date the contract was signed by all
732	necessary parties and the life expectancy used by the reporting
733	viatical provider.
734	(c)  For each viatical settlement contract in which the
735	insured has not died and that was not entered into in the
736	reporting period:
737	1.  A unique identifying number or other consistent
738	identifier that corresponds to each viator in the report as a
739	means of identifying the viator in a manner that does not reveal
740	any confidential information.
741	2.  The date, month, and year the viatical settlement
742	contract was signed by all necessary parties.
743	3.  The insurance carrier's name.
744	4.  The age and each life expectancy, in months, of the
745	insured at the time the viatical settlement contract was entered
746	into.
747	5.  The viator's state of residence at the time of
748	contract.
749	6.  The face amount of policy purchased.
750	7.  The net death benefit purchased.
751	8.  The estimated total premiums to keep the policy in
752	force for life expectancy, any waiver of premium in effect, or
753	whether the premium is not applicable because the policy is paid
754	up or no premiums are due.
755	9.  The net amount paid to the owner, less any outstanding
756	debts or liens.
757	10.  The source of the policy, whether by broker, direct
758	purchase, or the secondary market, previously purchased by
759	another person.
760	11.  The type of policy, whether individual or group.
761	12.  The age of the policy at the time the viatical
762	settlement contract was effected.
763	13.  The primary International Classification of Diseases
764	diagnosis code, if applicable, in numeric format, as defined by
765	the International Classification of Diseases as published by the
766	United States Department of Health and Human Services.
767	14.  The type of funding, whether institutional, such as a
768	bank, corporation, company, or nonindividual entity, or private,
769	such as an individual.
770	15.  Whether the insured has outlived the life expectancy.
771	If the insured has outlived the life expectancy, the number of
772	months by which the insured has outlived the life expectancy.
773	(d)  The name and address of each life expectancy provider
774	used by the licensee since becoming licensed.
775	(e)  The name and address of any person whom the viatical
776	settlement provider uses or employs to monitor or track an
777	insured's health status after a viatical settlement contract has
778	been signed by all necessary parties and payment has been made
779	to the owner.
780	Section 17.  Subsection (1) of section 626.9914, Florida
781	Statutes, is amended to read:
782	626.9914  Suspension, revocation, or nonrenewal of viatical
783	settlement provider license; grounds; administrative fine.--
784	(1)  The office shall suspend, revoke, deny, or refuse to
785	renew the license of any viatical settlement provider if the
786	office finds that the licensee:
787	(a)  Has made a misrepresentation in the application for
788	the license;
789	(b)  Has engaged in fraudulent or dishonest practices, or
790	otherwise has been shown to be untrustworthy or incompetent to
791	act as a viatical settlement provider;
792	(c)  Demonstrates a pattern of unreasonable payments to
793	viators;
794	(d)  Has been found guilty of, or has pleaded guilty or
795	nolo contendere to, any felony, or a misdemeanor involving fraud
796	or moral turpitude, regardless of whether a judgment of
797	conviction has been entered by the court;
798	(e)  Has issued viatical settlement contracts that have not
799	been approved pursuant to this act;
800	(f)  Has failed to honor contractual obligations related to
801	the business of viatical settlement contracts;
802	(g)  Deals in bad faith with viators;
803	(h)  Has violated any provision of the insurance code or of
804	this act;
805	(i)  Employs any person who materially influences the
806	licensee's conduct and who fails to meet the requirements of
807	this act; or
808	(j)  No longer meets the requirements for initial
809	licensure.
810	Section 18.  Section 626.9916, Florida Statutes, is amended
811	to read:
812	626.9916  Viatical settlement broker license required;
813	application for license.--
814	(1)  After October 1, 2005 July 1, 1996, a person, other
815	than a life agent licensed under this chapter, may not in this
816	state, from this state, or with a resident of this state perform
817	the functions of a viatical settlement broker as defined in this
818	act without first having obtained a license from the department.
819	(2)  Before performing the functions of a viatical
820	settlement broker, a life agent shall appoint himself or herself
821	with the department and pay applicable fees pursuant to s.
822	624.501(7)(a). Application for a viatical settlement broker
823	license must be made to the department by the applicant on a
824	form prescribed by the department, under oath, and signed by the
825	applicant. The application must be accompanied by a $50 filing
826	fee. If the applicant is a corporation, the application must be
827	under oath and signed by the president and the secretary of the
828	corporation.
829	(3)  Each natural person who on July 1, 2005, held a
830	viatical settlement broker's license and self-appointment may,
831	upon obtaining a life agent license on or before October 1,
832	2005, transfer an existing broker self-appointment to such
833	license. In the application, the applicant must provide all of
834	the following:
835	(a)  The applicant's full name, age, residence address, and
836	business address, and all occupations engaged in by the
837	applicant during the 5 years preceding the date of the
838	application; if the applicant is not a natural person, the
839	applicant must provide the information required by this
840	paragraph with respect to all officers, directors, or partners.
841	(b)  A copy of the applicant's basic organizational
842	documents, if any, including the articles of incorporation,
843	articles of association, partnership agreement, trust agreement,
844	or other similar documents, together with all amendments to such
845	documents.
846	(c)  If the applicant is not a natural person, a list
847	showing the name, business and residence addresses, and official
848	position of each individual who is responsible for conduct of
849	the applicant's affairs, including, but not limited to, any
850	member of the applicant's board of directors, board of trustees,
851	executive committee, or other governing board or committee and
852	any other person or entity owning or having the right to acquire
853	10 percent or more of the voting securities of the applicant.
854	(d)  With respect to an individual applicant and with
855	respect to each individual identified under paragraph (c):
856	1.  A sworn biographical statement on forms supplied by the
857	department.
858	2.  A set of fingerprints on forms prescribed by the
859	department, certified by a law enforcement officer, and
860	accompanied by the fingerprinting fee specified in s. 624.501.
861	3.  Authority, if required by the department, for release
862	of information relating to the investigation of the individual's
863	background.
864	(e)  Such other information as the department deems
865	necessary to determine that the individual applicant and the
866	individuals identified under paragraph (c) are competent and
867	trustworthy and can lawfully and successfully act as a viatical
868	settlement provider.
869	(4)  All viatical settlement broker licenses shall
870	terminate on October 1, 2005, and shall not be subject to
871	continuation or renewal. Any natural person who is employed by
872	or otherwise represents a viatical settlement broker licensee,
873	which broker licensee is not a natural person, must also be
874	licensed as a viatical settlement broker if such employee or
875	other representative performs the functions of a viatical
876	settlement broker as defined in this act.
877	(5)  Notwithstanding the manner in which the viatical
878	settlement broker is compensated, he or she is deemed to
879	represent only the viator and owes a fiduciary duty to the
880	viator to act according to the viator's instructions and in the
881	best interest of the viator. The department may not issue a
882	license to an applicant if it is not satisfied that the
883	applicant, if a natural person, or all officers, directors,
884	employees, stockholders, and partners who exercise or have the
885	ability to exercise effective control of the applicant or who
886	have the ability to influence the transaction of business by the
887	applicant, if the applicant is not a natural person, meet the
888	standards of this act and have not violated any provision of
889	this act or rules of the department related to the business of
890	viatical settlement contracts.
891	(6)  The compensation received by a life agent for
892	activities performed as a viatical settlement broker may not be
893	divided or shared with another person unless such other person
894	is a life agent licensed under this chapter and appointed as
895	provided in this part. The department may specify the form of
896	the license and may require photographing of the applicant as
897	part of the application process.
898	(7)  Upon the filing of a sworn application and the payment
899	of the license fee and all other applicable fees under this act,
900	the department shall investigate each applicant and may issue
901	the applicant a license if the department finds that the
902	applicant:
903	(a)  Is competent and trustworthy and intends to act in
904	good faith in the business authorized by the license applied
905	for.
906	(b)  Has a good business reputation and has had experience,
907	training, or education that qualifies the applicant to conduct
908	the business authorized by the license applied for.
909	(c)  Except with respect to applicants for nonresident
910	licenses, is a bona fide resident of this state and actually
911	resides in this state at least 180 days a year. If an applicant
912	holds a similar license or an insurance agent's or broker's
913	license in another state at the time of applying for a license
914	under this section, the applicant may be found to meet the
915	residency requirement of this paragraph only after he or she
916	furnishes a letter of clearance satisfactory to the department
917	or other proof that the applicant's resident licenses have been
918	canceled or changed to nonresident status and that the applicant
919	is in good standing with the licensing authority.
920	(d)  Is a corporation, a corporation incorporated under the
921	laws of this state, or a foreign corporation authorized to
922	transact business in this state.
923	(e)  Has designated the Chief Financial Officer as its
924	agent for service of process.
925	(f)  If a natural person, is at least 18 years of age and a
926	United States citizen or legal alien who possesses work
927	authorization from the United States Bureau of Citizenship and
928	Immigration Services.
929	(8)  An applicant for a nonresident viatical settlement
930	broker license must, in addition to designating the Chief
931	Financial Officer as agent for service of process as required by
932	this section, also furnish the department with the name and
933	address of a resident of this state upon whom notices or orders
934	of the department or process affecting the applicant or licensee
935	may be served. After issuance of the license, the licensee must
936	also notify the department of change of the person to receive
937	such notices, orders, or process; such change is not effective
938	until acknowledged by the department.
939	(9)  The department may, by rule, specify experience,
940	educational, or other training standards required for licensure
941	under this section.
942	(10)  Except as otherwise provided in this section,
943	viatical settlement brokers shall be licensed, appointed,
944	renewed, continued, reinstated, and terminated in the manner
945	specified in this chapter for insurance representatives
946	generally; however, viatical settlement brokers are not subject
947	to continuing education requirements.
948	Section 19.  Section 626.9919, Florida Statutes, is amended
949	to read:
950	626.9919  Notice of change of licensee address or
951	name.--Each viatical settlement provider licensee, viatical
952	settlement broker licensee, and viatical settlement sales agent
953	licensee must provide the office or department, as applicable,
954	at least 30 days' advance notice of any change in the licensee's
955	name, residence address, principal business address, or mailing
956	address.
957	Section 20.  Section 626.992, Florida Statutes, is amended
958	to read:
959	626.992  Use of licensed viatical settlement providers and
960	viatical settlement licensed brokers, providers, and sales
961	agents required.--
962	(1)  A licensed viatical settlement provider may not use
963	any person to perform the functions of a viatical settlement
964	broker as defined in this act unless such person holds a
965	current, valid life agent license and has appointed himself or
966	herself in conformance with this act as a viatical settlement
967	broker. Salaried individuals employed by viatical settlement
968	providers shall engage in viatical settlement broker activities
969	only when accompanied by a viatical settlement broker who holds
970	a current valid license issued under this act. A viatical
971	settlement provider may not use any person to perform the
972	functions of a viatical settlement sales agent unless the person
973	holds a current, valid license as provided in subsection (4).
974	(2)  A licensed viatical settlement broker may not use any
975	person to perform the functions of a viatical settlement
976	provider as defined in this act unless such person holds a
977	current, valid license as a viatical settlement provider.
978	(3)  A viatical settlement sales agent may not use any
979	person to perform the functions of a viatical settlement broker
980	unless such person holds a current, valid license as a viatical
981	settlement broker.
982	(4)  A person may not perform the functions of a viatical
983	settlement sales agent unless licensed as a life agent as
984	defined in s. 626.015 and as provided in this chapter.
985	Section 21.  Subsections (1) and (2) of section 626.9921,
986	Florida Statutes, are amended to read:
987	626.9921  Filing of forms; required procedures; approval.--
988	(1)  A viatical settlement contract form, viatical
989	settlement purchase agreement form, escrow form, or related form
990	may be used in this state only after the form has been filed
991	with the office and only after the form has been approved by the
992	office.
993	(2)  The viatical settlement contract form, viatical
994	settlement purchase agreement form, escrow form, or related form
995	must be filed with the office at least 60 days before its use.
996	The form is considered approved on the 60th day after its date
997	of filing unless it has been previously disapproved by the
998	office. The office must disapprove a viatical settlement
999	contract form, viatical settlement purchase agreement form,
1000	escrow form, or related form that is unreasonable, contrary to
1001	the public interest, discriminatory, or misleading or unfair to
1002	the viator or the purchaser.
1003	Section 22.  Subsection (2) of section 626.9922, Florida
1004	Statutes, is amended, and subsections (5), (6), and (7) are
1005	added to said section, to read:
1006	626.9922  Examination.--
1007	(2)  All accounts, books and records, documents, files,
1008	contracts, and other information relating to all transactions of
1009	viatical settlement contracts or viatical settlement purchase
1010	agreements made before July 1, 2005, must be maintained by the
1011	licensee for a period of at least 3 years after the death of the
1012	insured and must be available to the office or department for
1013	inspection during reasonable business hours.
1014	(5)  The office has jurisdiction over all viatical
1015	settlement purchase agreements made before July 1, 2005,
1016	including, but not limited to, the authority to examine persons
1017	in possession of records relating to viatical settlement
1018	purchase agreements made before July 1, 2005, and that authority
1019	set forth in s. 624.319.
1020	(6)  If the office makes the determination that a provider
1021	does not have the financial ability to perform its present or
1022	future obligations under the viatical settlement purchase
1023	agreements made before July 1, 2005, the office shall make a
1024	referral to the United States Securities and Exchange Commission
1025	or the Office of Financial Regulation for further administrative
1026	action pursuant to s. 517.191, including, but not limited to,
1027	the appointment of a receiver by the court.
1028	(7)  Subsections (1), (2), (3), and (4) apply to life
1029	expectancy providers providing life expectancies in the state
1030	and providing life expectancies to viatical settlement providers
1031	in the state, as if life expectancy providers were licensees.
1032	Section 23.  Section 626.99245, Florida Statutes, is
1033	amended to read:
1034	626.99245  Conflict of regulation of viaticals.--
1035	(1)  A viatical settlement provider who from this state
1036	enters into a viatical settlement purchase agreement with a
1037	purchaser who is a resident of another state that has enacted
1038	statutes or adopted regulations governing viatical settlement
1039	purchase agreements, shall be governed in the effectuation of
1040	that viatical settlement purchase agreement by the statutes and
1041	regulations of the purchaser's state of residence. If the state
1042	in which the purchaser is a resident has not enacted statutes or
1043	regulations governing viatical settlement purchase agreements,
1044	the provider shall give the purchaser notice that neither
1045	Florida nor his or her state regulates the transaction upon
1046	which he or she is entering. For transactions in these states,
1047	however, the viatical settlement provider is to maintain all
1048	records required as if the transactions were executed in
1049	Florida. However, the forms used in those states need not be
1050	approved by the office.
1051	(1)(2)  A viatical settlement provider who from this state
1052	enters into a viatical settlement contract with a viator who is
1053	a resident of another state that has enacted statutes or adopted
1054	regulations governing viatical settlement contracts shall be
1055	governed in the effectuation of that viatical settlement
1056	contract by the statutes and regulations of the viator's state
1057	of residence. If the state in which the viator is a resident has
1058	not enacted statutes or regulations governing viatical
1059	settlement agreements, the provider shall give the viator notice
1060	that neither Florida nor his or her state regulates the
1061	transaction upon which he or she is entering. For transactions
1062	in those states, however, the viatical settlement provider is to
1063	maintain all records required as if the transactions were
1064	executed in Florida. The forms used in those states need not be
1065	approved by the office.
1066	(2)(3)  This section does not affect the requirement of ss.
1067	626.9911(11)(5) and 626.9912(1) that a viatical settlement
1068	provider doing business from this state must obtain a viatical
1069	settlement license from the office. As used in this subsection,
1070	the term "doing business from this state" includes effectuating
1071	viatical settlement contracts and effectuating viatical
1072	settlement purchase agreements from offices in this state,
1073	regardless of the state of residence of the viator or the
1074	viatical settlement purchaser.
1075	(4)  The offer, sale, and purchase of viatical settlement
1076	contracts, and the regulation of viatical settlement providers
1077	shall be within the exclusive jurisdiction of the Office of
1078	Insurance Regulation under the provisions of this part.
1079	Section 24.  Section 626.9925, Florida Statutes, is amended
1080	to read:
1081	626.9925  Rules.--The commission may adopt rules to
1082	administer this act, including rules establishing standards for
1083	evaluating advertising by licensees; rules providing for the
1084	collection of data, for disclosures to viators or purchasers,
1085	and for the reporting of life expectancies; and rules defining
1086	terms used in this act and prescribing recordkeeping
1087	requirements relating to executed viatical settlement contracts
1088	and viatical settlement purchase agreements.
1089	Section 25.  Section 626.9926, Florida Statutes, is amended
1090	to read:
1091	626.9926  Rate regulation not authorized.--Nothing in this
1092	act shall be construed to authorize the office or department to
1093	directly or indirectly regulate the amount paid as consideration
1094	for entry into a viatical settlement contract or viatical
1095	settlement purchase agreement.
1096	Section 26.  Subsection (1) of section 626.9927, Florida
1097	Statutes, is amended to read:
1098	626.9927  Unfair trade practices; cease and desist;
1099	injunctions; civil remedy.--
1100	(1)  A violation of this act is an unfair trade practice
1101	under ss. 626.9521 and 626.9541 and is subject to the penalties
1102	provided in the insurance code. Part X of this chapter applies
1103	to a licensee under this act or a transaction subject to this
1104	act as if a viatical settlement contract and a viatical
1105	settlement purchase agreement were an insurance policy.
1106	Section 27.  Paragraph (b) of subsection (1) of section
1107	626.99275, Florida Statutes, is amended to read:
1108	626.99275  Prohibited practices; penalties.--
1109	(1)  It is unlawful for any person:
1110	(b)  In issuing a life expectancy, to In the solicitation
1111	or sale of a viatical settlement purchase agreement:
1112	1.  Issue a life expectancy that is not based upon
1113	generally accepted medical or actuarial practices To employ any
1114	device, scheme, or artifice to defraud;
1115	2.  Agree to be compensated or receive compensation which
1116	is contingent upon providing a specifically designated life
1117	expectancy To obtain money or property by means of an untrue
1118	statement of a material fact or by any omission to state a
1119	material fact necessary in order to make the statements made, in
1120	light of the circumstances under which they were made, not
1121	misleading; or
1122	3.  Knowingly understate or overstate a life expectancy
1123	with the intent to defraud To engage in any transaction,
1124	practice, or course of business which operates or would operate
1125	as a fraud or deceit upon a person.
1126	(2)  A person who violates any provision of this section
1127	commits:
1128	(a)  A felony of the third degree, punishable as provided
1129	in s. 775.082, s. 775.083, or s. 775.084, if the insurance
1130	policy involved is valued at any amount less than $20,000.
1131	(b)  A felony of the second degree, punishable as provided
1132	in s. 775.082, s. 775.083, or s. 775.084, if the insurance
1133	policy involved is valued at $20,000 or more, but less than
1134	$100,000.
1135	(c)  A felony of the first degree, punishable as provided
1136	in s. 775.082, s. 775.083, or s. 775.084, if the insurance
1137	policy involved is valued at $100,000 or more.
1138	Section 28.  Section 626.99278, Florida Statutes, is
1139	amended to read:
1140	626.99278  Viatical provider anti-fraud plan.--Every
1141	licensed viatical settlement provider and viatical settlement
1142	broker must adopt an anti-fraud plan and file it with the
1143	Division of Insurance Fraud of the department on or before
1144	December 1, 2000. Each anti-fraud plan shall include:
1145	(1)  A description of the procedures for detecting and
1146	investigating possible fraudulent acts and procedures for
1147	resolving material inconsistencies between medical records and
1148	insurance applications.;
1149	(2)  A description of the procedures for the mandatory
1150	reporting of possible fraudulent insurance acts to the Division
1151	of Insurance Fraud of the department.;
1152	(3)  A description of the plan for anti-fraud education and
1153	training of its underwriters or other personnel.; and
1154	(4)  A written description or chart outlining the
1155	organizational arrangement of the anti-fraud personnel who are
1156	responsible for the investigation and reporting of possible
1157	fraudulent insurance acts, and investigating unresolved material
1158	inconsistencies between medical records and insurance
1159	applications.
1160	(5)  A process by which the provider will perform initial
1161	and continuing review of the accuracy of its life expectancies,
1162	whether such life expectancies are performed in house or by a
1163	contracted life expectancy provider, and ensure compliance with
1164	s. 626.99275(1) by its life expectancy providers.
1165	Section 29.  Section 626.9928, Florida Statutes, is amended
1166	to read:
1167	626.9928  Acquisitions.--Acquisition of interest in a
1168	viatical settlement provider or viatical settlement broker is
1169	subject to s. 628.4615.
1170	Section 30.  Section 626.99285, Florida Statutes, is
1171	amended to read:
1172	626.99285  Applicability of insurance code.--In addition to
1173	other applicable provisions cited in the insurance code, the
1174	office or department, as appropriate, has the authority granted
1175	under ss. 624.310, 626.901, and 626.989 to regulate viatical
1176	settlement providers, viatical settlement brokers, viatical
1177	settlement sales agents, viatical settlement contracts, viatical
1178	settlement purchase agreements, and viatical settlement
1179	transactions.
1180	Section 31.  Section 626.99295, Florida Statutes, is
1181	amended to read:
1182	626.99295  Grace period.--Any person who, on July 1, 2005,
1183	is effectuating a viatical settlement purchase agreement made
1184	before July 1, 2005, under provisions of law in effect before
1185	such date, which viatical settlement purchase agreement was not
1186	registered pursuant to chapter 517, must proceed within 30 days
1187	after July 1, 2005, to conclude all viatical settlement purchase
1188	transactions in progress, provided, if funds have not been
1189	matched with a viaticated policy, such funds, or any unmatched
1190	portion of such funds, shall be returned to the viatical
1191	settlement purchaser within 30 days after July 1, 2005. The
1192	provider may not solicit, negotiate, advertise, or effectuate
1193	new viatical settlement purchase agreements after July 1, 2005.
1194	An unlicensed viatical settlement provider or viatical
1195	settlement broker that was legally transacting business in this
1196	state on June 30, 2000, may continue to transact such business,
1197	in the absence of any orders by the office, department, or the
1198	former Department of Insurance to the contrary, until the office
1199	or department, as applicable, approves or disapproves the
1200	viatical settlement provider's application for licensure if the
1201	viatical settlement provider or viatical settlement broker filed
1202	with the former department an application for licensure no later
1203	than August 1, 2000, and if the viatical settlement provider or
1204	viatical settlement broker complies with all other provisions of
1205	this act. Any form for which former department approval was
1206	required under this part must have been filed by August 1, 2000,
1207	and may continue to be used until disapproved by the office or
1208	department.
1209	Section 32.  Sections 626.9917, 626.9918, 626.99235,
1210	626.99236, and 626.99277, Florida Statutes, are repealed.
1211	Section 33.  This act shall take effect July 1, 2005.

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