HB 1437

CS

CHAMBER ACTION

1	The Commerce Council recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5
6	A bill to be entitled
7	An act relating to viatical settlements; amending s.
8	517.021, F.S.; revising and providing definitions;
9	creating s. 517.072, F.S.; specifying nonapplication of
10	certain exemptions to viatical settlement investments;
11	specifying the offering of a viatical settlement
12	investment as not an exempt transaction under certain
13	provisions of law; amending s. 517.081, F.S.; authorizing
14	the Financial Services Commission to adopt additional
15	rules relating to securities registration; authorizing the
16	commission to adopt rules establishing requirements and
17	standards for disclosures and records relating to viatical
18	settlement investments; creating s. 517.1215, F.S.;
19	requiring the commission to adopt rules specifying
20	requirements for certain investment advisors; requiring
21	the commission to establish by rule rules of conduct and
22	prohibited business practices for investment advisers and
23	associated persons; providing requirements; creating s.
24	517.1217, F.S.; authorizing the commission to establish by
25	rule rules of conduct and prohibited business practices
26	for dealers and associated persons; providing
27	requirements; amending s. 624.501, F.S.; including agents
28	making an appointment under certain life insurance agent
29	fee provisions; amending ss. 626.015, 626.112, 626.207,
30	and 626.331, F.S., to conform; amending s. 626.611, F.S.;
31	providing an additional ground for compulsory refusal,
32	suspension, or revocation of certain licenses or
33	appointments for transactions relating to viatical
34	settlement contracts; amending s. 626.777, F.S., to
35	conform; amending s. 626.7845, F.S.; prohibiting certain
36	activities by a person relating to viatical settlement
37	contracts unless as a licensed life agent; amending s.
38	626.9911, F.S.; revising definitions; amending s.
39	626.9912, F.S.; providing an additional requirement for
40	viatical settlement provider license applications;
41	amending s. 626.9913, F.S.; specifying additional
42	requirements for annual statements by viatical settlement
43	provider licensees; providing an alternative bond
44	provision for certain viatical settlement providers for a
45	certain time period; prohibiting certain persons from
46	levying upon certain assets or securities under certain
47	circumstances; amending s. 626.9914, F.S.; including the
48	authority to deny a license among the adverse actions the
49	Office of Insurance Regulation may take against a viatical
50	settlement provider for certain actions; providing an
51	additional ground for the office to take adverse actions;
52	amending s. 626.9916, F.S.; revising licensure
53	requirements for viatical settlement brokers and life
54	agents; providing for self-appointment; providing for
55	transfers of appointments; providing for termination of
56	licenses; specifying a fiduciary duty of viatical
57	settlement brokers; prohibiting dividing or sharing
58	compensation received by a life agent for certain
59	activities under certain circumstances; creating s.
60	626.99175, F.S.; requiring registration to operate as a
61	life expectancy provider; providing registration for
62	requirements; requiring certain application information;
63	requiring registered life expectancy providers to
64	periodically file audits with the office; providing audit
65	requirements; authorizing certain subsidiaries of life
66	expectancy providers to operate as a provider under
67	certain circumstances; prohibiting certain providers,
68	brokers, and agents from owning or being an officer,
69	director, or employee of a life expectancy provider;
70	requiring providers to provide the office with advance
71	notice of certain changes; requiring providers to retain
72	copies of certain information and documents; providing an
73	exception; providing procedures for approval or denial of
74	applications; specifying grounds for denial of an
75	application; authorizing the office to assess
76	administrative fines under certain circumstances;
77	authorizing the office to place a provider on probation
78	for a certain period; specifying certain activities
79	violations; amending ss. 626.9919, 626.992, and 626.9921,
80	F.S., to conform; amending s. 626.9922, F.S.; specifying
81	office jurisdiction over certain viatical settlement
82	purchase agreements; authorizing the office to refer
83	certain cases to the United States Securities and Exchange
84	Commission for administrative action under certain
85	circumstances; providing application to life expectancy
86	providers; amending ss. 626.99245, 626.9925, 626.9926, and
87	626.9927, F.S., to conform; amending s. 626.99275, F.S.;
88	revising prohibited practices to apply to issuing life
89	expectancies and change a viator's residency for certain
90	purposes; providing a criminal penalty; amending s.
91	626.99278, F.S.; providing for application to registered
92	life expectancy providers; requiring an anti-fraud plan to
93	include a life expectancy accuracy review process;
94	amending ss. 626.9928 and 626.99285, F.S., to conform;
95	amending s. 626.99295, F.S.; revising application of a
96	grace period for certain viatical settlement purchase
97	agreements; repealing s. 626.9917, F.S., relating to
98	denial, suspension, revocation, or nonrenewal of viatical
99	settlement broker licenses; repealing s. 626.9918, F.S.,
100	relating to effect of suspension or revocation of viatical
101	settlement broker licenses; repealing s. 626.99235, F.S.,
102	relating to disclosures to viatical settlement purchasers;
103	repealing s. 626.99236, F.S., relating to further
104	disclosures to viatical settlement purchasers; repealing
105	s. 626.99277, F.S., relating to false representations;
106	providing an effective date.
107
108	Be It Enacted by the Legislature of the State of Florida:
109
110	Section 1.  Subsections (19) and (21) of section 517.021,
111	Florida Statutes, are renumbered as subsections (20) and (22),
112	respectively, present subsection (20) is renumbered as
113	subsection (21) and amended, and subsections (19) and (23) are
114	added to said section, to read:
115	517.021  Definitions.--When used in this chapter, unless
116	the context otherwise indicates, the following terms have the
117	following respective meanings:
118	(19)  "Qualified institutional buyer" means any qualified
119	institutional buyer, as defined in United States Securities and
120	Exchange Commission Rule 144A, 17 C.F.R. 230.144A(a), under the
121	Securities Act of 1933, as amended, or any foreign buyer that
122	satisfies the minimum financial requirements set forth in such
123	rule.
124	(21)(20)  "Security" includes any of the following:
125	(a)  A note.
126	(b)  A stock.
127	(c)  A treasury stock.
128	(d)  A bond.
129	(e)  A debenture.
130	(f)  An evidence of indebtedness.
131	(g)  A certificate of deposit.
132	(h)  A certificate of deposit for a security.
133	(i)  A certificate of interest or participation.
134	(j)  A whiskey warehouse receipt or other commodity
135	warehouse receipt.
136	(k)  A certificate of interest in a profit-sharing
137	agreement or the right to participate therein.
138	(l)  A certificate of interest in an oil, gas, petroleum,
139	mineral, or mining title or lease or the right to participate
140	therein.
141	(m)  A collateral trust certificate.
142	(n)  A reorganization certificate.
143	(o)  A preorganization subscription.
144	(p)  Any transferable share.
145	(q)  An investment contract.
146	(r)  A beneficial interest in title to property, profits,
147	or earnings.
148	(s)  An interest in or under a profit-sharing or
149	participation agreement or scheme.
150	(t)  Any option contract which entitles the holder to
151	purchase or sell a given amount of the underlying security at a
152	fixed price within a specified period of time.
153	(u)  Any other instrument commonly known as a security,
154	including an interim or temporary bond, debenture, note, or
155	certificate.
156	(v)  Any receipt for a security, or for subscription to a
157	security, or any right to subscribe to or purchase any security.
158	(w)  A viatical settlement investment.
159	(23)  "Viatical settlement investment" means an agreement
160	for the purchase, sale, assignment, transfer, devise, or bequest
161	of all or any portion of a legal or equitable interest in a
162	viaticated policy as defined in chapter 626. The term does not
163	include:
164	(a)  The transfer or assignment of an interest in a
165	previously viaticated policy from a natural person who transfers
166	or assigns no more than one such interest in 1 calendar year.
167	(b)  The provision of stop-loss coverage to a viatical
168	settlement provider, financing entity, or related provider
169	trust, as those terms are defined in s. 626.9911, by an
170	authorized or eligible insurer.
171	(c)  The transfer or assignment of a viaticated policy from
172	a licensed viatical settlement provider to another licensed
173	viatical settlement provider, a related provider trust, or a
174	financing entity, as those terms are defined in s. 626.9911, or
175	to a contingency insurer provided that such transfer or
176	assignment is not the direct or indirect promotion of any scheme
177	or enterprise with the intent of violating or evading any
178	provision of this chapter.
179	(d)  The transfer or assignment of a viaticated policy to a
180	bank, trust company, savings institution, insurance company,
181	dealer, investment company as defined by the Investment Company
182	Act of 1940, pension or profit-sharing trust, or qualified
183	institutional buyer as defined by United States Securities and
184	Exchange Commission Rule 144A, 17 C.F.R. 230.144A(a), or to an
185	accredited investor as defined by Rule 501 of Regulation D of
186	the Securities Act Rules, provided such transfer or assignment
187	is not for the direct or indirect promotion of any scheme or
188	enterprise with the intent of violating or evading any provision
189	of this chapter.
190	(e)  The transfer or assignment of a viaticated policy by a
191	conservator of a viatical settlement provider appointed by a
192	court of competent jurisdiction who transfers or assigns
193	ownership of viaticated policies pursuant to that court's order.
194	Section 2.  Section 517.072, Florida Statutes, is created
195	to read:
196	517.072  Viatical settlement investments.--The exemptions
197	provided for by ss. 517.051(6), (8), and (10) do not apply to a
198	viatical settlement investment. The offering of a viatical
199	settlement investment is not an exempt transaction under s.
200	517.061(2), (3), (8), (11), and (18), regardless of whether the
201	offering otherwise complies with the conditions of that section,
202	unless such offering is to a qualified institutional buyer.
203	Section 3.  Subsection (7) of section 517.081, Florida
204	Statutes, is amended, and subsection (8) is added to said
205	section, to read:
206	517.081  Registration procedure.--
207	(7)  If upon examination of any application the office
208	shall find that the sale of the security referred to therein
209	would not be fraudulent and would not work or tend to work a
210	fraud upon the purchaser, that the terms of the sale of such
211	securities would be fair, just, and equitable, and that the
212	enterprise or business of the issuer is not based upon unsound
213	business principles, it shall record the registration of such
214	security in the register of securities; and thereupon such
215	security so registered may be sold by any registered dealer,
216	subject, however, to the further order of the office. In order
217	to determine if an offering is fair, just, and equitable, the
218	commission may by rule establish requirements and standards for
219	the filing, content, and circulation of any preliminary, final,
220	or amended prospectus and other sales literature and may by rule
221	establish merit qualification criteria relating to the issuance
222	of equity securities, debt securities, insurance company
223	securities, real estate investment trusts (REITs), and other
224	traditional and nontraditional investments, including, but not
225	limited to, oil and gas investments. The criteria may include
226	such elements as the promoter's equity investment ratio, the
227	financial condition of the issuer, the voting rights of
228	shareholders, the grant of options or warrants to underwriters
229	and others, loans and other affiliated transaction, the use or
230	refund of proceeds of the offering, and such other relevant
231	criteria as the office in its judgment may deem necessary to
232	such determination.
233	(8)  The commission may by rule establish requirements and
234	standards for:
235	(a)  Disclosures to purchasers of viatical settlement
236	investments.
237	(b)  Recordkeeping requirements for sellers of viatical
238	settlement investments.
239	Section 4.  Section 517.1215, Florida Statutes, is created
240	to read:
241	517.1215  Requirements, rules of conduct, and prohibited
242	business practices for investment advisors and their associated
243	persons.--
244	(1)  By rule, the commission shall specify requirements for
245	investment advisors deemed to have custody of client funds which
246	concern the following:
247	(a)  Notification of custody of, maintenance of, and
248	safeguards for client funds.
249	(b)  Communications with clients and independent
250	representatives.
251	(c)  Requirements for investment advisers who have custody
252	of pooled investments.
253	(d)  Exceptions to the custody requirements.
254
255	In adopting the rules, the commission shall consider the rules
256	and regulations of the federal regulatory authority and the
257	North American Securities Administrators Association.
258	(2)  The commission shall by rule establish rules of
259	conduct and prohibited business practices for investment
260	advisers and their associated persons. In adopting the rules,
261	the commission shall consider general industry standards as
262	expressed in the rules and regulations of the various federal
263	and self-regulatory agencies and regulatory associations,
264	including, but not limited to, the United States Securities and
265	Exchange Commission, the National Association of Securities
266	Dealers, and the North American Securities Administrators
267	Association.
268	Section 5.  Section 517.1217, Florida Statutes, is created
269	to read:
270	517.1217  Prohibited business practices and rules of
271	conduct for dealers and their associated persons.--The
272	commission by rule may establish rules of conduct and prohibited
273	business practices for dealers and their associated persons. In
274	adopting the rules, the commission shall consider general
275	industry standards as expressed in the rules and regulations of
276	the various federal and self-regulatory agencies and regulatory
277	associations, including, but not limited to, the United States
278	Securities and Exchange Commission, the National Association of
279	Securities Dealers, the stock exchanges, and the North American
280	Securities Administrators Association.
281	Section 6.  Paragraph (a) of subsection (7) of section
282	624.501, Florida Statutes, is amended to read:
283	624.501  Filing, license, appointment, and miscellaneous
284	fees.--The department, commission, or office, as appropriate,
285	shall collect in advance, and persons so served shall pay to it
286	in advance, fees, licenses, and miscellaneous charges as
287	follows:
288	(7)  Life insurance agents.
289	(a)  Agent's original appointment and biennial renewal or
290	continuation thereof, each insurer or agent making an
291	appointment:
292	Appointment fee.............................$42.00
293	State tax....................................12.00
294	County tax....................................6.00
295	Total.......................................$60.00
296	Section 7.  Subsection (10) of section 626.015, Florida
297	Statutes, is amended to read:
298	626.015  Definitions.--As used in this part:
299	(10)  "Life agent" means an individual representing an
300	insurer as to life insurance and annuity contracts, or acting as
301	a viatical settlement broker as defined in s. 626.9911,
302	including agents appointed to transact life insurance, fixed-
303	dollar annuity contracts, or variable contracts by the same
304	insurer.
305	Section 8.  Paragraph (b) of subsection (1) of section
306	626.112, Florida Statutes, is amended to read:
307	626.112  License and appointment required; agents, customer
308	representatives, adjusters, insurance agencies, service
309	representatives, managing general agents.--
310	(1)
311	(b)  Except as provided in subsection (6) or in applicable
312	department rules, and in addition to other conduct described in
313	this chapter with respect to particular types of agents, a
314	license as an insurance agent, service representative, customer
315	representative, or limited customer representative is required
316	in order to engage in the solicitation of insurance. For
317	purposes of this requirement, as applicable to any of the
318	license types described in this section, the solicitation of
319	insurance is the attempt to persuade any person to purchase an
320	insurance product by:
321	1.  Describing the benefits or terms of insurance coverage,
322	including premiums or rates of return;
323	2.  Distributing an invitation to contract to prospective
324	purchasers;
325	3.  Making general or specific recommendations as to
326	insurance products;
327	4.  Completing orders or applications for insurance
328	products; or
329	5.  Comparing insurance products, advising as to insurance
330	matters, or interpreting policies or coverages; or
331	6.  Offering or attempting to negotiate on behalf of
332	another person a viatical settlement contract as defined in s.
333	626.9911.
334
335	However, an employee leasing company licensed pursuant to
336	chapter 468 which is seeking to enter into a contract with an
337	employer that identifies products and services offered to
338	employees may deliver proposals for the purchase of employee
339	leasing services to prospective clients of the employee leasing
340	company setting forth the terms and conditions of doing
341	business; classify employees as permitted by s. 468.529; collect
342	information from prospective clients and other sources as
343	necessary to perform due diligence on the prospective client and
344	to prepare a proposal for services; provide and receive
345	enrollment forms, plans, and other documents; and discuss or
346	explain in general terms the conditions, limitations, options,
347	or exclusions of insurance benefit plans available to the client
348	or employees of the employee leasing company were the client to
349	contract with the employee leasing company. Any advertising
350	materials or other documents describing specific insurance
351	coverages must identify and be from a licensed insurer or its
352	licensed agent or a licensed and appointed agent employed by the
353	employee leasing company. The employee leasing company may not
354	advise or inform the prospective business client or individual
355	employees of specific coverage provisions, exclusions, or
356	limitations of particular plans. As to clients for which the
357	employee leasing company is providing services pursuant to s.
358	468.525(4), the employee leasing company may engage in
359	activities permitted by ss. 626.7315, 626.7845, and 626.8305,
360	subject to the restrictions specified in those sections. If a
361	prospective client requests more specific information concerning
362	the insurance provided by the employee leasing company, the
363	employee leasing company must refer the prospective business
364	client to the insurer or its licensed agent or to a licensed and
365	appointed agent employed by the employee leasing company.
366	Section 9.  Section 626.207, Florida Statutes, is amended
367	to read:
368	626.207  Department rulemaking authority; waiting periods
369	for applicants; penalties against licensees.--
370	(1)  The department shall adopt rules establishing specific
371	waiting periods for applicants to become eligible for licensure
372	following denial, suspension, or revocation pursuant to s.
373	626.611, s. 626.621, s. 626.8437, s. 626.844, s. 626.935, s.
374	626.9917, s. 634.181, s. 634.191, s. 634.320, s. 634.321, s.
375	634.422, s. 634.423, s. 642.041, or s. 642.043. The purpose of
376	the waiting periods is to provide sufficient time to demonstrate
377	reformation of character and rehabilitation. The waiting periods
378	shall vary based on the type of conduct and the length of time
379	since the conduct occurred and shall also be based on the
380	probability that the propensity to commit illegal conduct has
381	been overcome. The waiting periods may be adjusted based on
382	aggravating and mitigating factors established by rule and
383	consistent with this purpose.
384	(2)  The department shall adopt rules establishing specific
385	penalties against licensees for violations of s. 626.611, s.
386	626.621, s. 626.8437, s. 626.844, s. 626.935, s. 626.9917, s.
387	634.181, s. 634.191, s. 634.320, s. 634.321, s. 634.422, s.
388	634.423, s. 642.041, or s. 642.043. The purpose of the
389	revocation or suspension is to provide a sufficient penalty to
390	deter future violations of the Florida Insurance Code. The
391	imposition of a revocation or the length of suspension shall be
392	based on the type of conduct and the probability that the
393	propensity to commit further illegal conduct has been overcome
394	at the time of eligibility for relicensure. The revocation or
395	the length of suspension may be adjusted based on aggravating or
396	mitigating factors, established by rule and consistent with this
397	purpose.
398	Section 10.  Subsection (2) of section 626.331, Florida
399	Statutes, is amended to read:
400	626.331  Number of appointments permitted or required.--
401	(2)  An agent shall be required to have a separate
402	appointment as to each insurer by whom he or she is appointed as
403	an agent. An agent must appoint himself or herself before
404	performing the functions of a viatical settlement broker.
405	Section 11.  Subsection (17) is added to section 626.611,
406	Florida Statutes, to read:
407	626.611  Grounds for compulsory refusal, suspension, or
408	revocation of agent's, title agency's, adjuster's, customer
409	representative's, service representative's, or managing general
410	agent's license or appointment.--The department shall deny an
411	application for, suspend, revoke, or refuse to renew or continue
412	the license or appointment of any applicant, agent, title
413	agency, adjuster, customer representative, service
414	representative, or managing general agent, and it shall suspend
415	or revoke the eligibility to hold a license or appointment of
416	any such person, if it finds that as to the applicant, licensee,
417	or appointee any one or more of the following applicable grounds
418	exist:
419	(17)  In transactions related to viatical settlement
420	contracts as defined in s. 626.9911:
421	(a)  Commission of a fraudulent or dishonest act.
422	(b)  No longer meeting the requirements for initial
423	licensure.
424	(c)  Having received a fee, commission, or other valuable
425	consideration for his or her services with respect to viatical
426	settlements that involved unlicensed viatical settlement
427	providers or persons who offered or attempted to negotiate on
428	behalf of another person a viatical settlement contract as
429	defined in s. 626.9911 and who were not licensed life agents.
430	(d)  Dealing in bad faith with viators.
431	Section 12.  Section 626.777, Florida Statutes, is amended
432	to read:
433	626.777  Scope of this part.--This part applies only to
434	agents of life insurers, and to agents who are appointed by the
435	same insurer as to both life insurance and health insurance, and
436	agents who perform the functions of a viatical settlement broker
437	as defined in s. 626.9911.
438	Section 13.  Subsection (2) of section 626.7845, Florida
439	Statutes, is amended to read:
440	626.7845  Prohibition against unlicensed transaction of
441	life insurance.--
442	(2)  Except as provided in s. 626.112(6), with respect to
443	any line of authority specified in s. 626.015(10), no individual
444	shall, unless licensed as a life agent:
445	(a)  Solicit insurance or annuities or procure
446	applications; or
447	(b)  In this state, engage or hold himself or herself out
448	as engaging in the business of analyzing or abstracting
449	insurance policies or of counseling or advising or giving
450	opinions to persons relative to insurance or insurance contracts
451	other than:
452	1.  As a consulting actuary advising an insurer; or
453	2.  As to the counseling and advising of labor unions,
454	associations, trustees, employers, or other business entities,
455	the subsidiaries and affiliates of each, relative to their
456	interests and those of their members or employees under
457	insurance benefit plans; or
458	(c)  In this state, from this state, or with a resident of
459	this state, offer or attempt to negotiate on behalf of another
460	person a viatical settlement contract as defined in s. 626.9911.
461	Section 14.  Section 626.9911, Florida Statutes, is amended
462	to read:
463	626.9911  Definitions.--As used in this act, the term:
464	(1)(14)  "Financing entity" means an underwriter, placement
465	agent, lender, purchaser of securities, or purchaser of a policy
466	or certificate from a viatical settlement provider, credit
467	enhancer, or any entity that has direct ownership in a policy or
468	certificate that is the subject of a viatical settlement
469	contract, but whose principal activity related to the
470	transaction is providing funds or credit enhancement to effect
471	the viatical settlement or the purchase of one or more
472	viaticated viatical policies and who has an agreement in writing
473	with one or more licensed viatical settlement providers to
474	finance the acquisition of viatical settlement contracts. The
475	term does not include a nonaccredited investor, a viatical
476	settlement purchaser, or other natural person. A financing
477	entity may not enter into a viatical settlement contract.
478	(2)(1)  "Independent third-party trustee or escrow agent"
479	means an attorney, certified public accountant, financial
480	institution, or other person providing escrow services under the
481	authority of a regulatory body. The term does not include any
482	person associated, affiliated, or under common control with a
483	viatical settlement provider or viatical settlement broker.
484	(3)  "Life expectancy" means an opinion or evaluation as to
485	how long a particular person is to live, or relating to such
486	person's expected demise.
487	(4)  "Life expectancy provider" means a person who
488	determines, or holds himself or herself out as determining, life
489	expectancies or mortality ratings used to determine life
490	expectancies:
491	(a)  On behalf of a viatical settlement provider, viatical
492	settlement broker, life agent, or a person engaged in the
493	business of viatical settlements;
494	(b)  In connection with a viatical settlement investment,
495	pursuant to s. 517.021(22); or
496	(c)  On residents of this state in connection with a
497	viatical settlement contract or viatical settlement investment.
498	(5)(2)  "Person" has the meaning specified in s. 1.01.
499	(6)(12)  "Related form" means any form, created by or on
500	behalf of a licensee, which a viator or viatical settlement
501	purchaser is required to sign or initial. The forms include, but
502	are not limited to, a power of attorney, a release of medical
503	information form, a suitability questionnaire, a disclosure
504	document, or any addendum, schedule, or amendment to a viatical
505	settlement contract or viatical settlement purchase agreement
506	considered necessary by a provider to effectuate a viatical
507	settlement transaction.
508	(7)  "Related provider trust" means a titling trust or
509	other trust established by a licensed viatical settlement
510	provider or financing entity for the sole purpose of holding the
511	ownership or beneficial interest in purchased policies in
512	connection with a financing transaction. The trust must have a
513	written agreement with a licensed viatical settlement provider
514	or financing entity under which the licensed viatical settlement
515	provider or financing entity is responsible for insuring
516	compliance with all statutory and regulatory requirements and
517	under which the trust agrees to make all records and files
518	relating to viatical settlement transactions available to the
519	office as if those records and files were maintained directly by
520	the licensed viatical settlement provider. This term does not
521	include an independent third-party trustee or escrow agent or a
522	trust that does not enter into agreements with a viator. A
523	related provider trust shall be subject to all provisions of
524	this act that apply to the viatical settlement provider who
525	established the related provider trust, except s. 626.9912,
526	which shall not be applicable. A viatical settlement provider
527	may establish no more than one related provider trust, and the
528	sole trustee of such related provider trust shall be the
529	viatical settlement provider licensed under s. 626.9912. The
530	name of the licensed viatical settlement provider shall be
531	included within the name of the related provider trust.
532	(8)(13)  "Special purpose entity" means an entity
533	established by a licensed viatical settlement provider or by a
534	financing entity, which may be a corporation, partnership,
535	trust, limited liability company, or other similar entity formed
536	solely to provide, either directly or indirectly, access to
537	institutional capital markets to a viatical settlement provider
538	or financing entity. A special purpose entity shall not enter
539	into a viatical settlement contract or a viatical settlement
540	purchase agreement.
541	(9)(3)  "Viatical settlement broker" means a person who, on
542	behalf of a viator and for a fee, commission, or other valuable
543	consideration, offers or attempts to negotiate viatical
544	settlement contracts between a viator resident in this state and
545	one or more viatical settlement providers. Notwithstanding the
546	manner in which the viatical settlement broker is compensated, a
547	viatical settlement broker is deemed to represent only the
548	viator and owes a fiduciary duty to the viator to act according
549	to the viator's instructions and in the best interest of the
550	viator. The term does not include an attorney, licensed
551	Certified Public Accountant, or investment adviser lawfully
552	registered under chapter 517, who is retained to represent the
553	viator and whose compensation is paid directly by or at the
554	direction and on behalf of the viator.
555	(10)(4)  "Viatical settlement contract" means a written
556	agreement entered into between a viatical settlement provider,
557	or its related provider trust, and a viator. The viatical
558	settlement contract includes an agreement to transfer ownership
559	or change the beneficiary designation of a life insurance policy
560	at a later date, regardless of the date that compensation is
561	paid to the viator. The agreement must establish the terms under
562	which the viatical settlement provider will pay compensation or
563	anything of value, which compensation or value is less than the
564	expected death benefit of the insurance policy or certificate,
565	in return for the viator's assignment, transfer, sale, devise,
566	or bequest of the death benefit or ownership of all or a portion
567	of the insurance policy or certificate of insurance to the
568	viatical settlement provider. A viatical settlement contract
569	also includes a contract for a loan or other financial
570	transaction secured primarily by an individual or group life
571	insurance policy, other than a loan by a life insurance company
572	pursuant to the terms of the life insurance contract, or a loan
573	secured by the cash value of a policy.
574	(11)  "Viatical settlement investment" has the same meaning
575	as specified in s. 517.021.
576	(12)(5)  "Viatical settlement provider" means a person who,
577	in this state, from this state, or with a resident of this
578	state, effectuates a viatical settlement contract. The term does
579	not include:
580	(a)  Any bank, savings bank, savings and loan association,
581	credit union, or other licensed lending institution that takes
582	an assignment of a life insurance policy as collateral for a
583	loan.
584	(b)  A life and health insurer that has lawfully issued a
585	life insurance policy that provides accelerated benefits to
586	terminally ill policyholders or certificateholders.
587	(c)  Any natural person who enters into no more than one
588	viatical settlement contract with a viator in 1 calendar year,
589	unless such natural person has previously been licensed under
590	this act or is currently licensed under this act.
591	(d)  A trust that meets the definition of a "related
592	provider trust."
593	(e)  A viator in this state.
594	(f)  A viatical settlement purchaser.
595	(f)(g)  A financing entity.
596	(13)(11)  "Viaticated policy" means a life insurance
597	policy, or a certificate under a group policy, which is the
598	subject of a viatical settlement contract.
599	(14)(6)  "Viator" means the owner of a life insurance
600	policy or a certificateholder under a group policy, which policy
601	is not a previously viaticated policy, who enters or seeks to
602	enter into a viatical settlement contract. This term does not
603	include a viatical settlement purchaser or a viatical settlement
604	provider or any person acquiring a policy or interest in a
605	policy from a viatical settlement provider, nor does it include
606	an independent third-party trustee or escrow agent.
607	(8)  "Viatical settlement purchase agreement" means a
608	contract or agreement, entered into by a viatical settlement
609	purchaser, to which the viator is not a party, to purchase a
610	life insurance policy or an interest in a life insurance policy,
611	which is entered into for the purpose of deriving an economic
612	benefit. The term also includes purchases made by viatical
613	settlement purchasers from any person other than the provider
614	who effectuated the viatical settlement contract.
615	(9)  "Viatical settlement purchaser" means a person who
616	gives a sum of money as consideration for a life insurance
617	policy or an equitable or legal interest in the death benefits
618	of a life insurance policy that has been or will be the subject
619	of a viatical settlement contract, for the purpose of deriving
620	an economic benefit, including purchases made from any person
621	other than the provider who effectuated the viatical settlement
622	contract or an entity affiliated with the provider. The term
623	does not include a licensee under this part, an accredited
624	investor as defined in Rule 501, Regulation D of the Securities
625	Act Rules, or a qualified institutional buyer as defined by Rule
626	144(a) of the Federal Securities Act, a special purpose entity,
627	a financing entity, or a contingency insurer. The above
628	references to Rule 501, Regulation D and Rule 144(a) of the
629	Federal Securities Act are used strictly for defining purposes
630	and shall not be interpreted in any other manner. Any person who
631	claims to be an accredited investor shall sign an affidavit
632	stating that he or she is an accredited investor, the basis of
633	that claim, and that he or she understands that as an accredited
634	investor he or she will not be entitled to certain protections
635	of the Viatical Settlement Act. This affidavit must be kept with
636	other documents required to be maintained by this act.
637	(10)  "Viatical settlement sales agent" means a person
638	other than a licensed viatical settlement provider who arranges
639	the purchase through a viatical settlement purchase agreement of
640	a life insurance policy or an interest in a life insurance
641	policy.
642	Section 15.  Paragraph (f) of subsection (3) and subsection
643	(4) of section 626.9912, Florida Statutes, are amended,
644	paragraph (g) of subsection (3) of said section is redesignated
645	as paragraph (h), and new paragraph (g) is added to said
646	subsection, to read:
647	626.9912  Viatical settlement provider license required;
648	application for license.--
649	(3)  In the application, the applicant must provide all of
650	the following:
651	(f)  All applications, viatical settlement contract forms,
652	viatical settlement purchase agreement forms, escrow forms, and
653	other related forms proposed to be used by the applicant.
654	(g)  A general description of the method the viatical
655	settlement provider will use in determining life expectancies,
656	including a description of the applicant's intended receipt of
657	life expectancies, the applicant's intended use of life
658	expectancy providers, and the written plan or plans of policies
659	and procedures used to determine life expectancies.
660	(4)  The office may not issue a license to an entity other
661	than a natural person if it is not satisfied that all officers,
662	directors, employees, stockholders, partners, and any other
663	persons who exercise or have the ability to exercise effective
664	control of the entity or who have the ability to influence the
665	transaction of business by the entity meet the standards of this
666	act and have not violated any provision of this act or rules of
667	the commission related to the business of viatical settlement
668	contracts or viatical settlement purchase agreements.
669	Section 16.  Section 626.9913, Florida Statutes, is amended
670	to read:
671	626.9913  Viatical settlement provider license continuance;
672	annual report; fees; deposit.--
673	(1)  A viatical settlement provider license continues in
674	force until suspended or revoked.
675	(2)  Annually, on or before March 1, the viatical
676	settlement provider licensee shall file a statement containing
677	information the commission requires and shall pay to the office
678	a license fee in the amount of $500. The annual statement shall
679	include audited financial statements prepared in accordance with
680	generally accepted accounting principles by an independent
681	certified public accountant as of the last day of the preceding
682	calendar year. The annual statement shall also provide the
683	office with a report of all life expectancy providers who have
684	provided life expectancies, directly or indirectly, to the
685	viatical settlement provider for use in connection with a
686	viatical settlement contract or a viatical settlement
687	investment. A viatical settlement provider shall include in all
688	statements filed with the office all information requested by
689	the office regarding a related provider trust established by the
690	viatical settlement provider. The office may require more
691	frequent reporting. Failure to timely file the annual statement
692	or to timely pay the license fee is grounds for immediate
693	suspension of the license.
694	(3)  To ensure the faithful performance of its obligations
695	to its viators in the event of insolvency or the loss of its
696	license, a viatical settlement provider licensee must deposit
697	and maintain deposited in trust with the department securities
698	eligible for deposit under s. 625.52, having at all times a
699	value of not less than $100,000, provided a viatical settlement
700	provider licensed prior to June 1, 2004, that has deposited and
701	maintains continuously deposited in trust with the department
702	securities in the amount of $25,000 and which posted and
703	maintains continuously posted a security bond acceptable to the
704	department in the amount of $75,000, has until June 1, 2005, to
705	comply with the requirements of this subsection. As an
706	alternative to meeting the $100,000 deposit requirement, the
707	provider may deposit and maintain deposited in trust with the
708	department such securities in the amount of $25,000 and post
709	with the office a surety bond acceptable to the office in the
710	amount of $75,000.
711	(4)  There shall be no additional annual license fee or
712	deposit requirements under this act for a related provider trust
713	established by a viatical settlement provider.
714	(5)  A judgment creditor or other claimant of a viatical
715	settlement provider may not levy upon any of the assets or
716	securities held in this state pursuant to this section.
717	Section 17.  Subsection (1) of section 626.9914, Florida
718	Statutes, is amended to read:
719	626.9914  Suspension, revocation, or nonrenewal of viatical
720	settlement provider license; grounds; administrative fine.--
721	(1)  The office shall suspend, revoke, deny, or refuse to
722	renew the license of any viatical settlement provider if the
723	office finds that the licensee:
724	(a)  Has made a misrepresentation in the application for
725	the license;
726	(b)  Has engaged in fraudulent or dishonest practices, or
727	otherwise has been shown to be untrustworthy or incompetent to
728	act as a viatical settlement provider;
729	(c)  Demonstrates a pattern of unreasonable payments to
730	viators;
731	(d)  Has been found guilty of, or has pleaded guilty or
732	nolo contendere to, any felony, or a misdemeanor involving fraud
733	or moral turpitude, regardless of whether a judgment of
734	conviction has been entered by the court;
735	(e)  Has issued viatical settlement contracts that have not
736	been approved pursuant to this act;
737	(f)  Has failed to honor contractual obligations related to
738	the business of viatical settlement contracts;
739	(g)  Deals in bad faith with viators;
740	(h)  Has violated any provision of the insurance code or of
741	this act;
742	(i)  Employs any person who materially influences the
743	licensee's conduct and who fails to meet the requirements of
744	this act; or
745	(j)  No longer meets the requirements for initial
746	licensure; or
747	(k)  Obtains or uses life expectancies from life expectancy
748	providers who are not registered with the office pursuant to
749	this act.
750	Section 18.  Section 626.9916, Florida Statutes, is amended
751	to read:
752	626.9916  Viatical settlement broker and life agent license
753	required; application for license.--
754	(1)  After July 1, 2006 1996, a person, other than a life
755	agent licensed under this chapter, may not in this state, from
756	this state, or with a resident of this state perform the
757	functions of a viatical settlement broker as defined in this act
758	without first having obtained a license from the department.
759	(2)  Before performing the functions of a viatical
760	settlement broker, a life agent shall appoint himself or herself
761	with the department and pay applicable fees pursuant to s.
762	624.501(7)(a). Application for a viatical settlement broker
763	license must be made to the department by the applicant on a
764	form prescribed by the department, under oath, and signed by the
765	applicant. The application must be accompanied by a $50 filing
766	fee. If the applicant is a corporation, the application must be
767	under oath and signed by the president and the secretary of the
768	corporation.
769	(3)  Each natural person who on July 1, 2005, held a
770	viatical settlement broker's license and self-appointment may,
771	upon obtaining a life agent license on or before July 1, 2006,
772	transfer an existing broker self-appointment to such license. In
773	the application, the applicant must provide all of the
774	following:
775	(a)  The applicant's full name, age, residence address, and
776	business address, and all occupations engaged in by the
777	applicant during the 5 years preceding the date of the
778	application; if the applicant is not a natural person, the
779	applicant must provide the information required by this
780	paragraph with respect to all officers, directors, or partners.
781	(b)  A copy of the applicant's basic organizational
782	documents, if any, including the articles of incorporation,
783	articles of association, partnership agreement, trust agreement,
784	or other similar documents, together with all amendments to such
785	documents.
786	(c)  If the applicant is not a natural person, a list
787	showing the name, business and residence addresses, and official
788	position of each individual who is responsible for conduct of
789	the applicant's affairs, including, but not limited to, any
790	member of the applicant's board of directors, board of trustees,
791	executive committee, or other governing board or committee and
792	any other person or entity owning or having the right to acquire
793	10 percent or more of the voting securities of the applicant.
794	(d)  With respect to an individual applicant and with
795	respect to each individual identified under paragraph (c):
796	1.  A sworn biographical statement on forms supplied by the
797	department.
798	2.  A set of fingerprints on forms prescribed by the
799	department, certified by a law enforcement officer, and
800	accompanied by the fingerprinting fee specified in s. 624.501.
801	3.  Authority, if required by the department, for release
802	of information relating to the investigation of the individual's
803	background.
804	(e)  Such other information as the department deems
805	necessary to determine that the individual applicant and the
806	individuals identified under paragraph (c) are competent and
807	trustworthy and can lawfully and successfully act as a viatical
808	settlement provider.
809	(4)  All viatical settlement broker licenses shall
810	terminate on July 1, 2006, and shall not be subject to
811	continuation or renewal. Any natural person who is employed by
812	or otherwise represents a viatical settlement broker licensee,
813	which broker licensee is not a natural person, must also be
814	licensed as a viatical settlement broker if such employee or
815	other representative performs the functions of a viatical
816	settlement broker as defined in this act.
817	(5)  Notwithstanding the manner in which the viatical
818	settlement broker is compensated, he or she is deemed to
819	represent only the viator and owes a fiduciary duty to the
820	viator to act according to the viator's instructions and in the
821	best interest of the viator. The department may not issue a
822	license to an applicant if it is not satisfied that the
823	applicant, if a natural person, or all officers, directors,
824	employees, stockholders, and partners who exercise or have the
825	ability to exercise effective control of the applicant or who
826	have the ability to influence the transaction of business by the
827	applicant, if the applicant is not a natural person, meet the
828	standards of this act and have not violated any provision of
829	this act or rules of the department related to the business of
830	viatical settlement contracts.
831	(6)  The compensation received by a life agent for
832	activities performed as a viatical settlement broker may not be
833	divided or shared with another person unless such other person
834	is a life agent licensed under this chapter and appointed as
835	provided in this part. The department may specify the form of
836	the license and may require photographing of the applicant as
837	part of the application process.
838	(7)  Upon the filing of a sworn application and the payment
839	of the license fee and all other applicable fees under this act,
840	the department shall investigate each applicant and may issue
841	the applicant a license if the department finds that the
842	applicant:
843	(a)  Is competent and trustworthy and intends to act in
844	good faith in the business authorized by the license applied
845	for.
846	(b)  Has a good business reputation and has had experience,
847	training, or education that qualifies the applicant to conduct
848	the business authorized by the license applied for.
849	(c)  Except with respect to applicants for nonresident
850	licenses, is a bona fide resident of this state and actually
851	resides in this state at least 180 days a year. If an applicant
852	holds a similar license or an insurance agent's or broker's
853	license in another state at the time of applying for a license
854	under this section, the applicant may be found to meet the
855	residency requirement of this paragraph only after he or she
856	furnishes a letter of clearance satisfactory to the department
857	or other proof that the applicant's resident licenses have been
858	canceled or changed to nonresident status and that the applicant
859	is in good standing with the licensing authority.
860	(d)  Is a corporation, a corporation incorporated under the
861	laws of this state, or a foreign corporation authorized to
862	transact business in this state.
863	(e)  Has designated the Chief Financial Officer as its
864	agent for service of process.
865	(f)  If a natural person, is at least 18 years of age and a
866	United States citizen or legal alien who possesses work
867	authorization from the United States Bureau of Citizenship and
868	Immigration Services.
869	(8)  An applicant for a nonresident viatical settlement
870	broker license must, in addition to designating the Chief
871	Financial Officer as agent for service of process as required by
872	this section, also furnish the department with the name and
873	address of a resident of this state upon whom notices or orders
874	of the department or process affecting the applicant or licensee
875	may be served. After issuance of the license, the licensee must
876	also notify the department of change of the person to receive
877	such notices, orders, or process; such change is not effective
878	until acknowledged by the department.
879	(9)  The department may, by rule, specify experience,
880	educational, or other training standards required for licensure
881	under this section.
882	(10)  Except as otherwise provided in this section,
883	viatical settlement brokers shall be licensed, appointed,
884	renewed, continued, reinstated, and terminated in the manner
885	specified in this chapter for insurance representatives
886	generally; however, viatical settlement brokers are not subject
887	to continuing education requirements.
888	Section 19.  Section 626.99175, Florida Statutes, is
889	created to read:
890	626.99175  Life expectancy providers; registration
891	required; denial, suspension, revocation.--
892	(1)  After July 1, 2006, a person may not perform the
893	functions of a life expectancy provider without first having
894	registered as a life expectancy provider, except as provided in
895	subsection (6).
896	(2)  Application for registration as a life expectancy
897	provider must be made to the office by the applicant on a form
898	prescribed by the office, under oath and signed by the
899	applicant. The application must be accompanied by a fee of $500.
900	(3)  A completed application shall be evidenced on a form
901	and in a manner prescribed by the office and shall require the
902	registered life expectancy provider to update such information
903	and renew such registration as required by the office.
904	(4)  In the application, the applicant must provide all of
905	the following:
906	(a)  The full name, age, residence address, and business
907	address and all occupations engaged in by the applicant during
908	the 5 years preceding the date of the application.
909	(b)  A copy of the applicant's basic organizational
910	documents, if any, including the articles of incorporation,
911	articles of association, partnership agreement, trust agreement,
912	or other similar documents, together with all amendments to such
913	documents.
914	(c)  Copies of all bylaws, rules, regulations, or similar
915	documents regulating the conduct of the applicant's internal
916	affairs.
917	(d)  A list showing the name, business and residence
918	addresses, and official position of each individual who is
919	responsible for conduct of the applicant's affairs, including,
920	but not limited to, any member of the board of directors, board
921	of trustees, executive committee, or other governing board or
922	committee and any other person or entity owning or having the
923	right to acquire 10 percent or more of the voting securities of
924	the applicant, and any person performing life expectancies by
925	the applicant.
926	(e)  A sworn biographical statement on forms supplied by
927	the office with respect to each individual identified under
928	paragraph (d), including whether such individual has been
929	associated with any other life expectancy provider or has
930	performed any services for a person in the business of viatical
931	settlements.
932	(f)  A sworn statement of any criminal and civil actions
933	pending or final against the registrant or any individual
934	identified under paragraph (d).
935	(g)  A description of the policies and procedures covering
936	all life expectancy determination criteria and protocols,
937	including only the following:
938	1.  The plan or plans of policies and procedures used to
939	determine life expectancies.
940	2.  A description of the training, including continuing
941	training, of the individuals who determine life expectancies.
942	3.  A description of how the life expectancy provider
943	updates its manuals, underwriting guides, mortality tables and
944	other reference works and ensures that the provider bases its
945	determination of life expectancies on current data.
946	(h)  A plan for assuring confidentiality of personal,
947	medical, and financial information in accordance with federal
948	and state laws.
949	(i)  An anti-fraud plan as required pursuant to s.
950	626.99278.
951	(j)  A list of any agreements, contracts, or any other
952	arrangement to provide life expectancies to a viatical
953	settlement provider, viatical settlement broker, or any other
954	person in the business of viatical settlements in connection
955	with any viatical settlement contract or viatical settlement
956	investment.
957	(5)  As part of the application, and on or before March 1
958	every 3 years thereafter, a registered life expectancy provider
959	shall file with the office an audit of all life expectancies by
960	the life expectancy provider for the 5 calendar years
961	immediately preceding such audit, which audit shall be conducted
962	and certified by a nationally recognized actuarial firm and
963	shall only include the following:
964	(a)  A mortality table.
965	(b)  The number, percentage, and an actual-to-expected
966	ratio of life expectancies in the following categories: life
967	expectancies of less than 24 months, life expectancies of 25
968	months to 48 months, life expectancies of 49 months to 72
969	months, life expectancies of 73 months to 108 months, life
970	expectancies of 109 months to 144 months, life expectancies of
971	145 months to 180 months, and life expectancies of more than 180
972	months.
973	(6)  The life expectancy provider who is a subsidiary or
974	affiliate of an insurance company licensed in this state shall
975	be deemed to meet the registration requirements of this section
976	and may provide life expectancies or operate as a life
977	expectancy provider pursuant to this act.
978	(7)  No viatical settlement broker, viatical settlement
979	provider, or insurance agent in the business of viatical
980	settlements in this state shall directly or indirectly own or be
981	an officer, director, or employee of a life expectancy provider.
982	(8)  Each registered life expectancy provider shall provide
983	the office, as applicable, at least 30 days' advance notice of
984	any change in the registrants name, residence address, principal
985	business address, or mailing address.
986	(9)  A person required to be registered by this section
987	shall for 5 years retain copies of all life expectancies and
988	supporting documents and medical records unless those personal
989	medical records are subject to different retention or
990	destruction requirements of a federal or state personal health
991	information law.
992	(10)  An application for life expectancy provider
993	registration shall be approved or denied by the commissioner
994	within 60 calendar days following receipt of a completed
995	application by the commissioner. The office shall notify the
996	applicant that the application is complete. A completed
997	application that is not approved or denied in 60 calendar days
998	following its receipt shall be deemed approved.
999	(11)  The office may, in its discretion, deny the
1000	application for a life expectancy provider registration or
1001	suspend, revoke, or refuse to renew or continue the registration
1002	of a life expectancy provider if the office finds:
1003	(a)  Any cause for which registration could have been
1004	refused had it then existed and been known to the office;
1005	(b)  A violation of any provision of this code or of any
1006	other law applicable to the applicant or registrant;
1007	(c)  A violation of any lawful order or rule of the
1008	department, commission, or office; or
1009	(d)  The applicant or registrant:
1010	1.  Has been found guilty of or pled guilty or nolo
1011	contendere to a felony or a crime punishable by imprisonment of
1012	1 year or more under the law of the United States of America or
1013	of any state thereof or under the law of any other country;
1014	2.  Knowingly and willfully aided, assisted, procured,
1015	advised, or abetted any person in the violation of or to violate
1016	a provision of the insurance code or any order or rule of the
1017	department, commission, or office;
1018	3.  Knowingly and with intent to defraud, provided a life
1019	expectancy that does not conform to a applicant's or
1020	registrant's general practice;
1021	4.  Does not have a good business reputation or does not
1022	have experience, training, or education that qualifies the
1023	applicant or registrant to conduct the business of a life
1024	expectancy provider; or
1025	5.  Demonstrated lack of fitness or trustworthiness to
1026	engage in the business of issuing life expectancies.
1027	(12)  The office may, in lieu of or in addition to any
1028	suspension or revocation, assess an administrative fine not to
1029	exceed $2,500 for each nonwillful violation or $10,000 for each
1030	willful violation by a registered life expectancy provider. The
1031	office may also place a registered life expectancy provider on
1032	probation for a period not to exceed 2 years.
1033	(13)  It is a violation of this section for a person to
1034	represent, orally or in writing, that the fact that a life
1035	expectancy provider is registered pursuant to this act in any
1036	way is a recommendation or approval of the entity or that it
1037	means the qualifications or abilities have in any way been
1038	approved of.
1039	Section 20.  Section 626.9919, Florida Statutes, is amended
1040	to read:
1041	626.9919  Notice of change of licensee or registrant
1042	address or name.--Each viatical settlement provider licensee and
1043	registered life expectance provider, viatical settlement broker
1044	licensee, and viatical settlement sales agent licensee must
1045	provide the office or department, as applicable, at least 30
1046	days' advance notice of any change in the licensee's or
1047	registrant's name, residence address, principal business
1048	address, or mailing address.
1049	Section 21.  Section 626.992, Florida Statutes, is amended
1050	to read:
1051	626.992  Use of licensed viatical settlement providers,
1052	viatical settlement licensed brokers, and registered life
1053	expectancy providers, and sales agents required.--
1054	(1)  A licensed viatical settlement provider may not use
1055	any person to perform the functions of a viatical settlement
1056	broker as defined in this act unless such person holds a
1057	current, valid life agent license and has appointed himself or
1058	herself in conformance with this chapter as a viatical
1059	settlement broker. Salaried individuals employed by viatical
1060	settlement providers shall engage in viatical settlement broker
1061	activities only when accompanied by a viatical settlement broker
1062	who holds a current valid license issued under this act. A
1063	viatical settlement provider may not use any person to perform
1064	the functions of a viatical settlement sales agent unless the
1065	person holds a current, valid license as provided in subsection
1066	(4).
1067	(2)  A licensed viatical settlement broker may not use any
1068	person to perform the functions of a viatical settlement
1069	provider as defined in this act unless such person holds a
1070	current, valid license as a viatical settlement provider.
1071	(3)  After July 1, 2006, a person viatical settlement sales
1072	agent may not operate as life expectancy provider use any person
1073	to perform the functions of a viatical settlement broker unless
1074	such person is registered as a life expectancy provider pursuant
1075	to this chapter holds a current, valid license as a viatical
1076	settlement broker.
1077	(4)  After July 1, 2006, a person may not perform the
1078	functions of a viatical settlement provider, viatical settlement
1079	broker, or any other person in the business of viatical
1080	settlements may not obtain life expectancies from a person who
1081	is not registered as a life expectancy provider sales agent
1082	unless licensed as a life agent as defined in s. 626.015 and as
1083	provided in this chapter.
1084	Section 22.  Subsections (1) and (2) of section 626.9921,
1085	Florida Statutes, are amended to read:
1086	626.9921  Filing of forms; required procedures; approval.--
1087	(1)  A viatical settlement contract form, viatical
1088	settlement purchase agreement form, escrow form, or related form
1089	may be used in this state only after the form has been filed
1090	with the office and only after the form has been approved by the
1091	office.
1092	(2)  The viatical settlement contract form, viatical
1093	settlement purchase agreement form, escrow form, or related form
1094	must be filed with the office at least 60 days before its use.
1095	The form is considered approved on the 60th day after its date
1096	of filing unless it has been previously disapproved by the
1097	office. The office must disapprove a viatical settlement
1098	contract form, viatical settlement purchase agreement form,
1099	escrow form, or related form that is unreasonable, contrary to
1100	the public interest, discriminatory, or misleading or unfair to
1101	the viator or the purchaser.
1102	Section 23.  Subsection (2) of section 626.9922, Florida
1103	Statutes, is amended, and subsections (5), (6), and (7) are
1104	added to said section, to read:
1105	626.9922  Examination.--
1106	(2)  All accounts, books and records, documents, files,
1107	contracts, and other information relating to all transactions of
1108	viatical settlement contracts, life expectancies, or viatical
1109	settlement purchase agreements made before July 1, 2005, must be
1110	maintained by the licensee for a period of at least 3 years
1111	after the death of the insured and must be available to the
1112	office or department for inspection during reasonable business
1113	hours.
1114	(5)  The office has jurisdiction over all viatical
1115	settlement purchase agreements made before July 1, 2005,
1116	including, but not limited to, the authority to examine persons
1117	in possession of records relating to viatical settlement
1118	purchase agreements made before July 1, 2005, and that authority
1119	set forth in s. 624.319.
1120	(6)  If the office makes the determination that a viatical
1121	settlement provider does not have the financial ability to
1122	perform its present or future obligations under the viatical
1123	settlement purchase agreements made before July 1, 2005, the
1124	office shall make a referral to the United States Securities and
1125	Exchange Commission or the Office of Financial Regulation for
1126	further administrative action pursuant to s. 517.191, including,
1127	but not limited to, the appointment of a receiver by the court.
1128	(7)  Subsections (1), (2), (3), and (4) apply to life
1129	expectancy providers providing life expectancies in the state
1130	and providing life expectancies to viatical settlement providers
1131	in the state, as if life expectancy providers were licensees.
1132	Section 24.  Section 626.99245, Florida Statutes, is
1133	amended to read:
1134	626.99245  Conflict of regulation of viaticals.--
1135	(1)  A viatical settlement provider who from this state
1136	enters into a viatical settlement purchase agreement with a
1137	purchaser who is a resident of another state that has enacted
1138	statutes or adopted regulations governing viatical settlement
1139	purchase agreements, shall be governed in the effectuation of
1140	that viatical settlement purchase agreement by the statutes and
1141	regulations of the purchaser's state of residence. If the state
1142	in which the purchaser is a resident has not enacted statutes or
1143	regulations governing viatical settlement purchase agreements,
1144	the provider shall give the purchaser notice that neither
1145	Florida nor his or her state regulates the transaction upon
1146	which he or she is entering. For transactions in these states,
1147	however, the viatical settlement provider is to maintain all
1148	records required as if the transactions were executed in
1149	Florida. However, the forms used in those states need not be
1150	approved by the office.
1151	(1)(2)  A viatical settlement provider who from this state
1152	enters into a viatical settlement contract with a viator who is
1153	a resident of another state that has enacted statutes or adopted
1154	regulations governing viatical settlement contracts shall be
1155	governed in the effectuation of that viatical settlement
1156	contract by the statutes and regulations of the viator's state
1157	of residence. If the state in which the viator is a resident has
1158	not enacted statutes or regulations governing viatical
1159	settlement agreements, the provider shall give the viator notice
1160	that neither Florida nor his or her state regulates the
1161	transaction upon which he or she is entering. For transactions
1162	in those states, however, the viatical settlement provider is to
1163	maintain all records required as if the transactions were
1164	executed in Florida. The forms used in those states need not be
1165	approved by the office.
1166	(2)(3)  This section does not affect the requirement of ss.
1167	626.9911(12)(5) and 626.9912(1) that a viatical settlement
1168	provider doing business from this state must obtain a viatical
1169	settlement license from the office. As used in this subsection,
1170	the term "doing business from this state" includes effectuating
1171	viatical settlement contracts and effectuating viatical
1172	settlement purchase agreements from offices in this state,
1173	regardless of the state of residence of the viator or the
1174	viatical settlement purchaser.
1175	(4)  The offer, sale, and purchase of viatical settlement
1176	contracts, and the regulation of viatical settlement providers
1177	shall be within the exclusive jurisdiction of the Office of
1178	Insurance Regulation under the provisions of this part.
1179	Section 25.  Section 626.9925, Florida Statutes, is amended
1180	to read:
1181	626.9925  Rules.--The commission may adopt rules to
1182	administer this act, including rules establishing standards for
1183	evaluating advertising by licensees; rules providing for the
1184	collection of data, for disclosures to viators or purchasers,
1185	and for the reporting of life expectancies and the registration
1186	of life expectancy providers; and rules defining terms used in
1187	this act and prescribing recordkeeping requirements relating to
1188	executed viatical settlement contracts and viatical settlement
1189	purchase agreements.
1190	Section 26.  Section 626.9926, Florida Statutes, is amended
1191	to read:
1192	626.9926  Rate regulation not authorized.--Nothing in this
1193	act shall be construed to authorize the office or department to
1194	directly or indirectly regulate the amount paid as consideration
1195	for entry into a viatical settlement contract or viatical
1196	settlement purchase agreement.
1197	Section 27.  Subsection (1) of section 626.9927, Florida
1198	Statutes, is amended to read:
1199	626.9927  Unfair trade practices; cease and desist;
1200	injunctions; civil remedy.--
1201	(1)  A violation of this act is an unfair trade practice
1202	under ss. 626.9521 and 626.9541 and is subject to the penalties
1203	provided in the insurance code. Part IX X of this chapter
1204	applies to a licensee under this act or a transaction subject to
1205	this act as if a viatical settlement contract and a viatical
1206	settlement purchase agreement were an insurance policy.
1207	Section 28.  Paragraph (b) of subsection (1) of section
1208	626.99275, Florida Statutes, is amended, and paragraph (d) is
1209	added to said subsection, to read:
1210	626.99275  Prohibited practices; penalties.--
1211	(1)  It is unlawful for any person:
1212	(b)  Knowingly or with the intent to defraud, for the
1213	purpose of depriving another of property or for pecuniary gain,
1214	issue or use a pattern of false, misleading, or deceptive life
1215	expectancies In the solicitation or sale of a viatical
1216	settlement purchase agreement:
1217	1.  To employ any device, scheme, or artifice to defraud;
1218	2.  To obtain money or property by means of an untrue
1219	statement of a material fact or by any omission to state a
1220	material fact necessary in order to make the statements made, in
1221	light of the circumstances under which they were made, not
1222	misleading; or
1223	3.  To engage in any transaction, practice, or course of
1224	business which operates or would operate as a fraud or deceit
1225	upon a person.
1226	(d)  Knowingly or intentionally facilitate the change of
1227	state of residency of a viator to avoid the provisions of this
1228	chapter.
1229	(2)  A person who violates any provision of this section
1230	commits:
1231	(a)  A felony of the third degree, punishable as provided
1232	in s. 775.082, s. 775.083, or s. 775.084, if the insurance
1233	policy involved is valued at any amount less than $20,000.
1234	(b)  A felony of the second degree, punishable as provided
1235	in s. 775.082, s. 775.083, or s. 775.084, if the insurance
1236	policy involved is valued at $20,000 or more, but less than
1237	$100,000.
1238	(c)  A felony of the first degree, punishable as provided
1239	in s. 775.082, s. 775.083, or s. 775.084, if the insurance
1240	policy involved is valued at $100,000 or more.
1241	Section 29.  Section 626.99278, Florida Statutes, is
1242	amended to read:
1243	626.99278  Viatical provider anti-fraud plan.--Every
1244	licensed viatical settlement provider and registered life
1245	expectancy provider viatical settlement broker must adopt an
1246	anti-fraud plan and file it with the Division of Insurance Fraud
1247	of the department on or before December 1, 2000. Each anti-fraud
1248	plan shall include:
1249	(1)  A description of the procedures for detecting and
1250	investigating possible fraudulent acts and procedures for
1251	resolving material inconsistencies between medical records and
1252	insurance applications.;
1253	(2)  A description of the procedures for the mandatory
1254	reporting of possible fraudulent insurance acts and prohibited
1255	practices set forth in s. 626.99275 to the Division of Insurance
1256	Fraud of the department.;
1257	(3)  A description of the plan for anti-fraud education and
1258	training of its underwriters or other personnel.; and
1259	(4)  A written description or chart outlining the
1260	organizational arrangement of the anti-fraud personnel who are
1261	responsible for the investigation and reporting of possible
1262	fraudulent insurance acts, and investigating unresolved material
1263	inconsistencies between medical records and insurance
1264	applications.
1265	(5)  A process by which the provider will perform
1266	reasonable initial and continuing review of the accuracy of its
1267	life expectancies, whether such life expectancies are performed
1268	in house or by a contracted life expectancy provider, and ensure
1269	compliance with s. 626.99275(1) by its life expectancy
1270	providers.
1271	Section 30.  Section 626.9928, Florida Statutes, is amended
1272	to read:
1273	626.9928  Acquisitions.--Acquisition of interest in a
1274	viatical settlement provider or viatical settlement broker is
1275	subject to s. 628.4615.
1276	Section 31.  Section 626.99285, Florida Statutes, is
1277	amended to read:
1278	626.99285  Applicability of insurance code.--In addition to
1279	other applicable provisions cited in the insurance code, the
1280	office or department, as appropriate, has the authority granted
1281	under ss. 624.310, 626.901, and 626.989 to regulate viatical
1282	settlement providers, viatical settlement brokers, viatical
1283	settlement sales agents, viatical settlement contracts, viatical
1284	settlement purchase agreements, and viatical settlement
1285	transactions.
1286	Section 32.  Section 626.99295, Florida Statutes, is
1287	amended to read:
1288	626.99295  Grace period.--Any person who was effectuating a
1289	viatical settlement purchase agreement as defined in s.
1290	626.9911(8), as such provision existed immediately prior to the
1291	effective date of this act, which viatical settlement purchase
1292	agreement was not registered pursuant to chapter 517, must
1293	proceed within 30 days after the effective date of this act to
1294	conclude all viatical settlement purchase transactions in
1295	progress, provided, if funds have not been matched with a
1296	viaticated policy, such funds, or any unmatched portion of such
1297	funds, shall be returned to the viatical settlement purchaser as
1298	defined in s. 626.9911(9), as such provision existed immediately
1299	prior to the effective date of this act, within 30 days after
1300	the effective date of this act. The provider may not solicit,
1301	negotiate, advertise, or effectuate new viatical settlement
1302	purchase agreements after the effective date of this act. An
1303	unlicensed viatical settlement provider or viatical settlement
1304	broker that was legally transacting business in this state on
1305	June 30, 2000, may continue to transact such business, in the
1306	absence of any orders by the office, department, or the former
1307	Department of Insurance to the contrary, until the office or
1308	department, as applicable, approves or disapproves the viatical
1309	settlement provider's application for licensure if the viatical
1310	settlement provider or viatical settlement broker filed with the
1311	former department an application for licensure no later than
1312	August 1, 2000, and if the viatical settlement provider or
1313	viatical settlement broker complies with all other provisions of
1314	this act. Any form for which former department approval was
1315	required under this part must have been filed by August 1, 2000,
1316	and may continue to be used until disapproved by the office or
1317	department.
1318	Section 33.  Sections 626.9917, 626.9918, 626.99235,
1319	626.99236, and 626.99277, Florida Statutes, are repealed.
1320	Section 34.  This act shall take effect upon becoming a
1321	law.

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