| 1 | The Insurance Committee recommends the following: |
| 2 |
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| 3 | Council/Committee Substitute |
| 4 | Remove the entire bill and insert: |
| 5 | A bill to be entitled |
| 6 | An act relating to insurance; creating s. 624.6086, F.S.; |
| 7 | defining the term "contractual liability insurance for |
| 8 | debt cancellation products"; describing debt cancellation |
| 9 | products; authorizing certain entities to offer debt |
| 10 | cancellation products under certain circumstances; ; |
| 11 | specifying such products as not constituting insurance; |
| 12 | amending ss. 627.553 and 627.679, F.S.; revising certain |
| 13 | limitations on certain amounts of life insurance on a |
| 14 | debtor; amending s. 627.681, F.S.; revising a limitation |
| 15 | on the term of credit disability insurance; providing an |
| 16 | effective date. |
| 17 |
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| 18 | Be It Enacted by the Legislature of the State of Florida: |
| 19 |
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| 20 | Section 1. Section 624.6086, Florida Statutes, is created |
| 21 | to read: |
| 22 | 624.6086 Contractual liability insurance for debt |
| 23 | cancellation products; definition; exception.-- |
| 24 | (1) The term "contractual liability insurance for debt |
| 25 | cancellation products" means insurance that a creditor may |
| 26 | purchase against the risk of financial loss from the use of debt |
| 27 | cancellation products with consumer loans and leases. For |
| 28 | purposes of this section, debt cancellation products, including, |
| 29 | but not limited to, debt cancellation contracts, debt suspension |
| 30 | agreements, and guaranteed asset protection contracts, are loan |
| 31 | and lease contract terms, or modifications to loan or lease |
| 32 | contracts, under which a creditor agrees to cancel or suspend |
| 33 | all or part of a customer's obligation to make payments upon the |
| 34 | occurrence of specified adverse events. |
| 35 | (2) Debt cancellation products may be offered by financial |
| 36 | institutions, as defined in s. 655.005(1)(h), pursuant to the |
| 37 | same terms and conditions as products offered by depository |
| 38 | institutions, as defined in 12 U.S.C. s. 1813(c), or federal |
| 39 | credit unions, as defined in 12 U.S.C. s. 1752(1), and such |
| 40 | products shall not constitute insurance for purposes of the |
| 41 | Florida Insurance Code. |
| 42 | Section 2. Subsection (3) of section 627.553, Florida |
| 43 | Statutes, is amended to read: |
| 44 | 627.553 Debtor groups.--The lives of a group of |
| 45 | individuals may be insured under a policy issued to a creditor |
| 46 | or its parent holding company, or to a trustee or trustees or |
| 47 | agent designated by two or more creditors, which creditor, |
| 48 | holding company, affiliate, trustee or trustees, or agent shall |
| 49 | be deemed the policyholder, to insure debtors of the creditor or |
| 50 | creditors, subject to the following requirements: |
| 51 | (3) The amount of insurance on the life of any debtor |
| 52 | shall at no time exceed the amount owed by her or him which is |
| 53 | repayable in installments to the creditor or $50,000, whichever |
| 54 | is less, except that loans not exceeding 1 year's duration shall |
| 55 | not be subject to such limits. However, on such loans not |
| 56 | exceeding 1 year's duration, the limit of coverage shall not |
| 57 | exceed $50,000 with any one insurer. |
| 58 | Section 3. Paragraph (b) of subsection (1) of section |
| 59 | 627.679, Florida Statutes, is amended to read: |
| 60 | 627.679 Amount of insurance; disclosure.-- |
| 61 | (1) |
| 62 | (b) The total amount of credit life insurance on the life |
| 63 | of any debtor with respect to any loan or loans covered in one |
| 64 | or more insurance policies shall at no time exceed the amount of |
| 65 | the indebtedness $50,000 with any one creditor, except that |
| 66 | loans not exceeding 1 year's duration shall not be subject to |
| 67 | such limits, and on such loans not exceeding 1 year's duration, |
| 68 | the limits of coverage shall not exceed $50,000 with any one |
| 69 | insurer. |
| 70 | Section 4. Subsection (2) of section 627.681, Florida |
| 71 | Statutes, is amended to read: |
| 72 | 627.681 Term and evidence of insurance.-- |
| 73 | (2) The term of credit disability insurance on any debtor |
| 74 | insured under this section shall not exceed the term of |
| 75 | indebtedness 10 years, and for credit transactions that exceed |
| 76 | 60 months, coverage shall not exceed 60 monthly indemnities. |
| 77 | Section 5. This act shall take effect upon becoming a law. |