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A bill to be entitled |
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An act relating to insurance; amending s. 624.605, F.S.; |
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including debt cancellation products within the definition |
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of the term "casualty insurance"; describing debt |
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cancellation products; authorizing certain entities to |
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offer debt cancellation products under certain |
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circumstances; specifying such products as not |
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constituting insurance; amending ss. 627.553 and 627.679, |
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F.S.; revising certain limitations on certain amounts of |
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life insurance on a debtor; amending s. 627.681, F.S.; |
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revising a limitation on the term of credit disability |
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insurance; amending 627.681, F.S.; revising a provision |
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relating to the term and evidence of insurance; amending |
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s. 627.902, F.S.; exempting certain lump-sum premium |
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payments from provisions relating to premium financing; |
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amending s. 628.511, F.S.; revising the definitions of the |
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terms "clearing corporation" and "custodian"; deleting |
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definitions of the terms "book entry system" and "member |
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bank"; conforming changes; amending s. 655.947, F.S.; |
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providing what constitutes a debt cancellation product; |
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providing a definition; providing an effective date. |
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Be It Enacted by the Legislature of the State of Florida: |
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Section 1. Paragraph (r) is
added to subsection (1) of |
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section 624.605, Florida Statutes, to read: |
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624.605 "Casualty insurance"
defined.-- |
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(1) "Casualty insurance"
includes: |
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(r) Insurance for debt
cancellation products.--Insurance |
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that a creditor may purchase against the risk of financial loss
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from the use of debt cancellation products with consumer loans
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or leases or retail installment contracts. |
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1. For purposes of this
paragraph, debt cancellation |
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products, including, but not limited to, debt cancellation
|
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contracts, debt suspension agreements, and guaranteed asset
|
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protection contracts, are loan or lease or retail installment
|
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contract terms, or modifications to loan, lease, or retail
|
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installment contracts, under which a creditor agrees to cancel
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or suspend all or part of a customer's obligation to make
|
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payments upon the occurrence of specified events. |
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2. Debt cancellation
products may be offered by financial |
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institutions, as defined in s. 655.005(1)(h), and including
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insured depository institutions, as defined in 12 U.S.C. s.
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1813(c), and subsidiaries thereof, as provided in the Financial
|
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Institution Codes, or Motor Vehicle Retail Installment Sellers,
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as defined in s. 520.02(15) or Retail Lessors, as defined in s.
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521.003(8), Florida Statutes, and such products shall not
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constitute insurance for purposes of the Florida Insurance
Code. |
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Section 2. Subsection (3) of
section 627.553, Florida |
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Statutes, is amended to read: |
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627.553 Debtor groups.--The
lives of a group of |
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individuals may be insured under a policy issued to a creditor |
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or its parent holding company, or to a trustee or trustees or |
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agent designated by two or more creditors, which creditor, |
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holding company, affiliate, trustee or trustees, or agent shall |
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be deemed the policyholder, to insure debtors of the creditor or
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creditors, subject to the following requirements: |
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(3) The amount of insurance
on the life of any debtor |
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shall at no time exceed the amount owed by her or him which is |
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repayable in installments to the creditor or $50,000, whichever
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is less, except that loans not exceeding 1 year's duration
shall |
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not be subject to such limits. However, on such loans
not |
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exceeding 1 year's duration, the limit of coverage shall not
|
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exceed $50,000 with any one insurer. |
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Section 3. Paragraph (b) of
subsection (1) of section |
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627.679, Florida Statutes, is amended to read: |
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627.679 Amount of insurance;
disclosure.-- |
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(1) |
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(b) The total amount of
credit life insurance on the life |
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of any debtor with respect to any loan or loans covered in one |
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or more insurance policies shall at no time exceed the amount
of |
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the indebtedness $50,000 with any one creditor, except
that |
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loans not exceeding 1 year's duration shall not be subject to
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such limits, and on such loans not exceeding 1 year's duration,
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the limits of coverage shall not exceed $50,000 with any one
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insurer. |
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Section 4. Subsection (2) of
section 627.681, Florida |
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Statutes, is amended to read: |
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627.681 Term and evidence of
insurance.-- |
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(2) The term of credit
disability insurance on any debtor |
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insured under this section shall not exceed the term of |
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indebtedness 10 years, and for credit transactions that
exceed |
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60 months, coverage shall not exceed 60 monthly
indemnities. |
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Section 5. Section 627.902,
Florida Statutes, is amended |
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to read: |
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627.902 Premium financing by
an insurer or subsidiary.-- |
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(1) An insurer, a
subsidiary of an insurer, or a |
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corporation under substantially the same management or control |
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as an authorized insurer or group of authorized insurers may |
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finance property, casualty, surety, and marine insurance |
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premiums on policies issued or business produced by such insurer
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or insurers; however, any such insurer, subsidiary, or |
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corporation or group of insurers that charges a total service |
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charge per year or rate of interest which is substantially more |
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than that provided in s. 627.901 shall be subject to part XV of |
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this chapter. Notwithstanding any other provision of law, an |
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insurer, a subsidiary of an insurer, or a corporation under |
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substantially the same management or control as an authorized |
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insurer or group of authorized insurers may charge one-half of |
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the additional charge provided in s. 627.840, and the charges |
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provided in s. 627.841. |
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(2) Nothing in this part
or in part XV shall disallow or |
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otherwise apply to a discount for those who pay the entire
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premium for the entire policy term at the inception of the term
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if the discount is found to be actuarially justified by the
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office and approved by the office pursuant to the provisions of
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part I of this chapter. Such actuarially justified and approved
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discount shall not be deemed a component of or related to
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premium financing. |
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Section 6. Section 628.511,
Florida Statutes, is amended |
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to read: |
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628.511 Clearing
corporations Book entry accounting |
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system.-- |
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(1) The purpose of this
section is to authorize domestic |
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insurers to utilize modern systems for holding and transferring |
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securities without physical delivery of securities certificates,
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subject to appropriate rules of the commission. |
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(2) The following terms are
defined for use in this |
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section: |
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(a) "Securities" means
instruments as defined in s. |
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678.1021. |
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(b) "Clearing corporation"
means a clearing corporation as |
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defined in s. 678.1021. The term "clearing corporation" also
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includes "treasury/reserve automated debt entry securities
|
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includes "treasury/reserve automated debt entry securities |
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system" and "treasury direct" book-entry securities systems as
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established pursuant to 31 U.S.C. ss. 3100 et seq., 12 U.S.C.
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391 and 5 U.S.C. 301. |
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(c) "Custodian"
"Direct participant" means a national |
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bank, state bank or trust company, or broker or dealer that
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which maintains an account in its name in a clearing
corporation |
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and through which an insurance company participates in a |
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clearing corporation. |
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(d) "Federal Reserve
book-entry system" means the |
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computerized systems sponsored by the United States Department
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of the Treasury and agencies and instrumentalities of the
United |
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States for holding and transferring securities of the United
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States Government and such agencies and instrumentalities,
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respectively, in Federal Reserve banks through banks which are
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members of the Federal Reserve System or which otherwise have
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access to such computerized systems. |
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(e) "Member bank" means a
national bank, state bank or |
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trust company which is a member of the Federal Reserve System
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and through which an insurer participates in the Federal
Reserve |
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book-entry system. |
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(3) Notwithstanding any other
provision of law, a domestic |
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insurer may deposit or arrange for the deposit of securities |
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held in or purchased for its general account and its separate |
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accounts in a clearing corporation or in the Federal Reserve
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book-entry system. When securities are deposited with a
clearing |
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corporation, certificates representing securities of the same |
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class of the same issuer may be merged and held in bulk in the |
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name of the nominee of such clearing corporation with any other |
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securities deposited with such clearing corporation by any |
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person, regardless of the ownership of such securities, and |
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certificates representing securities of small denominations may |
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be merged into one or more certificates of larger denominations.
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The records of any custodian bank through which an
insurer holds |
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securities in the Federal Reserve book-entry system, and the
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records of any custodian banks through which an insurer holds
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securities in a clearing corporation, shall at all times show
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that such securities are held for such insurer and for which |
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accounts thereof. Ownership of, and other interests in, such |
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securities may be transferred by bookkeeping entry on the books |
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of such clearing corporation or in the Federal Reserve
book- |
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entry system without, in either case, physical delivery
of |
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certificates representing such securities. |
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(4) The commission may adopt
rules governing the deposit |
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by insurers of securities with clearing corporations and in the
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Federal Reserve book-entry system. |
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Section 7. Section 655.947,
Florida Statutes, is created |
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to read: |
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655.947 Debt cancellation
products.-- |
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(1) Debt cancellation
products, including, but not limited |
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to, debt cancellation contracts, debt suspension agreements,
and |
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guaranteed asset protection contracts, are loan or lease |
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contract terms, or modifications to loan or lease contracts,
|
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under which a creditor agrees to cancel or suspend all or part
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of a customer's obligation to make payments upon the occurrence
|
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of specified events. Debt cancellation products may be offered,
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and a fee charged, by financial institutions and their |
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subsidiaries subject to the provisions of this section. As used
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in this section, the term "financial institutions" includes
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those as defined in s. 655.005(1)(h) and insured depository
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institutions as defined in 12 U.S.C. s. 1813. |
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(2) The commission shall
adopt rules to administer this |
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section, such rules shall be consistent with 12 CFR Part 37, as
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amended. |
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Section 8. This act shall
take effect upon becoming a law. |