Florida Senate - 2009                                    SB 2520
       
       
       
       By Senator Peaden
       
       
       
       
       2-01680B-09                                           20092520__
    1                        A bill to be entitled                      
    2         An act relating to annuity contracts for senior
    3         consumers; creating s. 627.45545, F.S.; providing a
    4         short title; providing legislative findings; providing
    5         definitions; specifying annuity contract protection
    6         criteria for senior consumers; providing for
    7         application of the act; providing an effective date.
    8  
    9  Be It Enacted by the Legislature of the State of Florida:
   10  
   11         Section 1. Section 627.45545, Florida Statutes, is created
   12  to read:
   13         627.45545 Senior annuity protections.—
   14         (1) This section may be cited as the “Florida Senior
   15  Annuity Bill of Rights.”
   16         (2) The Legislature finds that equity indexed, fixed equity
   17  indexed, and indexed annuities are substantially similar in
   18  complexity to securities and should therefore be regulated as
   19  securities relative to setting appropriate consumer protections
   20  and agent training. Agents who sell equity indexed, fixed equity
   21  indexed, and indexed annuities should be required to have the
   22  same license as that required to sell securities under chapter
   23  517.
   24         (3) As used in this section, the term:
   25         (a) “Annuity contract” means a fixed annuity, equity
   26  indexed annuity, fixed equity indexed annuity, indexed annuity,
   27  or variable annuity that is individually solicited, whether the
   28  product is classified as an individual annuity or group annuity.
   29         (b) “Equity indexed annuity,” “fixed equity indexed
   30  annuity,” or “indexed annuity” means a fixed annuity that earns
   31  interest or provides benefits that are linked to an external
   32  equity reference or an equity index.
   33         (c) “Purchase payment” means any amount paid to the insurer
   34  under an annuity contract as consideration for the benefits
   35  provided by the contract.
   36         (d) “Senior consumer” means a person 70 years of age or
   37  older. In the event of a joint purchase by more than one party,
   38  a purchase is considered to be made by a senior consumer if any
   39  party is age 70 or older.
   40         (e) “Surrender charge” means any charge levied against the
   41  purchase payments for withdrawal of the purchase payment prior
   42  to the expiration of the surrender charge period.
   43         (f) “Surrender charge percentage” means the percentage of
   44  the purchase payments that the contract holder will forfeit for
   45  withdrawal of the purchase payment prior to the expiration of
   46  the surrender charge period.
   47         (g) “Surrender charge period” means the number of years
   48  before purchase payments of the annuity contract may be
   49  withdrawn without penalty.
   50         (4) The following protections shall be incorporated into
   51  any annuity contract purchased by an individual who, at the time
   52  of purchase, is a senior consumer:
   53         (a) The maximum surrender charge period shall be 9 years
   54  from the date of each purchase payment.
   55         (b) The maximum annual surrender charge percentage shall be
   56  9 percent of the purchase payments.
   57         (c) After the first contract year, senior consumers shall
   58  be allowed free annual withdrawals in each contract year of up
   59  to 10 percent of the purchase payments for annuity contracts
   60  with a surrender charge period of 7 years or longer.
   61         (d) Senior consumers diagnosed with a terminal illness that
   62  will result in death within 2 years after the diagnosis may
   63  withdraw all purchase payments from an annuity contract prior to
   64  the expiration of the surrender charge period without penalty.
   65         Section 2. This act shall take effect January 1, 2010, and
   66  applies to annuity contracts issued or renewed on or after that
   67  date.