1 | A bill to be entitled |
2 | An act relating to administration of life insurance |
3 | contracts; amending s. 518.112, F.S.; providing additional |
4 | delegable investment functions for fiduciaries relating to |
5 | life insurance contract administration; revising notice |
6 | requirements and criteria for delegation by a fiduciary of |
7 | investment functions to an investment agent; creating s. |
8 | 736.0902, F.S.; specifying certain activities trustees are |
9 | under no duty to undertake relating to administration of |
10 | certain contracts for life insurance; specifying absence |
11 | of liability of trustees to trust beneficiaries for |
12 | certain losses; specifying criteria for application of |
13 | certain provisions; providing for certain notice |
14 | requirements; specifying nonapplication to certain |
15 | contracts of life insurance; providing definitions; |
16 | providing an 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. Paragraph (b) of subsection (2) and paragraph |
21 | (b) of subsection (3) of section 518.112, Florida Statutes, are |
22 | amended to read: |
23 | 518.112 Delegation of investment functions.- |
24 | (2) |
25 | (b) The delegable investment functions under this |
26 | subsection include: |
27 | 1. A determination of whether any insurance contract is or |
28 | remains a proper investment; |
29 | 2. A determination of whether or not to exercise any |
30 | policy option available under any insurance such contracts; |
31 | 3. A determination of whether or not to diversify such |
32 | contracts relative to one another or to other assets, if any, |
33 | administered by the fiduciary; or |
34 | 4. An inquiry about changes in the health or financial |
35 | condition of the insured or insureds relative to any such |
36 | contract;. |
37 | 5. A determination of whether the owner of any insurance |
38 | contract has an insurable interest in the life of the insured; |
39 | or |
40 | 6. An investigation of the financial strength of the life |
41 | insurance company. |
42 | (3) A fiduciary may delegate investment functions to an |
43 | investment agent under subsection (1) or subsection (2), if: |
44 | (b) In the case of a trust or estate, the fiduciary has |
45 | given written notice, of its intention to begin delegating |
46 | investment functions under this section, to all beneficiaries, |
47 | or their legal representative, eligible to receive distributions |
48 | from the trust or estate within 30 days of the delegation unless |
49 | such notice is waived by the eligible beneficiaries entitled to |
50 | receive such notice. This notice shall thereafter, until or |
51 | unless the beneficiaries eligible to receive income from the |
52 | trust or distributions from the estate at the time are notified |
53 | to the contrary, authorize the trustee or legal representative |
54 | to delegate investment functions pursuant to this subsection. |
55 | This discretion to revoke the delegation does not imply under |
56 | subsection (2) any continuing obligation to review the agent's |
57 | actions. |
58 | 1. Notice to beneficiaries eligible to receive |
59 | distributions from the trust from the estate, or their legal |
60 | representatives shall be sufficient notice to all persons who |
61 | may join the eligible class of beneficiaries in the future. |
62 | 2. Additionally, as used herein, legal representative |
63 | includes one described in s. 731.303, without any requirement of |
64 | a court order, an attorney-in-fact under a durable power of |
65 | attorney sufficient to grant such authority, a legally appointed |
66 | guardian, or equivalent under applicable law, any living, |
67 | natural guardian of a minor child, or a guardian ad litem. |
68 | 3. Written notice shall be given as provided in part III |
69 | of chapter 731 as to an estate and as provided in s. 736.0109 |
70 | and part III of chapter 736 as to a trust.: |
71 | a. By any form of mail or by any commercial delivery |
72 | service, approved for service of process by the chief judge of |
73 | the judicial circuit in which the trust has its principal place |
74 | of business at the date of notice, requiring a signed receipt; |
75 | b. As provided by law for service of process; or |
76 | c. By an elisor as may be provided in the Florida Rules of |
77 | Civil Procedure. |
78 |
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79 | Notice by mail or by approved commercial delivery service is |
80 | complete on receipt of notice. Proof of notice must be by |
81 | verified statement of the person mailing or sending notice, and |
82 | there must be attached thereto the signed receipt or other |
83 | satisfactory evidence that delivery was effected on the |
84 | addressee or on the addressee's agent. Proof of notice must be |
85 | maintained among the trustee's permanent records. |
86 | Section 2. Section 736.0902, Florida Statutes, is created |
87 | to read: |
88 | 736.0902 Nonapplication of prudent investor rule.- |
89 | (1) Notwithstanding the provisions of s. 518.11 or s. |
90 | 736.0804, with respect to any contract of life insurance |
91 | acquired or retained on the life of a qualified person, a |
92 | trustee has no duty to: |
93 | (a) Determine whether the trust has an insurable interest |
94 | in the life of the insured; |
95 | (b) Determine whether any contract of life insurance is or |
96 | remains a proper investment; |
97 | (c) Investigate the financial strength of the life |
98 | insurance company; |
99 | (d) Determine whether to exercise any policy option |
100 | available under the contract of life insurance; |
101 | (e) Diversify any such contract of life insurance or |
102 | diversify the assets of the trust with respect to the contract |
103 | of life insurance; or |
104 | (f) Inquire about or investigate the health or financial |
105 | condition of any insured or insureds. |
106 | (2) For purposes of this section, the term "qualified |
107 | person" means any person, or the spouse of any person, who has |
108 | provided the trustee with funds that are used to acquire or pay |
109 | premiums with respect to a policy of insurance on the life of |
110 | that person, on the life of the spouse of that person, or on the |
111 | lives of that person and the spouse of that person. |
112 | (3) In all cases in which this section applies, the |
113 | trustee is not liable to the beneficiaries of the trust or any |
114 | other person for any loss sustained with respect to such |
115 | contract of life insurance. |
116 | (4) Unless otherwise provided in the trust instrument, |
117 | paragraph (1)(a) applies to any contract of life insurance on |
118 | the life of a qualified person. |
119 | (5) Unless otherwise provided in the trust instrument, |
120 | paragraphs (1)(b)-(f) apply if: |
121 | (a) The trust instrument, by reference to this section, |
122 | makes this section applicable to contracts of life insurance |
123 | held by the trust; or |
124 | (b) The trustee has provided notice that this section |
125 | applies to a contract of life insurance held by the trust. For |
126 | any notice provided under this paragraph: |
127 | 1. The notice shall be given to the qualified |
128 | beneficiaries and shall contain a copy or restatement of this |
129 | section. |
130 | 2. A notice given to a person who represents the interests |
131 | of any of the persons set forth in subparagraph 1., pursuant to |
132 | any of the provisions of part III of this chapter, shall be |
133 | treated as notice to the person so represented. |
134 | 3. The notice shall be provided pursuant to s. 736.0109. |
135 | 4. If any person notified pursuant to this paragraph |
136 | objects to the application of this section in a writing |
137 | delivered to the trustee within 30 days after the date such |
138 | notice was received, paragraphs (1)(b)-(f) shall not apply until |
139 | the objection is withdrawn. |
140 | 5. There is a rebuttable presumption that any notice sent |
141 | by United States mail is received 3 days after placing the |
142 | notice in the United States mail with proper postage paid. |
143 | (6) This section does not apply to any contract of life |
144 | insurance purchased from any affiliate of the trustee or with |
145 | respect to which the trustee or any affiliate of the trustee |
146 | receives any commission unless the trustee's duties have been |
147 | delegated to another person in accordance with s. 518.112. For |
148 | purposes of this subsection, the term "affiliate" of the trustee |
149 | means any person who controls, is controlled by, or is under |
150 | common control with the trustee. |
151 | Section 3. This act shall take effect upon becoming a law. |