| 1 | Representative Gaetz offered the following: |
| 2 |
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| 3 | Amendment (with title amendment) |
| 4 | Between lines 237 and 238, insert: |
| 5 | Section 6. Section 626.995, Florida Statutes, is created |
| 6 | to read: |
| 7 | 626.995 Scope.-With the exception of s. 626.99245, chapter |
| 8 | 626 and the Florida Insurance Code do not authorize the office |
| 9 | to conduct any inspection or review or exercise any other |
| 10 | regulatory authority relating to a viatical settlement contract |
| 11 | entered into with a resident of another state. |
| 12 | Section 7. Subsections (1), (2), (3), (4), (6), (7), (8), |
| 13 | (9), (10), and (14) of section 626.9911, Florida Statutes, are |
| 14 | amended to read: |
| 15 | 626.9911 Definitions.-As used in this act, the term: |
| 16 | (1) "Financing entity" means an underwriter, placement |
| 17 | agent, lender, purchaser of securities, or purchaser of a policy |
| 18 | or certificate from a viatical settlement provider, credit |
| 19 | enhancer, or any entity that has direct ownership in a policy or |
| 20 | certificate that is the subject of a viatical settlement |
| 21 | contract, but whose principal activity related to the |
| 22 | transaction is providing funds or credit enhancement to effect |
| 23 | the viatical settlement contract or the purchase of one or more |
| 24 | viaticated policies and who has an agreement in writing with one |
| 25 | or more licensed viatical settlement providers to finance the |
| 26 | acquisition of viatical settlement contracts. The term does not |
| 27 | include a nonaccredited investor or other natural person. A |
| 28 | financing entity may not enter into a viatical settlement |
| 29 | contract. |
| 30 | (2) "Independent third-party trustee or escrow agent" |
| 31 | means an attorney, certified public accountant, financial |
| 32 | institution, or other person providing escrow services relating |
| 33 | to a viatical settlement contract under the authority of a |
| 34 | regulatory body. The term does not include any person |
| 35 | associated, affiliated, or under common control with a viatical |
| 36 | settlement provider or viatical settlement broker. |
| 37 | (3) "Life expectancy" means an opinion or evaluation |
| 38 | relating to a viatical settlement contract as to how long a |
| 39 | particular person is to live, or relating to such person's |
| 40 | expected demise. |
| 41 | (4)(a) "Life expectancy provider" means a person who |
| 42 | determines, or holds himself or herself out as determining, life |
| 43 | expectancies or mortality ratings used to determine life |
| 44 | expectancies relating to a viatical settlement contract or |
| 45 | viatical settlement investment: |
| 46 | 1.(a) On behalf of a viatical settlement provider, |
| 47 | viatical settlement broker, life agent, or person engaged in the |
| 48 | business of viatical settlements performing the functions of a |
| 49 | viatical settlement provider; or |
| 50 | 2.(b) In connection with a viatical settlement investment, |
| 51 | pursuant to s. 517.021(23).; or |
| 52 | (b)(c) The term "life expectancy provider" does not |
| 53 | include a viatical settlement provider, financing entity, |
| 54 | related provider trust, or special purpose entity, or an |
| 55 | employee or agent thereof, that determines life expectancies for |
| 56 | its own use On residents of this state in connection with a |
| 57 | viatical settlement contract or viatical settlement investment. |
| 58 | (6) "Related form" means any form, created by or on behalf |
| 59 | of a viatical settlement provider licensee, which a viator is |
| 60 | required to sign or initial. The forms include, but are not |
| 61 | limited to, a power of attorney, a release of medical |
| 62 | information form, a suitability questionnaire, a disclosure |
| 63 | document, or any addendum, schedule, or amendment to a viatical |
| 64 | settlement contract considered necessary by a viatical |
| 65 | settlement provider to effectuate a viatical settlement contract |
| 66 | transaction. |
| 67 | (7) "Related provider trust" means a titling trust or |
| 68 | other trust established by a licensed viatical settlement |
| 69 | provider or financing entity for the sole purpose of holding the |
| 70 | ownership or beneficial interest in purchased policies in |
| 71 | connection with a financing transaction. The trust must have a |
| 72 | written agreement with a licensed viatical settlement provider |
| 73 | or financing entity under which the licensed viatical settlement |
| 74 | provider or financing entity is responsible for insuring |
| 75 | compliance with all statutory and regulatory requirements |
| 76 | relating to viatical settlement contracts and under which the |
| 77 | trust agrees to make all records and files relating to viatical |
| 78 | settlement contracts transactions available to the office as if |
| 79 | those records and files were maintained directly by the licensed |
| 80 | viatical settlement provider. This term does not include an |
| 81 | independent third-party trustee or escrow agent or a trust that |
| 82 | does not enter into agreements with a viator. A related provider |
| 83 | trust shall be subject to all provisions of this act that apply |
| 84 | to the viatical settlement provider who established the related |
| 85 | provider trust, except s. 626.9912, which shall not be |
| 86 | applicable. A viatical settlement provider may establish no more |
| 87 | than one related provider trust, and the sole trustee of such |
| 88 | related provider trust shall be the viatical settlement provider |
| 89 | licensed under s. 626.9912. The name of the licensed viatical |
| 90 | settlement provider shall be included within the name of the |
| 91 | related provider trust. |
| 92 | (8) "Special purpose entity" means an entity established |
| 93 | by a licensed viatical settlement provider or by a financing |
| 94 | entity, which may be a corporation, partnership, trust, limited |
| 95 | liability company, or other similar entity formed solely to |
| 96 | provide, either directly or indirectly, access to institutional |
| 97 | capital markets to a viatical settlement provider or financing |
| 98 | entity relating to viatical settlement contracts. A special |
| 99 | purpose entity may not obtain capital from any natural person or |
| 100 | entity with less than $50 million in assets and may not enter |
| 101 | into a viatical settlement contract. |
| 102 | (9) "Viatical settlement broker" means a person who, on |
| 103 | behalf of a viator and for a fee, commission, or other valuable |
| 104 | consideration, offers or attempts to negotiate viatical |
| 105 | settlement contracts between a viator resident in this state and |
| 106 | one or more viatical settlement providers. Notwithstanding the |
| 107 | manner in which the viatical settlement broker is compensated, a |
| 108 | viatical settlement broker is deemed to represent only the |
| 109 | viator and owes a fiduciary duty to the viator to act according |
| 110 | to the viator's instructions and in the best interest of the |
| 111 | viator. The term does not include an attorney, licensed |
| 112 | Certified Public Accountant, or investment adviser lawfully |
| 113 | registered under chapter 517, who is retained to represent the |
| 114 | viator and whose compensation is paid directly by or at the |
| 115 | direction and on behalf of the viator. |
| 116 | (10) "Viatical settlement contract," "viatical settlement |
| 117 | transaction," or "transaction" means a written agreement entered |
| 118 | into between a viatical settlement provider, or its related |
| 119 | provider trust, and a viator. The viatical settlement contract |
| 120 | includes an agreement to transfer ownership or change the |
| 121 | beneficiary designation of a life insurance policy at a later |
| 122 | date, regardless of the date that compensation is paid to the |
| 123 | viator. The agreement must establish the terms under which the |
| 124 | viatical settlement provider will pay compensation or anything |
| 125 | of value, which compensation or value is less than the expected |
| 126 | death benefit of the insurance policy or certificate, in return |
| 127 | for the viator's assignment, transfer, sale, devise, or bequest |
| 128 | of the death benefit or ownership of all or a portion of the |
| 129 | insurance policy or certificate of insurance to the viatical |
| 130 | settlement provider. A viatical settlement contract also |
| 131 | includes a contract for a loan or other financial transaction |
| 132 | with a resident of this state secured primarily by an individual |
| 133 | or group life insurance policy, other than a loan by a life |
| 134 | insurance company pursuant to the terms of the life insurance |
| 135 | contract, or a loan secured by the cash value of a policy. |
| 136 | (14) "Viator" means a person resident of this state who is |
| 137 | the owner of a life insurance policy or a certificateholder |
| 138 | under a group policy, which policy is not a previously |
| 139 | viaticated policy, who enters or seeks to enter into a viatical |
| 140 | settlement contract. This term does not include a viatical |
| 141 | settlement provider or any person acquiring a policy or interest |
| 142 | in a policy from a viatical settlement provider, nor does it |
| 143 | include an independent third-party trustee or escrow agent. |
| 144 | Section 8. Subsection (2) of section 626.9913, Florida |
| 145 | Statutes, is amended to read: |
| 146 | 626.9913 Viatical settlement provider license continuance; |
| 147 | annual report; fees; deposit.- |
| 148 | (2) Annually, on or before March 1, the viatical |
| 149 | settlement provider licensee shall file a statement containing |
| 150 | information required by statute the commission requires and |
| 151 | shall pay to the office a license fee in the amount of $500. |
| 152 | After December 31, 2007, The annual statement shall include an |
| 153 | annual audited financial statement of the viatical settlement |
| 154 | provider prepared in accordance with generally accepted |
| 155 | accounting principles by an independent certified public |
| 156 | accountant covering a 12-month period ending on a day falling |
| 157 | during the last 6 months of the preceding calendar year. If the |
| 158 | audited financial statement has not been completed, however, the |
| 159 | licensee shall include in its annual statement an unaudited |
| 160 | financial statement for the preceding calendar year and an |
| 161 | affidavit from an officer of the licensee stating that the audit |
| 162 | has not been completed. In this event, the licensee shall submit |
| 163 | the audited statement on or before June 1. Audited and unaudited |
| 164 | financial statements are subject to chapter 688 and ss. |
| 165 | 624.4213, 812.081, and 815.045 and are protected as trade |
| 166 | secrets. The annual statement, due on or before March 1 each |
| 167 | year, shall also provide the office with a report of all life |
| 168 | expectancy providers who have provided life expectancies |
| 169 | directly or indirectly to the viatical settlement provider for |
| 170 | use in connection with a viatical settlement contract or a |
| 171 | viatical settlement investment. A viatical settlement provider |
| 172 | shall include in all statements filed with the office all |
| 173 | information requested by the office regarding a related provider |
| 174 | trust established by the viatical settlement provider. The |
| 175 | office may adopt rules requiring the annual statement to contain |
| 176 | information, only in the aggregate, relating to the volume and |
| 177 | value of viatical settlement contracts entered into with viators |
| 178 | require more frequent reporting. Failure to timely file the |
| 179 | annual statement or the audited financial statement or to timely |
| 180 | pay the license fee is grounds for immediate suspension of the |
| 181 | license. The commission may by rule require all or part of the |
| 182 | statements or filings required under this section to be |
| 183 | submitted by electronic means in a computer-readable form |
| 184 | compatible with the electronic data format specified by the |
| 185 | commission. |
| 186 | Section 9. Paragraphs (b), (e), and (f) of subsection (1) |
| 187 | of section 626.9914, Florida Statutes, are amended to read: |
| 188 | 626.9914 Suspension, revocation, denial, or nonrenewal of |
| 189 | viatical settlement provider license; grounds; administrative |
| 190 | fine.- |
| 191 | (1) The office shall suspend, revoke, deny, or refuse to |
| 192 | renew the license of any viatical settlement provider if the |
| 193 | office finds that the licensee: |
| 194 | (b) Has engaged in fraudulent or dishonest practices, or |
| 195 | otherwise has been shown to be untrustworthy or incompetent to |
| 196 | act as a viatical settlement provider in conducting business |
| 197 | under the license issued in this state; |
| 198 | (e) Has issued viatical settlement contracts on forms that |
| 199 | have not been approved pursuant to this act; |
| 200 | (f) Has failed to honor contractual obligations related to |
| 201 | the business of viatical settlement contracts; |
| 202 | Section 10. Subsection (1) of section 626.9915, Florida |
| 203 | Statutes, is amended to read: |
| 204 | 626.9915 Effect of suspension or revocation of viatical |
| 205 | settlement provider license; duration of suspension; |
| 206 | reinstatement.- |
| 207 | (1) When its license is suspended or revoked, the viatical |
| 208 | settlement provider must proceed, immediately following the |
| 209 | effective date of the suspension or revocation, to conclude the |
| 210 | affairs it is transacting under its license. The provider may |
| 211 | not solicit, negotiate, advertise, or effectuate new viatical |
| 212 | settlement contracts. The office retains jurisdiction over the |
| 213 | provider until all viatical settlement contracts have been |
| 214 | fulfilled or canceled or have expired. A provider whose license |
| 215 | is suspended or revoked may continue to maintain and service |
| 216 | viaticated policies subject to the approval of the office. |
| 217 | Section 11. Section 626.992, Florida Statutes, is amended |
| 218 | to read: |
| 219 | 626.992 Use of licensed viatical settlement providers, |
| 220 | viatical settlement brokers, and registered life expectancy |
| 221 | providers required.- |
| 222 | (1) A licensed viatical settlement provider may not use |
| 223 | any person to perform the functions of a viatical settlement |
| 224 | broker as defined in this act relating to a viatical settlement |
| 225 | contract unless such person holds a current, valid life agent |
| 226 | license and has appointed himself or herself in conformance with |
| 227 | this chapter. |
| 228 | (2) A viatical settlement broker may not use any person to |
| 229 | perform the functions of a viatical settlement provider, as |
| 230 | defined in this act, relating to a viatical settlement contract |
| 231 | unless such person holds a current, valid license as a viatical |
| 232 | settlement provider. |
| 233 | (3) After July 1, 2006, a person may not operate as a life |
| 234 | expectancy provider unless such person is registered as a life |
| 235 | expectancy provider pursuant to this act. |
| 236 | (4) After July 1, 2006, a viatical settlement provider, |
| 237 | viatical settlement broker, or any other person performing the |
| 238 | functions of a viatical settlement provider or viatical |
| 239 | settlement broker in the business of viatical settlements may |
| 240 | not obtain life expectancies from a person who is not registered |
| 241 | as a life expectancy provider pursuant to this act. |
| 242 | Section 12. Subsections (1) and (4) of section 626.9922, |
| 243 | Florida Statutes, are amended to read: |
| 244 | 626.9922 Examination.- |
| 245 | (1) The office or department may examine the business and |
| 246 | affairs of any of its respective licensees or applicants for a |
| 247 | license. With respect to applicants, the office or department |
| 248 | may order any such licensee or applicant to produce any records, |
| 249 | books, files, advertising and solicitation materials, or other |
| 250 | information and may take statements under oath to determine |
| 251 | whether the licensee or applicant meets the standards for |
| 252 | granting a license is in violation of the law or is acting |
| 253 | contrary to the public interest. With respect to licensees, the |
| 254 | office or department may order any licensee to produce any |
| 255 | records, books, files, advertising and solicitation materials, |
| 256 | or other information and may take statements under oath to |
| 257 | determine whether the licensee has violated any provision of |
| 258 | this code within the office's or department's regulatory |
| 259 | jurisdiction. The expenses incurred in conducting any |
| 260 | examination or investigation must be paid by the licensee or |
| 261 | applicant. Examinations and investigations must be conducted as |
| 262 | provided in chapter 624, and licensees are subject to all |
| 263 | applicable provisions of the insurance code. |
| 264 | (4) The originals of records required to be maintained |
| 265 | under this section must be made available to the office or |
| 266 | department for examination at the office's or department's |
| 267 | request. |
| 268 | Section 13. Section 626.9925, Florida Statutes, is amended |
| 269 | to read: |
| 270 | 626.9925 Rules.-The commission may adopt rules relating to |
| 271 | viatical settlement contracts governed by the laws of this state |
| 272 | to administer this act, including rules establishing standards |
| 273 | for evaluating advertising by licensees; rules providing for the |
| 274 | collection of data, for disclosures to viators, for the |
| 275 | reporting of life expectancies, and for the registration of life |
| 276 | expectancy providers; and rules defining terms used in this act |
| 277 | and prescribing recordkeeping requirements relating to executed |
| 278 | viatical settlement contracts. |
| 279 | Section 14. Subsection (1) of section 626.9927, Florida |
| 280 | Statutes, is amended to read: |
| 281 | 626.9927 Unfair trade practices; cease and desist; |
| 282 | injunctions; civil remedy.- |
| 283 | (1) A violation of this act is an unfair trade practice |
| 284 | under ss. 626.9521 and 626.9541 and is subject to the penalties |
| 285 | provided in the insurance code. Part IX of this chapter, |
| 286 | entitled Unfair Insurance Trade Practices, applies to a licensee |
| 287 | under this act whose conduct relates to a viatical settlement |
| 288 | contract or a transaction subject to this act as if a viatical |
| 289 | settlement contract were an insurance policy. |
| 290 | Section 15. Paragraphs (c) and (d) of subsection (1) of |
| 291 | section 626.99275, Florida Statutes, are amended to read: |
| 292 | 626.99275 Prohibited practices; penalties.- |
| 293 | (1) It is unlawful for any person: |
| 294 | (c) To knowingly engage in any transaction, practice, or |
| 295 | course of business relating to transactions governed by the laws |
| 296 | of this state, intending thereby to avoid the notice |
| 297 | requirements of s. 626.9924(7). |
| 298 | (d) Who is not a licensed viatical settlement provider in |
| 299 | this state to knowingly or intentionally facilitate the change |
| 300 | of state of residency of a viator to avoid the provisions of |
| 301 | this chapter. |
| 302 | Section 16. Section 626.99278, Florida Statutes, is |
| 303 | amended to read: |
| 304 | 626.99278 Viatical provider anti-fraud plan.-With respect |
| 305 | to transactions governed by the laws of this state, every |
| 306 | licensed viatical settlement provider and registered life |
| 307 | expectancy provider must adopt an anti-fraud plan and file it |
| 308 | with the Division of Insurance Fraud of the department. Each |
| 309 | anti-fraud plan shall include: |
| 310 | (1) A description of the procedures for detecting and |
| 311 | investigating possible fraudulent acts and procedures for |
| 312 | resolving material inconsistencies between medical records and |
| 313 | insurance applications. |
| 314 | (2) A description of the procedures for the mandatory |
| 315 | reporting of possible fraudulent insurance acts and prohibited |
| 316 | practices set forth in s. 626.99275 to the Division of Insurance |
| 317 | Fraud of the department. |
| 318 | (3) A description of the plan for anti-fraud education and |
| 319 | training of its underwriters or other personnel. |
| 320 | (4) A written description or chart outlining the |
| 321 | organizational arrangement of the anti-fraud personnel who are |
| 322 | responsible for the investigation and reporting of possible |
| 323 | fraudulent insurance acts and for the investigation of |
| 324 | unresolved material inconsistencies between medical records and |
| 325 | insurance applications. |
| 326 | (5) For viatical settlement providers, a description of |
| 327 | the procedures used to perform initial and continuing review of |
| 328 | the accuracy of life expectancies used in connection with a |
| 329 | viatical settlement contract or viatical settlement investment. |
| 330 |
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| 331 |
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| 332 | ----------------------------------------------------- |
| 333 | T I T L E A M E N D M E N T |
| 334 | Remove line 40 and insert: |
| 335 | before a specified time; creating s. 626.995, F.S.; limiting the |
| 336 | regulatory authority of the Office of Insurance Regulation |
| 337 | relating to viatical settlement contracts entered into with |
| 338 | residents of other states; amending s. 626.9911, F.S.; revising |
| 339 | definitions; amending s. 626.9913, F.S.; revising provisions |
| 340 | relating to certain annual reports that are required to be filed |
| 341 | by licensed viatical settlement providers; providing for |
| 342 | application and construction relating to the treatment of |
| 343 | audited and unaudited financial statements contained in such |
| 344 | reports as trade secrets; authorizing the office to adopt rules |
| 345 | requiring such reports to include certain information relating |
| 346 | to the volume and value of viatical settlement contracts; |
| 347 | amending s. 626.9914, F.S.; conforming provisions relating to |
| 348 | specified grounds for suspension, revocation, denial, or |
| 349 | nonrenewal of a viatical settlement provider license to |
| 350 | revisions made by this act; amending s. 626.9915, F.S.; |
| 351 | conforming provisions relating to the effect of suspension or |
| 352 | revocation of a viatical settlement provider license to |
| 353 | revisions made by this act; amending s. 626.992, F.S.; |
| 354 | conforming provisions relating to the required use of licensed |
| 355 | individuals to perform functions relating to viatical settlement |
| 356 | contracts to revisions made by this act; amending s. 626.9922, |
| 357 | F.S.; revising provisions relating to the scope of the office's |
| 358 | and department's authority to examine viatical settlement |
| 359 | applicants and licensees; amending s. 626.9925, F.S.; limiting |
| 360 | the current rulemaking authority of the Financial Services |
| 361 | Commission to viatical settlement contracts governed by the laws |
| 362 | of this state; amending s. 626.9927, F.S.; providing that |
| 363 | violations by a licensee relating to a viatical settlement |
| 364 | contract are unfair insurance trade practices and subject to |
| 365 | specified penalties; amending s. 626.99275, F.S.; providing that |
| 366 | it is unlawful for any person to engage in certain acts relating |
| 367 | to transactions governed by the laws of this state; providing |
| 368 | that it is unlawful for persons not licensed as a viatical |
| 369 | settlement provider in this state to engage in certain actions; |
| 370 | providing penalties; amending s. 626.99278, F.S.; limiting the |
| 371 | required adoption of an anti-fraud plan by viatical settlement |
| 372 | providers and registered life expectancy providers to a plan |
| 373 | covering transactions governed by the laws of this state; |
| 374 | providing an effective date. |