Florida Senate - 2017 SENATOR AMENDMENT
Bill No. CS/CS/CS/HB 1007, 1st Eng.
Ì888862OÎ888862
LEGISLATIVE ACTION
Senate . House
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Floor: 1/AD/2R . Floor: SENA1/C
05/05/2017 05:43 PM . 05/05/2017 08:46 PM
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Senator Brandes moved the following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Effective September 1, 2017, section 626.9891,
6 Florida Statutes, is reordered and amended to read:
7 626.9891 Insurer anti-fraud investigative units; reporting
8 requirements; penalties for noncompliance.—
9 (1)(5) As used in For purposes of this section, the term:
10 (a) “Anti-fraud investigative unit” means the designated
11 anti-fraud unit or division, or contractor authorized under
12 subparagraph (2)(a)2.
13 (b) “Designated anti-fraud unit or division” includes a
14 distinct unit or division or a unit or division made up of the
15 assignment of fraud investigation to employees whose principal
16 responsibilities are the investigation and disposition of claims
17 who are also assigned investigation of fraud. If an insurer
18 creates a distinct unit or division, hires additional employees,
19 or contracts with another entity to fulfill the requirements of
20 this section, the additional cost incurred must be included as
21 an administrative expense for ratemaking purposes.
22 (2)(1) By December 31, 2017, every insurer admitted to do
23 business in this state who in the previous calendar year, at any
24 time during that year, had $10 million or more in direct
25 premiums written shall:
26 (a)1. Establish and maintain a designated anti-fraud unit
27 or division within the company to investigate and report
28 possible fraudulent insurance acts claims by insureds or by
29 persons making claims for services or repairs against policies
30 held by insureds; or
31 2.(b) Contract with others to investigate and report
32 possible fraudulent insurance acts by insureds or by persons
33 making claims for services or repairs against policies held by
34 insureds.
35 (b) Adopt an anti-fraud plan.
36 (c) Designate at least one employee with primary
37 responsibility for implementing the requirements of this
38 section.
39 (d) Electronically An insurer subject to this subsection
40 shall file with the Division of Investigative and Forensic
41 Services of the department, and annually thereafter on or before
42 July 1, 1996, a detailed description of the designated anti
43 fraud unit or division established pursuant to paragraph (a) or
44 a copy of the contract executed under subparagraph (a)2., as
45 applicable, a copy of the anti-fraud plan, and the name of the
46 employee designated under paragraph (c) and related documents
47 required by paragraph (b).
48
49 An insurer must include the additional cost incurred in creating
50 a distinct unit or division, hiring additional employees, or
51 contracting with another entity to fulfill the requirements of
52 this section, as an administrative expense for ratemaking
53 purposes.
54 (2) Every insurer admitted to do business in this state,
55 which in the previous calendar year had less than $10 million in
56 direct premiums written, must adopt an anti-fraud plan and file
57 it with the Division of Investigative and Forensic Services of
58 the department on or before July 1, 1996. An insurer may, in
59 lieu of adopting and filing an anti-fraud plan, comply with the
60 provisions of subsection (1).
61 (3) Each insurers anti-fraud plan must plans shall include:
62 (a) An acknowledgement that the insurer has established
63 procedures for detecting and investigating possible fraudulent
64 insurance acts relating to the different types of insurance by
65 that insurer A description of the insurer’s procedures for
66 detecting and investigating possible fraudulent insurance acts;
67 (b) An acknowledgment that the insurer has established A
68 description of the insurer’s procedures for the mandatory
69 reporting of possible fraudulent insurance acts to the Division
70 of Investigative and Forensic Services of the department;
71 (c) An acknowledgement that the insurer provides the A
72 description of the insurer’s plan for anti-fraud education and
73 training required by this section to the anti-fraud
74 investigative unit of its claims adjusters or other personnel;
75 and
76 (d) A description of the required anti-fraud education and
77 training;
78 (e) A written description or chart outlining the
79 organizational arrangement of the insurer’s anti-fraud
80 investigative unit, including the position titles and
81 descriptions of staffing; and personnel who are responsible for
82 the investigation and reporting of possible fraudulent insurance
83 acts
84 (f) The rationale for the level of staffing and resources
85 being provided for the anti-fraud investigative unit which may
86 include objective criteria, such as the number of policies
87 written, the number of claims received on an annual basis, the
88 volume of suspected fraudulent claims detected on an annual
89 basis, an assessment of the optimal caseload that one
90 investigator can handle on an annual basis, and other factors.
91 (4) By December 31, 2018, each insurer shall provide staff
92 of the anti-fraud investigative unit at least 2 hours of initial
93 anti-fraud training that is designed to assist in identifying
94 and evaluating instances of suspected fraudulent insurance acts
95 in underwriting or claims activities. Annually thereafter, an
96 insurer shall provide such employees a 1-hour course that
97 addresses detection, referral, investigation, and reporting of
98 possible fraudulent insurance acts for the types of insurance
99 lines written by the insurer.
100 (5) Each insurer is required to report data related to
101 fraud for each identified line of business written by the
102 insurer during the prior calendar year. The data shall be
103 reported to the department by March 1, 2019, and annually
104 thereafter, and must include, at a minimum:
105 (a) The number of policies in effect;
106 (b) The amount of premiums written for policies;
107 (c) The number of claims received;
108 (d) The number of claims referred to the anti-fraud
109 investigative unit;
110 (e) The number of other insurance fraud matters referred to
111 the anti-fraud investigative unit that were not claim related;
112 (f) The number of claims investigated or accepted by the
113 anti-fraud investigative unit;
114 (g) The number of other insurance fraud matters
115 investigated or accepted by the anti-fraud investigative unit
116 that were not claim related;
117 (h) The number of cases referred to the Division of
118 Investigative and Forensic Services;
119 (i) The number of cases referred to other law enforcement
120 agencies;
121 (j) The number of cases referred to other entities; and
122 (k) The estimated dollar amount or range of damages on
123 cases referred to the Division of Investigative and Forensic
124 Services or other agencies.
125 (6) In addition to providing information required under
126 subsections (2), (4), and (5), each insurer writing workers’
127 compensation insurance shall also report the following
128 information to the department, on or before March 1, 2019, and
129 annually thereafter August 1 of each year, on its experience in
130 implementing and maintaining an anti-fraud investigative unit or
131 an anti-fraud plan. The report must include, at a minimum:
132 (a) The estimated dollar amount of losses attributable to
133 workers’ compensation fraud delineated by the type of fraud,
134 including claimant, employer, provider, agent, or other type.
135 (b) The estimated dollar amount of recoveries attributable
136 to workers’ compensation fraud delineated by the type of fraud,
137 including claimant, employer, provider, agent, or other type.
138 (c) The number of cases referred to the Division of
139 Investigative and Forensic Services, delineated by the type of
140 fraud, including claimant, employer, provider, agent, or other
141 type.
142 (a) The dollar amount of recoveries and losses attributable
143 to workers’ compensation fraud delineated by the type of fraud:
144 claimant, employer, provider, agent, or other.
145 (b) The number of referrals to the Bureau of Workers’
146 Compensation Fraud for the prior year.
147 (c) A description of the organization of the anti-fraud
148 investigative unit, if applicable, including the position titles
149 and descriptions of staffing.
150 (d) The rationale for the level of staffing and resources
151 being provided for the anti-fraud investigative unit, which may
152 include objective criteria such as number of policies written,
153 number of claims received on an annual basis, volume of
154 suspected fraudulent claims currently being detected, other
155 factors, and an assessment of optimal caseload that can be
156 handled by an investigator on an annual basis.
157 (e) The inservice education and training provided to
158 underwriting and claims personnel to assist in identifying and
159 evaluating instances of suspected fraudulent activity in
160 underwriting or claims activities.
161 (f) A description of a public awareness program focused on
162 the costs and frequency of insurance fraud and methods by which
163 the public can prevent it.
164 (7)(4) An Any insurer who obtains a certificate of
165 authority has 6 after July 1, 1995, shall have 18 months in
166 which to comply with subsection (2), and one calendar year
167 thereafter, to comply with subsections (4), (5), and (6) the
168 requirements of this section.
169 (8)(7) If an insurer fails to timely submit a final
170 acceptable anti-fraud plan or anti-fraud investigative unit
171 description, fails to implement the provisions of a plan or an
172 anti-fraud investigative unit description, or otherwise refuses
173 to comply with the provisions of this section, the department,
174 office, or commission may:
175 (a) Impose an administrative fine of not more than $2,000
176 per day for such failure by an insurer to submit an acceptable
177 anti-fraud plan or anti-fraud investigative unit description,
178 until the department, office, or commission deems the insurer to
179 be in compliance;
180 (b) Impose an administrative fine for failure by an insurer
181 to implement or follow the provisions of an anti-fraud plan or
182 anti-fraud investigative unit description; or
183 (c) Impose the provisions of both paragraphs (a) and (b).
184 (9) On or before December 31, 2018, the Division of
185 Investigative and Forensic Services shall create a report
186 detailing best practices for the detection, investigation,
187 prevention, and reporting of insurance fraud and other
188 fraudulent insurance acts. The report must be updated as
189 necessary but at least every 2 years. The report must provide:
190 (a) Information on the best practices for the establishment
191 of anti-fraud investigative units within insurers;
192 (b) Information on the best practices and methods for
193 detecting and investigating insurance fraud and other fraudulent
194 insurance acts;
195 (c) Information on appropriate anti-fraud education and
196 training of insurer personnel;
197 (d) Information on the best practices for reporting
198 insurance fraud and other fraudulent insurance acts to the
199 Division of Investigative and Forensic Services and to other law
200 enforcement agencies;
201 (e) Information regarding the appropriate level of staffing
202 and resources for anti-fraud investigative units within
203 insurers;
204 (f) Information detailing statistics and data relating to
205 insurance fraud which insurers should maintain; and
206 (g) Other information as determined by the Division of
207 Investigative and Forensic Services.
208 (10)(8) The department may adopt rules to administer this
209 section, except that it shall adopt rules to administer
210 subsection (5).
211 Section 2. Effective July 1, 2017, section 626.9896,
212 Florida Statutes, is created to read:
213 626.9896 Dedicated insurance fraud prosecutors.—
214 (1) The department shall collect data from each state
215 attorney office that receives an appropriation to fund attorneys
216 and paralegals dedicated solely to the prosecution of insurance
217 fraud cases and report on the use of such funds. The data must
218 be submitted by the state attorneys to the Division of
219 Investigative and Forensic Services on the last day of each
220 calendar quarter beginning September 30, 2017, and quarterly
221 thereafter. Data must be submitted for each attorney funded by
222 the appropriation and grouped by case type, including Division
223 of Investigative and Forensic Services insurance fraud cases,
224 other insurance fraud cases, and cases not involving insurance
225 fraud. For each type of case, the data must include the number
226 of cases in which an information has been filed; the number of
227 cases pending at pretrial or intake, the number of cases in
228 which the attorney is assisting in the investigation; the number
229 of cases closed or disposed of during the prior quarter; the
230 disposition of the cases closed during the prior quarter; and
231 the number of cases currently pending in a pretrial diversion
232 program.
233 (2) The Division of Investigative and Forensic Services
234 must report the data collected pursuant to subsection (1) for
235 the year ending June 30, to the Executive Office of the
236 Governor, the Speaker of the House of Representatives, and the
237 President of the Senate by September 1, 2018, and annually
238 thereafter.
239 Section 3. Section 641.221, Florida Statutes, is amended to
240 read:
241 641.221 Continued eligibility for certificate of
242 authority.—
243 (1) In order to maintain its eligibility for a certificate
244 of authority, a health maintenance organization shall continue
245 to meet all conditions required to be met under this part and
246 the rules promulgated thereunder for the initial application for
247 and issuance of its certificate of authority under s. 641.22.
248 (2) In order to maintain eligibility for a certificate of
249 authority, a health maintenance organization authorized under
250 the Florida Insurance Code to exclusively market, sell, or offer
251 to sell Medicare Advantage plans in this state shall be actively
252 engaged in managed care within 24 months after licensure, shall
253 designate and maintain at least one primary anti-fraud employee,
254 and shall adopt an anti-fraud plan. The Office of Insurance
255 Regulation may extend the period of eligibility upon written
256 request.
257 Section 4. Paragraph (m) of subsection (1) of section
258 626.9541, Florida Statutes, is amended to read:
259 626.9541 Unfair methods of competition and unfair or
260 deceptive acts or practices defined.—
261 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
262 ACTS.—The following are defined as unfair methods of competition
263 and unfair or deceptive acts or practices:
264 (m) Advertising and promotional gifts and charitable
265 contributions permitted.—
266 1. No provision of paragraph (f), paragraph (g), or
267 paragraph (h) shall be deemed to prohibit a licensed insurer or
268 its agent from:
269 a. Giving to insureds, prospective insureds, and others,
270 for the purpose of advertising, any article of merchandise,
271 goods, wares, gift cards, gift certificates, event tickets,
272 anti-fraud or loss mitigation services, and other items with a
273 total value of $100 or less per customer or prospective customer
274 within 1 calendar year having a value of not more than $25.
275 b. Making charitable contributions, as defined in s. 170(c)
276 of the Internal Revenue Code, on behalf of insureds or
277 prospective insureds of up to $100 per insured or prospective
278 insured each calendar year.
279 2. A title insurance agent or title insurance agency, as
280 those terms are defined in s. 626.841, or a title insurer, as
281 defined in s. 627.7711, may not give to insureds, prospective
282 insureds, or others, for the purpose of advertising, any article
283 of merchandise having a value in excess of $25. A person or
284 entity governed by this subparagraph is exempt from subparagraph
285 1.
286 Section 5. Section 641.3915, Florida Statutes, is amended
287 to read:
288 641.3915 Health maintenance organization anti-fraud plans
289 and investigative units.—Each authorized health maintenance
290 organization and applicant for a certificate of authority shall
291 comply with the provisions of ss. 626.989 and 626.9891 as though
292 such organization or applicant were an authorized insurer. For
293 purposes of this section, the reference to the year 1996 in s.
294 626.9891 means the year 2000 and the reference to the year 1995
295 means the year 1999.
296 Section 6. Present subsections (2) through (7) of section
297 626.9911, Florida Statutes, are renumbered as subsections (3)
298 through (8), respectively, present subsections (8) through (14)
299 of that section are renumbered as subsections (10) through (16),
300 respectively, and new subsections (2) and (9) are added to that
301 section, to read:
302 626.9911 Definitions.—As used in this act, the term:
303 (2) “Fraudulent viatical settlement act” means an act or
304 omission committed by a person who knowingly, or with intent to
305 defraud for the purpose of depriving another of property or for
306 pecuniary gain, commits or allows an employee or agent to commit
307 any of the following acts:
308 (a) Presenting, causing to be presented, or preparing with
309 the knowledge or belief that it will be presented to or by
310 another person, false or concealed material information as part
311 of, in support of, or concerning a fact material to:
312 1. An application for the issuance of a viatical settlement
313 contract or a life insurance policy;
314 2. The underwriting of a viatical settlement contract or a
315 life insurance policy;
316 3. A claim for payment or benefit pursuant to a viatical
317 settlement contract or a life insurance policy;
318 4. Premiums paid on a life insurance policy;
319 5. Payments and changes in ownership or beneficiary made in
320 accordance with the terms of a viatical settlement contract or a
321 life insurance policy;
322 6. The reinstatement or conversion of a life insurance
323 policy;
324 7. The solicitation, offer, effectuation, or sale of a
325 viatical settlement contract or a life insurance policy;
326 8. The issuance of written evidence of a viatical
327 settlement contract or a life insurance policy; or
328 9. A financing transaction for a viatical settlement
329 contract or life insurance policy.
330 (b) Employing a plan, financial structure, device, scheme,
331 or artifice relating to viaticated policies for the purpose of
332 perpetrating fraud.
333 (c) Engaging in a stranger-originated life insurance
334 practice.
335 (d) Failing to disclose, upon request by an insurer, that
336 the prospective insured has undergone a life expectancy
337 evaluation by a person other than the insurer or its authorized
338 representatives in connection with the issuance of the life
339 insurance policy.
340 (e) Perpetuating a fraud or preventing the detection of a
341 fraud by:
342 1. Removing, concealing, altering, destroying, or
343 sequestering from the office the assets or records of a licensee
344 or other person engaged in the business of viatical settlements;
345 2. Misrepresenting or concealing the financial condition of
346 a licensee, financing entity, insurer, or other person;
347 3. Transacting in the business of viatical settlements in
348 violation of laws requiring a license, certificate of authority,
349 or other legal authority to transact such business; or
350 4. Filing with the office or the equivalent chief insurance
351 regulatory official of another jurisdiction a document that
352 contains false information or conceals information about a
353 material fact from the office or other regulatory official.
354 (f) Embezzlement, theft, misappropriation, or conversion of
355 moneys, funds, premiums, credits, or other property of a
356 viatical settlement provider, insurer, insured, viator,
357 insurance policyowner, or other person engaged in the business
358 of viatical settlements or life insurance.
359 (g) Entering into, negotiating, brokering, or otherwise
360 dealing in a viatical settlement contract, the subject of which
361 is a life insurance policy that was obtained based on
362 information that was falsified or concealed for the purpose of
363 defrauding the policy’s issuer, viatical settlement provider, or
364 viator.
365 (h) Facilitating the viator’s change of residency state to
366 avoid the provisions of this act.
367 (i) Facilitating or causing the creation of a trust with a
368 non-Florida or other nonresident entity for the purpose of
369 owning a life insurance policy covering a Florida resident to
370 avoid the provisions of this act.
371 (j) Facilitating or causing the transfer of the ownership
372 of an insurance policy covering a Florida resident to a trust
373 with a situs outside this state or to another nonresident entity
374 to avoid the provisions of this act.
375 (k) Applying for or obtaining a loan that is secured
376 directly or indirectly by an interest in a life insurance policy
377 with intent to defraud, for the purpose of depriving another of
378 property or for pecuniary gain.
379 (l) Attempting to commit, assisting, aiding, or abetting in
380 the commission of, or conspiring to commit, an act or omission
381 specified in this subsection.
382 (9) “Stranger-originated life insurance practice” means an
383 act, practice, arrangement, or agreement to initiate a life
384 insurance policy for the benefit of a third-party investor who,
385 at the time of policy origination, has no insurable interest in
386 the insured. Stranger-originated life insurance practices
387 include, but are not limited to:
388 (a) The purchase of a life insurance policy with resources
389 or guarantees from or through a person who, at the time of such
390 policy’s inception, could not lawfully initiate the policy and
391 the execution of a verbal or written arrangement or agreement to
392 directly or indirectly transfer the ownership of such policy or
393 policy benefits to a third party.
394 (b) The creation of a trust or other entity that has the
395 appearance of an insurable interest in order to initiate
396 policies for investors, in violation of insurable interest laws
397 and the prohibition against wagering on life.
398 Section 7. Subsection (7) of section 626.9924, Florida
399 Statutes, is amended to read:
400 626.9924 Viatical settlement contracts; procedures;
401 rescission.—
402 (7) At any time during the contestable period, within 20
403 days after a viator executes documents necessary to transfer
404 rights under an insurance policy or within 20 days of any
405 agreement, option, promise, or any other form of understanding,
406 express or implied, to viaticate the policy, the provider must
407 give notice to the insurer of the policy that the policy has or
408 will become a viaticated policy. The notice must be accompanied
409 by the documents required by s. 626.99287 626.99287(5)(a) in
410 their entirety.
411 Section 8. Subsection (2) of section 626.99245, Florida
412 Statutes, is amended to read:
413 626.99245 Conflict of regulation of viaticals.—
414 (2) This section does not affect the requirement of ss.
415 626.9911(14) 626.9911(12) and 626.9912(1) that a viatical
416 settlement provider doing business from this state must obtain a
417 viatical settlement license from the office. As used in this
418 subsection, the term “doing business from this state” includes
419 effectuating viatical settlement contracts from offices in this
420 state, regardless of the state of residence of the viator.
421 Section 9. Subsection (1) of section 626.99275, Florida
422 Statutes, is amended to read:
423 626.99275 Prohibited practices; penalties.—
424 (1) It is unlawful for a any person to:
425 (a) To Knowingly enter into, broker, or otherwise deal in a
426 viatical settlement contract the subject of which is a life
427 insurance policy, knowing that the policy was obtained by
428 presenting materially false information concerning any fact
429 material to the policy or by concealing, for the purpose of
430 misleading another, information concerning any fact material to
431 the policy, where the viator or the viator’s agent intended to
432 defraud the policy’s issuer.
433 (b) To Knowingly or with the intent to defraud, for the
434 purpose of depriving another of property or for pecuniary gain,
435 issue or use a pattern of false, misleading, or deceptive life
436 expectancies.
437 (c) To Knowingly engage in any transaction, practice, or
438 course of business intending thereby to avoid the notice
439 requirements of s. 626.9924(7).
440 (d) To Knowingly or intentionally facilitate the change of
441 state of residency of a viator to avoid the provisions of this
442 chapter.
443 (e) Knowingly enter into a viatical settlement contract
444 before the application for or issuance of a life insurance
445 policy that is the subject of a viatical settlement contract or
446 during an applicable period specified in s. 626.99287(1) or (2),
447 unless the viator provides a sworn affidavit and accompanying
448 independent evidentiary documentation in accordance with s.
449 626.99287.
450 (f) Engage in a fraudulent viatical settlement act, as
451 defined in s. 626.9911.
452 (g) Knowingly issue, solicit, market, or otherwise promote
453 the purchase of a life insurance policy for the purpose of or
454 with an emphasis on selling the policy to a third party.
455 (h) Engage in a stranger-originated life insurance
456 practice, as defined in s. 626.9911.
457 Section 10. Section 626.99287, Florida Statutes, is amended
458 to read:
459 626.99287 Contestability of viaticated policies.—
460 (1) Except as hereinafter provided, if a viatical
461 settlement contract is entered into within the 2-year period
462 commencing with the date of issuance of the insurance policy or
463 certificate to be acquired, the viatical settlement contract is
464 void and unenforceable by either party.
465 (2) Except as hereinafter provided, if a viatical
466 settlement policy is subject to a loan secured directly or
467 indirectly by an interest in the policy within a 5-year period
468 commencing on the date of issuance of the policy or certificate,
469 the viatical settlement contract is void and unenforceable by
470 either party.
471 (3) Notwithstanding the limitations in subsections (1) and
472 (2) this limitation, such a viatical settlement contract is not
473 void and unenforceable if the viator provides a sworn affidavit
474 and accompanying independent evidentiary documentation
475 certifying to the viatical settlement provider that one or more
476 of the following conditions were met during the periods
477 applicable to the viaticated policy as stated in subsections (1)
478 or (2):
479 (a)(1) The policy was issued upon the owner’s exercise of
480 conversion rights arising out of a group or term policy, if the
481 total time covered under the prior policy is at least 60 months.
482 The time covered under a group policy must be calculated without
483 regard to any change in insurance carriers, provided the
484 coverage has been continuous and under the same group
485 sponsorship.;
486 (b)(2) The owner of the policy is a charitable organization
487 exempt from taxation under 26 U.S.C. s. 501(c)(3).;
488 (3) The owner of the policy is not a natural person;
489 (4) The viatical settlement contract was entered into
490 before July 1, 2000;
491 (c)(5) The viator certifies by producing independent
492 evidence to the viatical settlement provider that one or more of
493 the following conditions were have been met within the 2-year
494 period:
495 (a)1. The viator or insured is terminally or chronically
496 ill diagnosed with an illness or condition that is either:
497 a. Catastrophic or life threatening; or
498 b. Requires a course of treatment for a period of at least
499 3 years of long-term care or home health care; and
500 2. the condition was not known to the insured at the time
501 the life insurance contract was entered into;.
502 2.(b) The viator’s spouse dies;
503 3.(c) The viator divorces his or her spouse;
504 4.(d) The viator retires from full-time employment;
505 5.(e) The viator becomes physically or mentally disabled
506 and a physician determines that the disability prevents the
507 viator from maintaining full-time employment;
508 6.(f) The owner of the policy was the insured’s employer at
509 the time the policy or certificate was issued and the employment
510 relationship terminated;
511 7.(g) A final order, judgment, or decree is entered by a
512 court of competent jurisdiction, on the application of a
513 creditor of the viator, adjudicating the viator bankrupt or
514 insolvent, or approving a petition seeking reorganization of the
515 viator or appointing a receiver, trustee, or liquidator to all
516 or a substantial part of the viator’s assets; or
517 8.(h) The viator experiences a significant decrease in
518 income which is unexpected by the viator and which impairs his
519 or her reasonable ability to pay the policy premium.
520 (d) The viator entered into a viatical settlement contract
521 more than 2 years after the policy’s issuance date and, with
522 respect to the policy, at all times before the date that is 2
523 years after policy issuance, each of the following conditions is
524 met:
525 1. Policy premiums have been funded exclusively with
526 unencumbered assets, including an interest in the life insurance
527 policy being financed only to the extent of its net cash
528 surrender value, provided by, or fully recourse liability
529 incurred by, the insured;
530 2. There is no agreement or understanding with any other
531 person to guarantee any such liability or to purchase, or stand
532 ready to purchase, the policy, including through an assumption
533 or forgiveness of the loan; and
534 3. Neither the insured or the policy has been evaluated for
535 settlement.
536
537 If the viatical settlement provider submits to the insurer a
538 copy of the viator’s or owner’s certification described above,
539 then the provider submits a request to the insurer to effect the
540 transfer of the policy or certificate to the viatical settlement
541 provider, the viatical settlement agreement shall not be void or
542 unenforceable by operation of this section. The insurer shall
543 timely respond to such request. Nothing in this section shall
544 prohibit an insurer from exercising its right during the
545 contestability period to contest the validity of any policy on
546 grounds of fraud.
547 Section 11. Section 626.99289, Florida Statutes, is created
548 to read:
549 626.99289 Void and unenforceable contracts, agreements,
550 arrangements, and transactions.—Notwithstanding s. 627.455, a
551 contract, agreement, arrangement, or transaction, including, but
552 not limited to, a financing agreement or any other arrangement
553 or understanding entered into, whether written or verbal, for
554 the furtherance or aid of a stranger-originated life insurance
555 practice is void and unenforceable.
556 Section 12. Section 626.99291, Florida Statutes, is created
557 to read:
558 626.99291 Contestability of life insurance policies.
559 Notwithstanding s. 627.455, a life insurer may contest a life
560 insurance policy if the policy was obtained by a stranger
561 originated life insurance practice, as defined in s. 626.9911.
562 Section 13. Section 626.99292, Florida Statutes, is created
563 to read:
564 626.99292 Notice to insureds.—
565 (1) A life insurer shall provide an individual life
566 insurance policyholder with a statement informing him or her
567 that if he or she is considering making changes in the status of
568 his or her policy, he or she should consult with a licensed
569 insurance or financial advisor. The statement may accompany or
570 be included in notices or mailings otherwise provided to the
571 policyholder.
572 (2) The statement must also advise the policyholder that he
573 or she may contact the office for more information and include a
574 website address or other location or manner by which the
575 policyholder may contact the office.
576 Section 14. Effective January 1, 2019, section 627.744,
577 Florida Statutes, is amended to read:
578 627.744 Required Preinsurance inspection of private
579 passenger motor vehicles.—
580 (1) A private passenger motor vehicle insurance policy
581 providing physical damage coverage, including collision or
582 comprehensive coverage, may not be issued in this state unless
583 the insurer has inspected the motor vehicle in accordance with
584 this section.
585 (2) This section does not apply:
586 (a) To a policy for a policyholder who has been insured for
587 2 years or longer, without interruption, under a private
588 passenger motor vehicle policy that provides physical damage
589 coverage for any vehicle if the agent of the insurer verifies
590 the previous coverage.
591 (b) To a new, unused motor vehicle purchased or leased from
592 a licensed motor vehicle dealer or leasing company. The insurer
593 may require:
594 1. A bill of sale, buyer’s order, or lease agreement that
595 contains a full description of the motor vehicle; or
596 2. A copy of the title or registration that establishes
597 transfer of ownership from the dealer or leasing company to the
598 customer and a copy of the window sticker.
599
600 For the purposes of this paragraph, the physical damage coverage
601 on the motor vehicle may not be suspended during the term of the
602 policy due to the applicant’s failure to provide or the
603 insurer’s option not to require the documents. However, if the
604 insurer requires a document under this paragraph at the time the
605 policy is issued, payment of a claim may be conditioned upon the
606 receipt by the insurer of the required documents, and no
607 physical damage loss occurring after the effective date of the
608 coverage may be payable until the documents are provided to the
609 insurer.
610 (c) To a temporary substitute motor vehicle.
611 (d) To a motor vehicle which is leased for less than 6
612 months, if the insurer receives the lease or rental agreement
613 containing a description of the leased motor vehicle, including
614 its condition. Payment of a physical damage claim is conditioned
615 upon receipt of the lease or rental agreement.
616 (e) To a vehicle that is 10 years old or older, as
617 determined by reference to the model year.
618 (f) To any renewal policy.
619 (g) To a motor vehicle policy issued in a county with a
620 1988 estimated population of less than 500,000.
621 (h) To any other vehicle or policy exempted by rule of the
622 commission. The commission may base a rule under this paragraph
623 only on a determination that the likelihood of a fraudulent
624 physical damage claim is remote or that the inspection would
625 cause a serious hardship to the insurer or the applicant.
626 (i) When the insurer’s authorized inspection service has no
627 inspection facility either in the municipality in which the
628 automobile is principally garaged or within 10 miles of such
629 municipality.
630 (j) When the insured vehicle is insured under a
631 commercially rated policy that insures five or more vehicles.
632 (k) When an insurance producer is transferring a book of
633 business from one insurer to another.
634 (l) When an individual insured’s coverage is being
635 transferred and initiated by a producer to a new insurer.
636 (3) This subsection does not prohibit an insurer from
637 requiring a preinsurance inspection of any motor vehicle as a
638 condition of issuance of physical damage coverage.
639 (3)(4) The inspection required by this section shall be
640 provided by the insurer or by a person or organization
641 authorized by the insurer. The applicant may be required to pay
642 the cost of the inspection, not to exceed $5. The inspection
643 shall be recorded on a form prescribed by the commission, and
644 the form or a copy shall be retained by the insurer with its
645 policy records for the insured. The insurer shall provide a copy
646 of the form to the insured upon request. Any inspection fee paid
647 directly by the applicant may not be considered part of the
648 premium. However, an insurer that provides the inspection at no
649 cost to the applicant may include the expense of the inspection
650 within a rate filing.
651 (4)(5) The inspection shall include at least the following:
652 (a) Taking a physical imprint of the vehicle identification
653 number of the vehicle or otherwise recording the vehicle
654 identification number in a manner prescribed by the commission.
655 (b) Recording the presence of accessories required by the
656 commission to be recorded.
657 (c) Recording the locations of and a description of
658 existing damage to the vehicle.
659 (5)(6) An insurer may defer an inspection for 30 calendar
660 days following the effective date of coverage for a new policy,
661 but not for a renewal policy, and for additional or replacement
662 vehicles to an existing policy, if an inspection at the time of
663 the request for coverage would create a serious inconvenience
664 for the applicant and such hardship is documented in the
665 insured’s policy record.
666 (6)(7) The commission may, by rule, establish such
667 procedures and notice requirements that it finds necessary to
668 implement this section.
669 (7) Notwithstanding any other provision of this section, an
670 insurer may opt out of the inspection requirements of this
671 section. An insurer opting out of the inspection must file a
672 manual rule with the office indicating that the insurer will not
673 participate in the inspection program under this section. An
674 insurer that files such a manual rule with the office may
675 establish its own preinsurance inspection requirements as a
676 condition to issuing a private passenger motor vehicle insurance
677 policy. The insurer’s preinsurance inspection requirements must
678 be included in the manual rule filed with the office. An insurer
679 opting out of the inspection requirements of this section may
680 not require an applicant to pay for the cost of an inspection.
681 (8) The Division of Insurance Fraud of the Department of
682 Financial Services shall provide a report of data from the
683 required preinsurance inspection of motor vehicles to the
684 Governor, the President of the Senate, and the Speaker of the
685 House of Representatives by December 1, 2016.
686 (a) The data must include, but need not be limited to:
687 1. A written estimate of the total cost incurred by
688 insurers and policyholders in order to comply with the
689 inspections.
690 2. A written estimate of the total cost incurred by
691 insurers to have their motor vehicles inspected.
692 3. Documentation regarding the total premium savings for
693 policyholders as a result of the inspections.
694 4. Documentation of the total number of inspected motor
695 vehicles that had a preexisting condition.
696 5. Documentation regarding the potential fraud in motor
697 vehicle claims incurred within the first 125 days after issuance
698 of a new policy.
699 6. Documentation of the total number of referrals of
700 fraudulent acts to the National Insurance Crime Bureau by
701 preinsurance inspectors during the past 5 years.
702 (b) The Legislature may use the report data in determining
703 the future public necessity for this section.
704 Section 15. Effective September 1, 2017, section 641.3915,
705 Florida Statutes, is amended to read:
706 641.3915 Health maintenance organization anti-fraud plans
707 and investigative units.—Each authorized health maintenance
708 organization and applicant for a certificate of authority shall
709 comply with the provisions of ss. 626.989 and 626.9891 as though
710 such organization or applicant were an authorized insurer. For
711 purposes of this section, the reference to the year 1996 in s.
712 626.9891 means the year 2000 and the reference to the year 1995
713 means the year 1999.
714 Section 16. Except as otherwise expressly provided in this
715 act, this act shall take effect upon becoming a law.
716
717 ================= T I T L E A M E N D M E N T ================
718 And the title is amended as follows:
719 Delete everything before the enacting clause
720 and insert:
721 A bill to be entitled
722 An act relating to prohibited insurance acts;
723 reordering and amending s. 626.9891, F.S.; defining
724 and revising definitions; requiring every insurer to
725 designate at least one primary anti-fraud employee for
726 certain purposes; requiring insurers to adopt an anti
727 fraud plan; revising insurer requirements in providing
728 anti-fraud information to the Department of Financial
729 Services; requiring specified information to be filed
730 annually with the department; revising the information
731 to be provided by insurers who write workers’
732 compensation insurance; requiring each insurer to
733 provide annual anti-fraud education and training;
734 requiring insurers who submit an application for a
735 certificate of authority after a specified date to
736 comply with the section; providing penalties for the
737 failure to comply with requirements of the section;
738 requiring the Division of Investigative and Forensic
739 Services of the department to create, by a specified
740 date, a report detailing best practices for the
741 detection, investigation, prevention, and reporting of
742 insurance fraud and other fraudulent insurance acts;
743 requiring such report to be updated at certain
744 intervals; specifying required information in the
745 report; requiring the department to adopt rules
746 relating to insurers’ annual reporting of certain
747 data; creating s. 626.9896, F.S.; requiring the
748 department to collect specified data from certain
749 state attorney offices; requiring such state attorneys
750 to submit such data at specified intervals; requiring
751 the Division of Investigative and Forensic Services to
752 provide an annual report to the Executive Office of
753 the Governor, the Speaker of the House of
754 Representatives, and the President of the Senate;
755 amending s. 641.221, F.S.; requiring a health
756 maintenance organization authorized to exclusively
757 market, sell, or offer to sell Medicare Advantage
758 plans in this state to meet certain criteria to
759 maintain eligibility for a certificate of authority;
760 authorizing the Office of Insurance Regulation to
761 extend the period of eligibility; amending s.
762 626.9541, F.S.; revising a limitation on licensed
763 insurers and their agents relating to advertising and
764 promotional gifts given to insureds, prospective
765 insureds, and others; authorizing such insurers and
766 agents to make specified charitable contributions on
767 behalf of insureds or prospective insureds; specifying
768 a limitation on the value of merchandise that may be
769 given by title insurance agents or title insurance
770 agencies to insureds, prospective insureds, and
771 others; providing applicability; amending s. 641.3915,
772 F.S.; deleting an obsolete provision; amending s.
773 626.9911, F.S.; defining the terms “fraudulent
774 viatical settlement act” and “stranger-originated life
775 insurance practice” for purposes of provisions
776 relating to the Viatical Settlement Act; amending ss.
777 626.9924 and 626.99245, F.S.; conforming cross
778 references; amending s. 626.99275, F.S.; providing
779 additional prohibited acts related to viatical
780 settlement contracts; amending s. 626.99287, F.S.;
781 providing that a viatical settlement contract is void
782 and unenforceable by either party if the viatical
783 settlement policy is subject, within a specified
784 timeframe, to a loan secured by an interest in the
785 policy; revising conditions and requirements in which
786 viatical settlement contracts entered into within
787 specified timeframes are valid and enforceable;
788 deleting provisions related to the transfer of
789 insurance policies or certificates to viatical
790 settlement providers; creating s. 626.99289, F.S.;
791 providing that certain contracts, agreements,
792 arrangements, or transactions relating to stranger
793 originated life insurance practices are void and
794 unenforceable; creating s. 626.99291, F.S.;
795 authorizing a life insurer to contest policies
796 obtained through such practices; creating s.
797 626.99292, F.S.; requiring life insurers to provide a
798 specified statement to individual life insurance
799 policyholders; authorizing such statements to
800 accompany or be included in notices or mailings
801 provided to the policyholders; requiring such
802 statements to include contact information; amending s.
803 627.744, F.S.; deleting a provision that provides
804 construction; authorizing insurers to opt out of the
805 preinsurance inspection requirements for private
806 passenger motor vehicles; requiring insurers opting
807 out to file a certain manual rule with the Office of
808 Insurance Regulation; authorizing such insurers to
809 establish their own preinsurance inspection
810 requirements, which must be included in the filed
811 manual rule; prohibiting such insurers from requiring
812 applicants to pay for the cost of inspections;
813 deleting an obsolete provision; amending s. 641.3915,
814 F.S.; deleting obsolete provisions; providing
815 effective dates.