Florida Senate - 2017                        COMMITTEE AMENDMENT
       Bill No. CS for SB 1012
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/26/2017           .                                

       The Committee on Appropriations (Brandes) recommended the
    1         Senate Amendment (with title amendment)
    3         Delete lines 41 - 308
    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).
   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 line of insurance written by the insurer during
  102  the prior calendar year. The data shall be reported to the
  103  department by March 1, 2019, and annually thereafter, and must
  104  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 September 1, 2017, section 626.9896,
  212  Florida Statutes, is created to read:
  213         626.9896Insurance Fraud Dedicated Prosecutor Program.—
  214         (1)LEGISLATIVE INTENT.—The Legislature recognizes the
  215  increasing problem of insurance fraud, the need to adequately
  216  investigate and prosecute insurance fraud, and the need to
  217  create a program dedicated to the prosecution of insurance
  218  fraud. The Legislature recognizes that the Division of
  219  Investigative and Forensic Services of the department can
  220  efficiently and effectively implement and monitor such a
  221  program, and can direct and reallocate resources as insurance
  222  fraud trends change and demand for prosecutorial resources shift
  223  between judicial circuits.
  225  PROSECUTOR PROGRAM.—There is created within the department a
  226  grant program to fund the Insurance Fraud Dedicated Prosecutor
  227  Program. The purpose of the program is to provide grants to
  228  state attorneys’ offices to fund attorney and paralegal
  229  positions that are dedicated exclusively to the prosecution of
  230  insurance fraud. The program shall consist only of funds
  231  appropriated by the state specifically for this program.
  232         (3)GRANT APPLICATIONS.—Beginning in 2018, a state
  233  attorney’s office seeking grant funds must submit an application
  234  to the Division of Investigative and Forensic Services detailing
  235  the proposed number of dedicated prosecutors and paralegals
  236  requested for the prosecution of insurance fraud. Applications
  237  must be received by July 1 of each even-numbered year and shall
  238  identify funding needs for 2 years. Grant awards are contingent
  239  upon legislative appropriation in the Insurance Regulatory Trust
  240  Fund and Workers’ Compensation Administration Trust Fund and
  241  subject to renewal by the department. The division must compile
  242  and review the timely submitted applications to establish its
  243  legislative budget request for the program for the upcoming two
  244  years.
  245         (4)AWARD OF GRANTS.—The division is authorized to award
  246  grants to state attorneys’ offices using a formula adopted by
  247  rule of the department and based on metrics and data compiled by
  248  the division which allocate funds to the judicial circuits based
  249  on trends in insurance fraud and the performance and output
  250  measures reported as required by this section. A grant awarded
  251  to a state attorney’s office may only be used to fund attorney
  252  and paralegal positions that are dedicated exclusively to the
  253  prosecution of insurance fraud. Grants are subject to the
  254  provisions of s. 215.971. The division shall establish the
  255  annual maximum grant amount, based on funds appropriated to the
  256  department for funding the Insurance Fraud Dedicated Prosecutor
  257  Program.
  258         (5)REPORTING.—The division must track and report on the
  259  effectiveness and efficiency of each state attorney’s office’s
  260  use of the awarded grant funds. To help complete the report,
  261  each state attorney’s office that is awarded a grant under this
  262  section must submit performance and output information as
  263  determined by the division. The report must be provided to the
  264  Executive Office of the Governor, the Speaker of the House of
  265  Representatives, and the President of the Senate by September 1,
  266  2020, and annually thereafter. The report must include, but is
  267  not limited to, the following:
  268         (a)The amount of grant funds received and expended by each
  269  state attorney’s office;
  270         (b)A description of the purposes for which the funds were
  271  expended, including payment of salaries, expenses, and any other
  272  costs needed to support the delivery of services;
  273         (c)The results achieved from the expenditures made,
  274  including the number of complaints filed, the number of
  275  investigations initiated, the number of arrests made, the number
  276  of convictions, and the amount of restitution or fines paid as a
  277  result of the cases presented for prosecution.
  278         (6)RULES.—The department may adopt rules pursuant to ss.
  279  120.536(1) and 120.54 for the administration and implementation
  280  of the Insurance Fraud Dedicated Prosecutor Program. Such rules
  281  may establish procedures for the Insurance Fraud Dedicated
  282  Prosecutor Program, including forms to be used by the state
  283  attorney’s offices. The department may establish a formula for
  284  allocating grant funds, eligibility criteria, renewal
  285  requirements, and standards for evaluating the effectiveness and
  286  efficiency of expended funds.
  287         Section 3. Present subsections (2) through (7) of section
  288  626.9911, Florida Statutes, are renumbered as subsections (3)
  289  through (8), respectively, present subsections (8) through (14)
  290  of that section are renumbered as subsections (10) through (16),
  291  respectively, and new subsections (2) and (9) are added to that
  292  section, to read:
  293         626.9911 Definitions.—As used in this act, the term:
  294         (2)“Fraudulent viatical settlement act” means an act or
  295  omission committed by a person who knowingly, or with intent to
  296  defraud for the purpose of depriving another of property or for
  297  pecuniary gain, commits or allows an employee or agent to commit
  298  any of the following acts:
  299         (a)Presenting, causing to be presented, or preparing with
  300  the knowledge or belief that it will be presented to or by
  301  another person, false or concealed material information as part
  302  of, in support of, or concerning a fact material to:
  303         1.An application for the issuance of a viatical settlement
  304  contract or a life insurance policy;
  305         2.The underwriting of a viatical settlement contract or a
  306  life insurance policy;
  307         3.A claim for payment or benefit pursuant to a viatical
  308  settlement contract or a life insurance policy;
  309         4.Premiums paid on a life insurance policy;
  310         5.Payments and changes in ownership or beneficiary made in
  311  accordance with the terms of a viatical settlement contract or a
  312  life insurance policy;
  313         6.The reinstatement or conversion of a life insurance
  314  policy;
  315         7.The solicitation, offer, effectuation, or sale of a
  316  viatical settlement contract or a life insurance policy;
  317         8.The issuance of written evidence of a viatical
  318  settlement contract or a life insurance policy; or
  319         9.A financing transaction for a viatical settlement
  320  contract or life insurance policy.
  321         (b)Employing a plan, financial structure, device, scheme,
  322  or artifice relating to viaticated policies for the purpose of
  323  perpetrating fraud.
  324         (c)Engaging in a stranger-originated life insurance
  325  practice.
  326         (d)Failing to disclose, upon request by an insurer, that
  327  the prospective insured has undergone a life expectancy
  328  evaluation by a person other than the insurer or its authorized
  329  representatives in connection with the issuance of the life
  330  insurance policy.
  331         (e)Perpetuating a fraud or preventing the detection of a
  332  fraud by:
  333         1.Removing, concealing, altering, destroying, or
  334  sequestering from the office the assets or records of a licensee
  335  or other person engaged in the business of viatical settlements;
  336         2.Misrepresenting or concealing the financial condition of
  337  a licensee, financing entity, insurer, or other person;
  338         3.Transacting in the business of viatical settlements in
  339  violation of laws requiring a license, certificate of authority,
  340  or other legal authority to transact such business; or
  341         4.Filing with the office or the equivalent chief insurance
  342  regulatory official of another jurisdiction a document that
  343  contains false information or conceals information about a
  344  material fact from the office or other regulatory official.
  345         (f)Embezzlement, theft, misappropriation, or conversion of
  346  moneys, funds, premiums, credits, or other property of a
  347  viatical settlement provider, insurer, insured, viator,
  348  insurance policyowner, or other person engaged in the business
  349  of viatical settlements or life insurance.
  350         (g)Entering into, negotiating, brokering, or otherwise
  351  dealing in a viatical settlement contract, the subject of which
  352  is a life insurance policy that was obtained based on
  353  information that was falsified or concealed for the purpose of
  354  defrauding the policy’s issuer, viatical settlement provider, or
  355  viator.
  356         (h)Facilitating the viator’s change of residency state to
  357  avoid the provisions of this act.
  358         (i)Facilitating or causing the creation of a trust with a
  359  non-Florida or other nonresident entity for the purpose of
  360  owning a life insurance policy covering a Florida resident to
  361  avoid the provisions of this act.
  362         (j)Facilitating or causing the transfer of the ownership
  363  of an insurance policy covering a Florida resident to a trust
  364  with a situs outside this state or to another nonresident entity
  365  to avoid the provisions of this act.
  366         (k)Applying for or obtaining a loan that is secured
  367  directly or indirectly by an interest in a life insurance policy
  368  with intent to defraud, for the purpose of depriving another of
  369  property or for pecuniary gain.
  370         (l)Attempting to commit, assisting, aiding, or abetting in
  371  the commission of, or conspiring to commit, an act or omission
  372  specified in this subsection.
  373         (9)“Stranger-originated life insurance practice” means an
  374  act, practice, arrangement, or agreement to initiate a life
  375  insurance policy for the benefit of a third-party investor who,
  376  at the time of policy origination, has no insurable interest in
  377  the insured. Stranger-originated life insurance practices
  378  include, but are not limited to:
  379         (a)The purchase of a life insurance policy with resources
  380  or guarantees from or through a person who, at the time of such
  381  policy’s inception, could not lawfully initiate the policy and
  382  the execution of a verbal or written arrangement or agreement to
  383  directly or indirectly transfer the ownership of such policy or
  384  policy benefits to a third party.
  385         (b)The creation of a trust or other entity that has the
  386  appearance of an insurable interest in order to initiate
  387  policies for investors, in violation of insurable interest laws
  388  and the prohibition against wagering on life.
  389         Section 4. Subsection (7) of section 626.9924, Florida
  390  Statutes, is amended to read:
  391         626.9924 Viatical settlement contracts; procedures;
  392  rescission.—
  393         (7) At any time during the contestable period, within 20
  394  days after a viator executes documents necessary to transfer
  395  rights under an insurance policy or within 20 days of any
  396  agreement, option, promise, or any other form of understanding,
  397  express or implied, to viaticate the policy, the provider must
  398  give notice to the insurer of the policy that the policy has or
  399  will become a viaticated policy. The notice must be accompanied
  400  by the documents required by s. 626.99287 626.99287(5)(a) in
  401  their entirety.
  402         Section 5. Subsection (2) of section 626.99245, Florida
  403  Statutes, is amended to read:
  404         626.99245 Conflict of regulation of viaticals.—
  405         (2) This section does not affect the requirement of ss.
  406  626.9911(14) 626.9911(12) and 626.9912(1) that a viatical
  407  settlement provider doing business from this state must obtain a
  408  viatical settlement license from the office. As used in this
  409  subsection, the term “doing business from this state” includes
  410  effectuating viatical settlement contracts from offices in this
  411  state, regardless of the state of residence of the viator.
  412         Section 6. Subsection (1) of section 626.99275, Florida
  413  Statutes, is amended to read:
  414         626.99275 Prohibited practices; penalties.—
  415         (1) It is unlawful for a any person to:
  416         (a) To Knowingly enter into, broker, or otherwise deal in a
  417  viatical settlement contract the subject of which is a life
  418  insurance policy, knowing that the policy was obtained by
  419  presenting materially false information concerning any fact
  420  material to the policy or by concealing, for the purpose of
  421  misleading another, information concerning any fact material to
  422  the policy, where the viator or the viator’s agent intended to
  423  defraud the policy’s issuer.
  424         (b) To Knowingly or with the intent to defraud, for the
  425  purpose of depriving another of property or for pecuniary gain,
  426  issue or use a pattern of false, misleading, or deceptive life
  427  expectancies.
  428         (c) To Knowingly engage in any transaction, practice, or
  429  course of business intending thereby to avoid the notice
  430  requirements of s. 626.9924(7).
  431         (d) To Knowingly or intentionally facilitate the change of
  432  state of residency of a viator to avoid the provisions of this
  433  chapter.
  434         (e)Knowingly enter into a viatical settlement contract
  435  before the application for or issuance of a life insurance
  436  policy that is the subject of a viatical settlement contract or
  437  during an applicable period specified in s. 626.99287(1) or (2),
  438  unless the viator provides a sworn affidavit and accompanying
  439  independent evidentiary documentation in accordance with s.
  440  626.99287.
  441         (f)Engage in a fraudulent viatical settlement act, as
  442  defined in s. 626.9911.
  443         (g)Knowingly issue, solicit, market, or otherwise promote
  444  the purchase of a life insurance policy for the purpose of or
  445  with an emphasis on selling the policy to a third party.
  446         (h)Engage in a stranger-originated life insurance
  447  practice, as defined in s. 626.9911.
  448         Section 7. Section 626.99287, Florida Statutes, is amended
  449  to read:
  450         626.99287 Contestability of viaticated policies.—
  451         (1) Except as hereinafter provided, if a viatical
  452  settlement contract is entered into within the 2-year period
  453  commencing with the date of issuance of the insurance policy or
  454  certificate to be acquired, the viatical settlement contract is
  455  void and unenforceable by either party.
  456         (2) Except as hereinafter provided, if a viatical
  457  settlement policy is subject to a loan secured directly or
  458  indirectly by an interest in the policy within a 5-year period
  459  commencing on the date of issuance of the policy or certificate,
  460  the viatical settlement contract is void and unenforceable by
  461  either party.
  462         (3) Notwithstanding the limitations in subsections (1) and
  463  (2) this limitation, such a viatical settlement contract is not
  464  void and unenforceable if the viator provides a sworn affidavit
  465  and accompanying independent evidentiary documentation
  466  certifying to the viatical settlement provider that one or more
  467  of the following conditions were met during the periods
  468  applicable to the viaticated policy as stated in subsections (1)
  469  or (2):
  470         (a)(1) The policy was issued upon the owner’s exercise of
  471  conversion rights arising out of a group or term policy, if the
  472  total time covered under the prior policy is at least 60 months.
  473  The time covered under a group policy must be calculated without
  474  regard to any change in insurance carriers, provided the
  475  coverage has been continuous and under the same group
  476  sponsorship.;
  477         (b)(2) The owner of the policy is a charitable organization
  478  exempt from taxation under 26 U.S.C. s. 501(c)(3).;
  479         (3) The owner of the policy is not a natural person;
  480         (4) The viatical settlement contract was entered into
  481  before July 1, 2000;
  482         (c)(5) The viator certifies by producing independent
  483  evidence to the viatical settlement provider that one or more of
  484  the following conditions were have been met within the 2-year
  485  period:
  486         (a)1. The viator or insured is terminally or chronically
  487  ill diagnosed with an illness or condition that is either:
  488         a. Catastrophic or life threatening; or
  489         b. Requires a course of treatment for a period of at least
  490  3 years of long-term care or home health care; and
  491         2. the condition was not known to the insured at the time
  492  the life insurance contract was entered into;.
  493         2.(b) The viator’s spouse dies;
  494         3.(c) The viator divorces his or her spouse;
  495         4.(d) The viator retires from full-time employment;
  496         5.(e) The viator becomes physically or mentally disabled
  497  and a physician determines that the disability prevents the
  498  viator from maintaining full-time employment;
  499         6.(f) The owner of the policy was the insured’s employer at
  500  the time the policy or certificate was issued and the employment
  501  relationship terminated;
  502         7.(g) A final order, judgment, or decree is entered by a
  503  court of competent jurisdiction, on the application of a
  504  creditor of the viator, adjudicating the viator bankrupt or
  505  insolvent, or approving a petition seeking reorganization of the
  506  viator or appointing a receiver, trustee, or liquidator to all
  507  or a substantial part of the viator’s assets; or
  508         8.(h) The viator experiences a significant decrease in
  509  income which is unexpected by the viator and which impairs his
  510  or her reasonable ability to pay the policy premium.
  511         (d) The viator entered into a viatical settlement contract
  512  more than 2 years after the policy’s issuance date and, with
  513  respect to the policy, at all times before the date that is 2
  514  years after policy issuance, each of the following conditions is
  515  met:
  516         1. Policy premiums have been funded exclusively with
  517  unencumbered assets, including an interest in the life insurance
  518  policy being financed only to the extent of its net cash
  519  surrender value, provided by, or fully recourse liability
  520  incurred by, the insured;
  521         2. There is no agreement or understanding with any other
  522  person to guarantee any such liability or to purchase, or stand
  523  ready to purchase, the policy, including through an assumption
  524  or forgiveness of the loan; and
  525         3. Neither the insured or the policy has been evaluated for
  526  settlement.
  528  If the viatical settlement provider submits to the insurer a
  529  copy of the viator’s or owner’s certification described above,
  530  then the provider submits a request to the insurer to effect the
  531  transfer of the policy or certificate to the viatical settlement
  532  provider, the viatical settlement agreement shall not be void or
  533  unenforceable by operation of this section. The insurer shall
  534  timely respond to such request. Nothing in this section shall
  535  prohibit an insurer from exercising its right during the
  536  contestability period to contest the validity of any policy on
  537  grounds of fraud.
  538         Section 8. Section 626.99289, Florida Statutes, is created
  539  to read:
  540         626.99289 Void and unenforceable contracts, agreements,
  541  arrangements, and transactions.—Notwithstanding s. 627.455, a
  542  contract, agreement, arrangement, or transaction, including, but
  543  not limited to, a financing agreement or any other arrangement
  544  or understanding entered into, whether written or verbal, for
  545  the furtherance or aid of a stranger-originated life insurance
  546  practice is void and unenforceable.
  547         Section 9. Section 626.99291, Florida Statutes, is created
  548  to read:
  549         626.99291Contestability of life insurance policies.
  550  Notwithstanding s. 627.455, a life insurer may contest a life
  551  insurance policy if the policy was obtained by a stranger
  552  originated life insurance practice, as defined in s. 626.9911.
  553         Section 10. Section 626.99292, Florida Statutes, is created
  554  to read:
  555         626.99292 Notice to insureds.—
  556         (1) A life insurer shall provide an individual life
  557  insurance policyholder with a statement informing him or her
  558  that if he or she is considering making changes in the status of
  559  his or her policy, he or she should consult with a licensed
  560  insurance or financial advisor. The statement may accompany or
  561  be included in notices or mailings otherwise provided to the
  562  policyholder.
  563         (2)The statement must also advise the policyholder that he
  564  or she may contact the office for more information and include a
  565  website address or other location or manner by which the
  566  policyholder may contact the office.
  567         Section 11. Effective September 1, 2017, section 641.3915,
  568  Florida Statutes, is amended to read:
  569         641.3915 Health maintenance organization anti-fraud plans
  570  and investigative units.—Each authorized health maintenance
  571  organization and applicant for a certificate of authority shall
  572  comply with the provisions of ss. 626.989 and 626.9891 as though
  573  such organization or applicant were an authorized insurer. For
  574  purposes of this section, the reference to the year 1996 in s.
  575  626.9891 means the year 2000 and the reference to the year 1995
  576  means the year 1999.
  577         Section 12. Except as otherwise expressly provided in this
  578  act, this act shall take effect upon becoming a law.
  580  ================= T I T L E  A M E N D M E N T ================
  581  And the title is amended as follows:
  582         Delete lines 2 - 37
  583  and insert:
  584         An act relating to insurance fraud; reordering and
  585         amending s. 626.9891, F.S.; defining and revising
  586         definitions; requiring every insurer to designate at
  587         least one primary anti-fraud employee for certain
  588         purposes; requiring insurers to adopt an anti-fraud
  589         plan; revising insurer requirements in providing anti
  590         fraud information to the Department of Financial
  591         Services; requiring specified information to be filed
  592         annually with the department; revising the information
  593         to be provided by insurers who write workers’
  594         compensation insurance; requiring each insurer to
  595         provide annual anti-fraud education and training;
  596         requiring insurers who submit an application for a
  597         certificate of authority after a specified date to
  598         comply with the section; providing penalties for the
  599         failure to comply with requirements of the section;
  600         requiring the Division of Investigative and Forensic
  601         Services of the department to create, by a specified
  602         date, a report detailing best practices for the
  603         detection, investigation, prevention, and reporting of
  604         insurance fraud and other fraudulent insurance acts;
  605         requiring such report to be updated at certain
  606         intervals; specifying required information in the
  607         report; requiring the department to adopt rules
  608         relating to insurers’ annual reporting of certain
  609         data; creating s. 626.9896, F.S.; providing
  610         legislative intent; creating a grant program to fund
  611         the Insurance Fraud Dedicated Prosecutor Program
  612         within the department; requiring moneys that are
  613         appropriated for the program be used to fund specific
  614         attorney and paralegal positions; specifying
  615         procedures to be used by state attorneys’ offices when
  616         applying for biennial grants; specifying that grants
  617         are for 2 years but authorizing the division to renew
  618         the grants; specifying procedures to be used by the
  619         department in awarding grant funds; requiring the
  620         Division of Investigative and Forensic Services to
  621         provide an annual report to the Executive Office of
  622         the Governor, the Speaker of the House of
  623         Representatives, and the Senate President; specifying
  624         information to be contained in the report; authorizing
  625         the department to adopt rules to administer and
  626         implement the insurance fraud dedicated prosecutor
  627         program; amending s. 626.9911, F.S.; defining the
  628         terms “fraudulent viatical settlement act” and
  629         “stranger-originated life insurance practice” for
  630         purposes of provisions relating to the Viatical
  631         Settlement Act; amending ss. 626.9924 and 626.99245,
  632         F.S.; conforming cross-references; amending s.
  633         626.99275, F.S.; providing additional prohibited acts
  634         related to viatical settlement contracts; amending s.
  635         626.99287, F.S.; providing that a viatical settlement
  636         contract is void and unenforceable by either party if
  637         the viatical settlement policy is subject, within a
  638         specified timeframe, to a loan secured by an interest
  639         in the policy; revising conditions and requirements in
  640         which viatical settlement contracts entered into
  641         within specified timeframes are valid and enforceable;
  642         deleting provisions related to the transfer of
  643         insurance policies or certificates to viatical
  644         settlement providers; creating s. 626.99289, F.S.;
  645         providing that certain contracts, agreements,
  646         arrangements, or transactions relating to stranger
  647         originated life insurance practices are void and
  648         unenforceable; creating s. 626.99291, F.S.;
  649         authorizing a life insurer to contest policies
  650         obtained through such practices; creating s.
  651         626.99292, F.S.; requiring life insurers to provide a
  652         specified statement to individual life insurance
  653         policyholders; authorizing such statements to
  654         accompany or be included in notices or mailings
  655         provided to the policyholders; requiring such
  656         statements to include contact information; amending s.
  657         641.3915, F.S.; deleting obsolete provisions;
  658         providing effective dates.