Senate Bill 0900c1

CODING: Words stricken are deletions; words underlined are additions.



    Florida Senate - 1999                            CS for SB 900

    By the Committee on Banking and Insurance; and Senator Rossin





    311-2169-99

  1                      A bill to be entitled

  2         An act relating to insurance; amending s.

  3         284.33, F.S.; revising requirements for

  4         purchase of annuities by the Department of

  5         Insurance; amending s. 626.094, F.S.; excluding

  6         certain corporations from the definition of

  7         insurance agency under certain circumstances

  8         for purposes of sharing commissions; amending

  9         s. 626.99, F.S.; revising the buyer's guide

10         that must be used by insurers soliciting life

11         insurance; creating s. 627.478, F.S.;

12         authorizing the Department of Insurance to

13         adopt by rule the model regulation of the

14         National Association of Insurance Commissioners

15         concerning the valuation of life insurance

16         policies; providing an effective date.

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18  Be It Enacted by the Legislature of the State of Florida:

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20         Section 1.  Section 626.094, Florida Statutes, is

21  amended to read:

22         626.094  "Insurance agency" defined.--An "insurance

23  agency" is a business location at which an individual, firm,

24  partnership, corporation, association, or other entity, except

25  for an employee of the individual, firm, partnership,

26  corporation, association, or other entity, and other than an

27  insurer as defined by s. 624.03 or an adjuster as defined by

28  s. 626.101, engages in any activity or employs individuals to

29  engage in any activity which by law may be performed only by a

30  licensed insurance agent or solicitor. A foreign firm,

31  partnership, corporation, association, or other entity that is

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    Florida Senate - 1999                            CS for SB 900
    311-2169-99




  1  owned or controlled by a resident of this state or a business

  2  entity within this state, that uses or employs a nonresident

  3  agent licensed under s. 626.741, and that furnishes

  4  advertising or solicitation materials that are distributed in

  5  this state or uses unlicensed personnel to initiate customer

  6  contact with a nonresident agent shall not be deemed an

  7  insurance agency for purposes of s. 626.753.

  8         Section 2.  Subsection (1) of section 284.33, Florida

  9  Statutes, is amended to read:

10         284.33  Purchase of insurance, reinsurance, and

11  services.--

12         (1)  The Department of Insurance is authorized to

13  provide insurance, specific excess insurance, and aggregate

14  excess insurance through the Department of Management

15  Services, pursuant to the provisions of part I of chapter 287,

16  as necessary to provide insurance coverages authorized by this

17  part, consistent with market availability.  However, the

18  Department of Insurance may directly purchase annuities

19  through use of a structured settlement insurance consulting

20  firm selected by the department to assist in the settlement of

21  claims being handled by the Division of Risk Management. The

22  selection of the structured settlement insurance services

23  consultant shall be made by using competitive sealed

24  proposals. The consulting firm shall act an an agent of record

25  for the department in procuring the best annuity products

26  available to facilitate structured settlement of claims,

27  considering price, insurer financial strength, and the best

28  interests of the state risk management program. Purchase of

29  annuities by the department using a structured settlement

30  method shall be excepted from competitive sealed bidding or

31  proposal requirements. The Department of Insurance is further

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    Florida Senate - 1999                            CS for SB 900
    311-2169-99




  1  authorized to purchase such risk management services,

  2  including, but not limited to, risk and claims control; safety

  3  management; and legal, investigative, and adjustment services,

  4  as may be required and pay claims. The department may contract

  5  with a service organization for such services and advance

  6  money to such service organization for deposit in a special

  7  checking account for paying claims made against the state

  8  under the provisions of this part.  The special checking

  9  account shall be maintained in this state in a bank or savings

10  association organized under the laws of this state or of the

11  United States. The department may replenish such account as

12  often as necessary upon the presentation by the service

13  organization of documentation for payments of claims equal to

14  the amount of the requested reimbursement.

15         Section 3.  Subsection (6) of section 626.99, Florida

16  Statutes, is amended to read:

17         626.99  Life insurance solicitation.--

18         (6)  ADOPTION OF BUYER'S GUIDE; REQUIREMENTS.--Any

19  insurer soliciting life insurance in this state on or after

20  October 1, 1980, shall adopt and use a buyer's guide, and the

21  adoption and use by an insurer of the buyer's guide adopted

22  October 1, 1996, May 4, 1976, by the National Association of

23  Insurance Commissioners in the NAIC Life Insurance

24  Solicitation Model Regulation shall be in compliance with the

25  requirements of this section.

26         Section 4.  Section 627.478, Florida Statutes, is

27  created to read:

28         627.478  Valuation of life insurance policies.--The

29  department may adopt by rule the

30  valuation-of-life-insurance-policies model regulation as

31  approved by the National Association of Insurance

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    Florida Senate - 1999                            CS for SB 900
    311-2169-99




  1  Commissioners in March 1999, including tables of select

  2  mortality factors.

  3         Section 5.  This act shall take effect July 1, 1999.

  4

  5          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  6                         Senate Bill 900

  7

  8  Revises the amendment to s. 626.094, F.S., to exclude from the
    definition of "insurance agency," a foreign corporation or
  9  other entity which is owned or controlled by a Florida
    resident or Florida business entity, who uses or employs a
10  nonresident licensed insurance agent, and who furnishes
    insurance advertising or solicitation materials which are
11  distributed in Florida, or who uses unlicensed personnel to
    initiate customer contact with a nonresident insurance agent
12  for the purposes of sharing commissions.

13  Amends s. 284.33(1), F.S., to allow the Department of
    Insurance to directly purchase annuities by using a structured
14  settlement insurance consulting firm. The consulting firm will
    aid the Division of Risk Management in the settlement of
15  claims. The consulting firm will be chosen by the sealed
    competitive bidding process, but the actual purchase of
16  annuities by the consulting firm for the department will not
    be subject to the sealed competitive bidding process.
17
    Amends s. 626.99(6), F.S., to update the edition of the
18  National Association of Insurance Commissioners buyer's guide,
    which may be used by life insurers to comply with s. 626.99,
19  F.S., from the May 4, 1976 edition to the October 1, 1996
    edition.
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    Creates s.627.478, F.S., to allow the Department of Insurance
21  to adopt by rule the National Association of Insurance
    Commissioners' model regulation on the valuation of life
22  insurance policies.

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