HB 1437

1	A bill to be entitled
2	An act relating to viatical settlements; amending s.
3	517.021, F.S.; revising and providing definitions;
4	creating s. 517.072, F.S.; specifying nonapplication of
5	certain exemptions to viatical settlement investments;
6	specifying the offering of a viatical settlement
7	investment as not an exempt transaction under certain
8	provisions of law; amending s. 517.081, F.S.; authorizing
9	the Financial Services Commission to adopt additional
10	rules relating to securities registration; authorizing the
11	commission to adopt rules establishing requirements and
12	standards for disclosures and records relating to viatical
13	settlement investments; creating s. 517.1215, F.S.;
14	requiring the commission to adopt rules specifying
15	requirements for certain investment advisors; requiring
16	the commission to establish by rule rules of conduct and
17	prohibited business practices for investment advisers and
18	associated persons; providing requirements; creating s.
19	517.1217, F.S.; authorizing the commission to establish by
20	rule rules of conduct and prohibited business practices
21	for dealers and associated persons; providing
22	requirements; amending s. 624.501, F.S.; including agents
23	making an appointment under certain life insurance agent
24	fee provisions; amending ss. 626.015, 626.112, 626.207,
25	and 626.331, F.S., to conform; amending s. 626.611, F.S.;
26	providing an additional ground for compulsory refusal,
27	suspension, or revocation of certain licenses or
28	appointments for transactions relating to viatical
29	settlement contracts; amending s. 626.777, F.S., to
30	conform; amending s. 626.7845, F.S.; prohibiting certain
31	activities by a person relating to viatical settlement
32	contracts unless as a licensed life agent; amending s.
33	626.9911, F.S.; revising definitions; amending s.
34	626.9912, F.S.; providing an additional requirement for
35	viatical settlement provider license applications;
36	amending s. 626.9913, F.S.; specifying additional
37	requirements for annual statements by viatical settlement
38	provider licensees; providing an alternative bond
39	provision for certain viatical settlement providers for a
40	certain time period; prohibiting certain persons from
41	levying upon certain assets or securities under certain
42	circumstances; amending s. 626.9914, F.S.; including the
43	authority to deny a license among the adverse actions the
44	Office of Insurance Regulation may take against a viatical
45	settlement provider for certain actions; providing an
46	additional ground for the office to take adverse actions;
47	amending s. 626.9916, F.S.; revising licensure
48	requirements for viatical settlement brokers and life
49	agents; providing for self-appointment; providing for
50	transfers of appointments; providing for termination of
51	licenses; specifying a fiduciary duty of viatical
52	settlement brokers; prohibiting dividing or sharing
53	compensation received by a life agent for certain
54	activities under certain circumstances; creating s.
55	626.99175, F.S.; requiring registration to operate as a
56	life expectancy provider; providing registration for
57	requirements; requiring certain application information;
58	requiring registered life expectancy providers to
59	periodically file audits with the office; providing audit
60	requirements; authorizing certain subsidiaries of life
61	expectancy providers to operate as a provider under
62	certain circumstances; prohibiting certain providers,
63	brokers, and agents from owning or being an officer,
64	director, or employee of a life expectancy provider;
65	requiring providers to provide the office with advance
66	notice of certain changes; requiring providers to retain
67	copies of certain information and documents; providing an
68	exception; providing procedures for approval or denial of
69	applications; specifying grounds for denial of an
70	application; authorizing the office to assess
71	administrative fines under certain circumstances;
72	authorizing the office to place a provider on probation
73	for a certain period; specifying certain activities
74	violations; amending ss. 626.9919, 626.992, and 626.9921,
75	F.S., to conform; amending s. 626.9922, F.S.; specifying
76	office jurisdiction over certain viatical settlement
77	purchase agreements; authorizing the office to refer
78	certain cases to the United States Securities and Exchange
79	Commission for administrative action under certain
80	circumstances; providing application to life expectancy
81	providers; amending ss. 626.99245, 626.9925, 626.9926, and
82	626.9927, F.S., to conform; amending s. 626.99275, F.S.;
83	revising prohibited practices to apply to issuing life
84	expectancies and change a viator's residency for certain
85	purposes; providing a criminal penalty; amending s.
86	626.99278, F.S.; providing for application to registered
87	life expectancy providers; requiring an anti-fraud plan to
88	include a description of procedures used to perform life
89	expectancy accuracy reviews; amending ss. 626.9928 and
90	626.99285, F.S., to conform; amending s. 626.99295, F.S.;
91	revising application of a grace period for certain
92	viatical settlement purchase agreements; repealing s.
93	626.9917, F.S., relating to denial, suspension,
94	revocation, or nonrenewal of viatical settlement broker
95	licenses; repealing s. 626.9918, F.S., relating to effect
96	of suspension or revocation of viatical settlement broker
97	licenses; repealing s. 626.99235, F.S., relating to
98	disclosures to viatical settlement purchasers; repealing
99	s. 626.99236, F.S., relating to further disclosures to
100	viatical settlement purchasers; repealing s. 626.99277,
101	F.S., relating to false representations; providing an
102	effective date.
103
104	Be It Enacted by the Legislature of the State of Florida:
105
106	Section 1.  Subsections (19) and (21) of section 517.021,
107	Florida Statutes, are renumbered as subsections (20) and (22),
108	respectively, present subsection (20) is renumbered as
109	subsection (21) and amended, and subsections (19) and (23) are
110	added to said section, to read:
111	517.021  Definitions.--When used in this chapter, unless
112	the context otherwise indicates, the following terms have the
113	following respective meanings:
114	(19)  "Qualified institutional buyer" means any qualified
115	institutional buyer, as defined in United States Securities and
116	Exchange Commission Rule 144A, 17 C.F.R. 230.144A(a), under the
117	Securities Act of 1933, as amended, or any foreign buyer that
118	satisfies the minimum financial requirements set forth in such
119	rule.
120	(21)(20)  "Security" includes any of the following:
121	(a)  A note.
122	(b)  A stock.
123	(c)  A treasury stock.
124	(d)  A bond.
125	(e)  A debenture.
126	(f)  An evidence of indebtedness.
127	(g)  A certificate of deposit.
128	(h)  A certificate of deposit for a security.
129	(i)  A certificate of interest or participation.
130	(j)  A whiskey warehouse receipt or other commodity
131	warehouse receipt.
132	(k)  A certificate of interest in a profit-sharing
133	agreement or the right to participate therein.
134	(l)  A certificate of interest in an oil, gas, petroleum,
135	mineral, or mining title or lease or the right to participate
136	therein.
137	(m)  A collateral trust certificate.
138	(n)  A reorganization certificate.
139	(o)  A preorganization subscription.
140	(p)  Any transferable share.
141	(q)  An investment contract.
142	(r)  A beneficial interest in title to property, profits,
143	or earnings.
144	(s)  An interest in or under a profit-sharing or
145	participation agreement or scheme.
146	(t)  Any option contract which entitles the holder to
147	purchase or sell a given amount of the underlying security at a
148	fixed price within a specified period of time.
149	(u)  Any other instrument commonly known as a security,
150	including an interim or temporary bond, debenture, note, or
151	certificate.
152	(v)  Any receipt for a security, or for subscription to a
153	security, or any right to subscribe to or purchase any security.
154	(w)  A viatical settlement investment.
155	(23)  "Viatical settlement investment" means an agreement
156	for the purchase, sale, assignment, transfer, devise, or bequest
157	of all or any portion of a legal or equitable interest in a
158	viaticated policy as defined in chapter 626. The term does not
159	include:
160	(a)  The transfer or assignment of an interest in a
161	previously viaticated policy from a natural person who transfers
162	or assigns no more than one such interest in 1 calendar year.
163	(b)  The provision of stop-loss coverage to a viatical
164	settlement provider, financing entity, or related provider
165	trust, as those terms are defined in s. 626.9911, by an
166	authorized or eligible insurer.
167	(c)  The transfer or assignment of a viaticated policy from
168	a licensed viatical settlement provider to another licensed
169	viatical settlement provider, a related provider trust, a
170	financing entity, or a special purpose entity, as those terms
171	are defined in s. 626.9911, or to a contingency insurer provided
172	that such transfer or assignment is not the direct or indirect
173	promotion of any scheme or enterprise with the intent of
174	violating or evading any provision of this chapter.
175	(d)  The transfer or assignment of a viaticated policy to a
176	bank, trust company, savings institution, insurance company,
177	dealer, investment company as defined by the Investment Company
178	Act of 1940, pension or profit-sharing trust, or qualified
179	institutional buyer as defined by United States Securities and
180	Exchange Commission Rule 144A, 17 C.F.R. 230.144A(a), or to an
181	accredited investor as defined by Rule 501 of Regulation D of
182	the Securities Act Rules, provided such transfer or assignment
183	is not for the direct or indirect promotion of any scheme or
184	enterprise with the intent of violating or evading any provision
185	of this chapter.
186	(e)  The transfer or assignment of a viaticated policy by a
187	conservator of a viatical settlement provider appointed by a
188	court of competent jurisdiction who transfers or assigns
189	ownership of viaticated policies pursuant to that court's order.
190	Section 2.  Section 517.072, Florida Statutes, is created
191	to read:
192	517.072  Viatical settlement investments.--The exemptions
193	provided for by ss. 517.051(6), (8), and (10) do not apply to a
194	viatical settlement investment. The offering of a viatical
195	settlement investment is not an exempt transaction under s.
196	517.061(2), (3), (8), (11), and (18), regardless of whether the
197	offering otherwise complies with the conditions of that section,
198	unless such offering is to a qualified institutional buyer.
199	Section 3.  Subsection (7) of section 517.081, Florida
200	Statutes, is amended, and subsection (8) is added to said
201	section, to read:
202	517.081  Registration procedure.--
203	(7)  If upon examination of any application the office
204	shall find that the sale of the security referred to therein
205	would not be fraudulent and would not work or tend to work a
206	fraud upon the purchaser, that the terms of the sale of such
207	securities would be fair, just, and equitable, and that the
208	enterprise or business of the issuer is not based upon unsound
209	business principles, it shall record the registration of such
210	security in the register of securities; and thereupon such
211	security so registered may be sold by any registered dealer,
212	subject, however, to the further order of the office. In order
213	to determine if an offering is fair, just, and equitable, the
214	commission may by rule establish requirements and standards for
215	the filing, content, and circulation of any preliminary, final,
216	or amended prospectus and other sales literature and may by rule
217	establish merit qualification criteria relating to the issuance
218	of equity securities, debt securities, insurance company
219	securities, real estate investment trusts (REITs), and other
220	traditional and nontraditional investments, including, but not
221	limited to, oil and gas investments. The criteria may include
222	such elements as the promoter's equity investment ratio, the
223	financial condition of the issuer, the voting rights of
224	shareholders, the grant of options or warrants to underwriters
225	and others, loans and other affiliated transaction, the use or
226	refund of proceeds of the offering, and such other relevant
227	criteria as the office in its judgment may deem necessary to
228	such determination.
229	(8)  The commission may by rule establish requirements and
230	standards for:
231	(a)  Disclosures to purchasers of viatical settlement
232	investments.
233	(b)  Recordkeeping requirements for sellers of viatical
234	settlement investments.
235	Section 4.  Section 517.1215, Florida Statutes, is created
236	to read:
237	517.1215  Requirements, rules of conduct, and prohibited
238	business practices for investment advisors and their associated
239	persons.--
240	(1)  By rule, the commission shall specify requirements for
241	investment advisors deemed to have custody of client funds which
242	concern the following:
243	(a)  Notification of custody of, maintenance of, and
244	safeguards for client funds.
245	(b)  Communications with clients and independent
246	representatives.
247	(c)  Requirements for investment advisers who have custody
248	of pooled investments.
249	(d)  Exceptions to the custody requirements.
250
251	In adopting the rules, the commission shall consider the rules
252	and regulations of the federal regulatory authority and the
253	North American Securities Administrators Association.
254	(2)  The commission shall by rule establish rules of
255	conduct and prohibited business practices for investment
256	advisers and their associated persons. In adopting the rules,
257	the commission shall consider general industry standards as
258	expressed in the rules and regulations of the various federal
259	and self-regulatory agencies and regulatory associations,
260	including, but not limited to, the United States Securities and
261	Exchange Commission, the National Association of Securities
262	Dealers, and the North American Securities Administrators
263	Association.
264	Section 5.  Section 517.1217, Florida Statutes, is created
265	to read:
266	517.1217  Prohibited business practices and rules of
267	conduct for dealers and their associated persons.--The
268	commission by rule may establish rules of conduct and prohibited
269	business practices for dealers and their associated persons. In
270	adopting the rules, the commission shall consider general
271	industry standards as expressed in the rules and regulations of
272	the various federal and self-regulatory agencies and regulatory
273	associations, including, but not limited to, the United States
274	Securities and Exchange Commission, the National Association of
275	Securities Dealers, the stock exchanges, and the North American
276	Securities Administrators Association.
277	Section 6.  Paragraph (a) of subsection (7) of section
278	624.501, Florida Statutes, is amended to read:
279	624.501  Filing, license, appointment, and miscellaneous
280	fees.--The department, commission, or office, as appropriate,
281	shall collect in advance, and persons so served shall pay to it
282	in advance, fees, licenses, and miscellaneous charges as
283	follows:
284	(7)  Life insurance agents.
285	(a)  Agent's original appointment and biennial renewal or
286	continuation thereof, each insurer or agent making an
287	appointment:
288	Appointment fee.............................$42.00
289	State tax....................................12.00
290	County tax....................................6.00
291	Total.......................................$60.00
292	Section 7.  Subsection (10) of section 626.015, Florida
293	Statutes, is amended to read:
294	626.015  Definitions.--As used in this part:
295	(10)  "Life agent" means an individual representing an
296	insurer as to life insurance and annuity contracts, or acting as
297	a viatical settlement broker as defined in s. 626.9911,
298	including agents appointed to transact life insurance, fixed-
299	dollar annuity contracts, or variable contracts by the same
300	insurer.
301	Section 8.  Paragraph (b) of subsection (1) of section
302	626.112, Florida Statutes, is amended to read:
303	626.112  License and appointment required; agents, customer
304	representatives, adjusters, insurance agencies, service
305	representatives, managing general agents.--
306	(1)
307	(b)  Except as provided in subsection (6) or in applicable
308	department rules, and in addition to other conduct described in
309	this chapter with respect to particular types of agents, a
310	license as an insurance agent, service representative, customer
311	representative, or limited customer representative is required
312	in order to engage in the solicitation of insurance. For
313	purposes of this requirement, as applicable to any of the
314	license types described in this section, the solicitation of
315	insurance is the attempt to persuade any person to purchase an
316	insurance product by:
317	1.  Describing the benefits or terms of insurance coverage,
318	including premiums or rates of return;
319	2.  Distributing an invitation to contract to prospective
320	purchasers;
321	3.  Making general or specific recommendations as to
322	insurance products;
323	4.  Completing orders or applications for insurance
324	products; or
325	5.  Comparing insurance products, advising as to insurance
326	matters, or interpreting policies or coverages; or
327	6.  Offering or attempting to negotiate on behalf of
328	another person a viatical settlement contract as defined in s.
329	626.9911.
330
331	However, an employee leasing company licensed pursuant to
332	chapter 468 which is seeking to enter into a contract with an
333	employer that identifies products and services offered to
334	employees may deliver proposals for the purchase of employee
335	leasing services to prospective clients of the employee leasing
336	company setting forth the terms and conditions of doing
337	business; classify employees as permitted by s. 468.529; collect
338	information from prospective clients and other sources as
339	necessary to perform due diligence on the prospective client and
340	to prepare a proposal for services; provide and receive
341	enrollment forms, plans, and other documents; and discuss or
342	explain in general terms the conditions, limitations, options,
343	or exclusions of insurance benefit plans available to the client
344	or employees of the employee leasing company were the client to
345	contract with the employee leasing company. Any advertising
346	materials or other documents describing specific insurance
347	coverages must identify and be from a licensed insurer or its
348	licensed agent or a licensed and appointed agent employed by the
349	employee leasing company. The employee leasing company may not
350	advise or inform the prospective business client or individual
351	employees of specific coverage provisions, exclusions, or
352	limitations of particular plans. As to clients for which the
353	employee leasing company is providing services pursuant to s.
354	468.525(4), the employee leasing company may engage in
355	activities permitted by ss. 626.7315, 626.7845, and 626.8305,
356	subject to the restrictions specified in those sections. If a
357	prospective client requests more specific information concerning
358	the insurance provided by the employee leasing company, the
359	employee leasing company must refer the prospective business
360	client to the insurer or its licensed agent or to a licensed and
361	appointed agent employed by the employee leasing company.
362	Section 9.  Section 626.207, Florida Statutes, is amended
363	to read:
364	626.207  Department rulemaking authority; waiting periods
365	for applicants; penalties against licensees.--
366	(1)  The department shall adopt rules establishing specific
367	waiting periods for applicants to become eligible for licensure
368	following denial, suspension, or revocation pursuant to s.
369	626.611, s. 626.621, s. 626.8437, s. 626.844, s. 626.935, s.
370	626.9917, s. 634.181, s. 634.191, s. 634.320, s. 634.321, s.
371	634.422, s. 634.423, s. 642.041, or s. 642.043. The purpose of
372	the waiting periods is to provide sufficient time to demonstrate
373	reformation of character and rehabilitation. The waiting periods
374	shall vary based on the type of conduct and the length of time
375	since the conduct occurred and shall also be based on the
376	probability that the propensity to commit illegal conduct has
377	been overcome. The waiting periods may be adjusted based on
378	aggravating and mitigating factors established by rule and
379	consistent with this purpose.
380	(2)  The department shall adopt rules establishing specific
381	penalties against licensees for violations of s. 626.611, s.
382	626.621, s. 626.8437, s. 626.844, s. 626.935, s. 626.9917, s.
383	634.181, s. 634.191, s. 634.320, s. 634.321, s. 634.422, s.
384	634.423, s. 642.041, or s. 642.043. The purpose of the
385	revocation or suspension is to provide a sufficient penalty to
386	deter future violations of the Florida Insurance Code. The
387	imposition of a revocation or the length of suspension shall be
388	based on the type of conduct and the probability that the
389	propensity to commit further illegal conduct has been overcome
390	at the time of eligibility for relicensure. The revocation or
391	the length of suspension may be adjusted based on aggravating or
392	mitigating factors, established by rule and consistent with this
393	purpose.
394	Section 10.  Subsection (2) of section 626.331, Florida
395	Statutes, is amended to read:
396	626.331  Number of appointments permitted or required.--
397	(2)  An agent shall be required to have a separate
398	appointment as to each insurer by whom he or she is appointed as
399	an agent. An agent must appoint himself or herself before
400	performing the functions of a viatical settlement broker.
401	Section 11.  Subsection (17) is added to section 626.611,
402	Florida Statutes, to read:
403	626.611  Grounds for compulsory refusal, suspension, or
404	revocation of agent's, title agency's, adjuster's, customer
405	representative's, service representative's, or managing general
406	agent's license or appointment.--The department shall deny an
407	application for, suspend, revoke, or refuse to renew or continue
408	the license or appointment of any applicant, agent, title
409	agency, adjuster, customer representative, service
410	representative, or managing general agent, and it shall suspend
411	or revoke the eligibility to hold a license or appointment of
412	any such person, if it finds that as to the applicant, licensee,
413	or appointee any one or more of the following applicable grounds
414	exist:
415	(17)  In transactions related to viatical settlement
416	contracts as defined in s. 626.9911:
417	(a)  Commission of a fraudulent or dishonest act.
418	(b)  No longer meeting the requirements for initial
419	licensure.
420	(c)  Having received a fee, commission, or other valuable
421	consideration for his or her services with respect to viatical
422	settlements that involved unlicensed viatical settlement
423	providers or persons who offered or attempted to negotiate on
424	behalf of another person a viatical settlement contract as
425	defined in s. 626.9911 and who were not licensed life agents.
426	(d)  Dealing in bad faith with viators.
427	Section 12.  Section 626.777, Florida Statutes, is amended
428	to read:
429	626.777  Scope of this part.--This part applies only to
430	agents of life insurers, and to agents who are appointed by the
431	same insurer as to both life insurance and health insurance, and
432	agents who perform the functions of a viatical settlement broker
433	as defined in s. 626.9911.
434	Section 13.  Subsection (2) of section 626.7845, Florida
435	Statutes, is amended to read:
436	626.7845  Prohibition against unlicensed transaction of
437	life insurance.--
438	(2)  Except as provided in s. 626.112(6), with respect to
439	any line of authority specified in s. 626.015(10), no individual
440	shall, unless licensed as a life agent:
441	(a)  Solicit insurance or annuities or procure
442	applications; or
443	(b)  In this state, engage or hold himself or herself out
444	as engaging in the business of analyzing or abstracting
445	insurance policies or of counseling or advising or giving
446	opinions to persons relative to insurance or insurance contracts
447	other than:
448	1.  As a consulting actuary advising an insurer; or
449	2.  As to the counseling and advising of labor unions,
450	associations, trustees, employers, or other business entities,
451	the subsidiaries and affiliates of each, relative to their
452	interests and those of their members or employees under
453	insurance benefit plans; or
454	(c)  In this state, from this state, or with a resident of
455	this state, offer or attempt to negotiate on behalf of another
456	person a viatical settlement contract as defined in s. 626.9911.
457	Section 14.  Section 626.9911, Florida Statutes, is amended
458	to read:
459	626.9911  Definitions.--As used in this act, the term:
460	(1)(14)  "Financing entity" means an underwriter, placement
461	agent, lender, purchaser of securities, or purchaser of a policy
462	or certificate from a viatical settlement provider, credit
463	enhancer, or any entity that has direct ownership in a policy or
464	certificate that is the subject of a viatical settlement
465	contract, but whose principal activity related to the
466	transaction is providing funds or credit enhancement to effect
467	the viatical settlement or the purchase of one or more
468	viaticated viatical policies and who has an agreement in writing
469	with one or more licensed viatical settlement providers to
470	finance the acquisition of viatical settlement contracts. The
471	term does not include a nonaccredited investor, a viatical
472	settlement purchaser, or other natural person. A financing
473	entity may not enter into a viatical settlement contract.
474	(2)(1)  "Independent third-party trustee or escrow agent"
475	means an attorney, certified public accountant, financial
476	institution, or other person providing escrow services under the
477	authority of a regulatory body. The term does not include any
478	person associated, affiliated, or under common control with a
479	viatical settlement provider or viatical settlement broker.
480	(3)  "Life expectancy" means an opinion or evaluation as to
481	how long a particular person is to live, or relating to such
482	person's expected demise.
483	(4)  "Life expectancy provider" means a person who
484	determines, or holds himself or herself out as determining, life
485	expectancies or mortality ratings used to determine life
486	expectancies:
487	(a)  On behalf of a viatical settlement provider, viatical
488	settlement broker, life agent, or a person engaged in the
489	business of viatical settlements;
490	(b)  In connection with a viatical settlement investment,
491	pursuant to s. 517.021(22); or
492	(c)  On residents of this state in connection with a
493	viatical settlement contract or viatical settlement investment.
494	(5)(2)  "Person" has the meaning specified in s. 1.01.
495	(6)(12)  "Related form" means any form, created by or on
496	behalf of a licensee, which a viator or viatical settlement
497	purchaser is required to sign or initial. The forms include, but
498	are not limited to, a power of attorney, a release of medical
499	information form, a suitability questionnaire, a disclosure
500	document, or any addendum, schedule, or amendment to a viatical
501	settlement contract or viatical settlement purchase agreement
502	considered necessary by a provider to effectuate a viatical
503	settlement transaction.
504	(7)  "Related provider trust" means a titling trust or
505	other trust established by a licensed viatical settlement
506	provider or financing entity for the sole purpose of holding the
507	ownership or beneficial interest in purchased policies in
508	connection with a financing transaction. The trust must have a
509	written agreement with a licensed viatical settlement provider
510	or financing entity under which the licensed viatical settlement
511	provider or financing entity is responsible for insuring
512	compliance with all statutory and regulatory requirements and
513	under which the trust agrees to make all records and files
514	relating to viatical settlement transactions available to the
515	office as if those records and files were maintained directly by
516	the licensed viatical settlement provider. This term does not
517	include an independent third-party trustee or escrow agent or a
518	trust that does not enter into agreements with a viator. A
519	related provider trust shall be subject to all provisions of
520	this act that apply to the viatical settlement provider who
521	established the related provider trust, except s. 626.9912,
522	which shall not be applicable. A viatical settlement provider
523	may establish no more than one related provider trust, and the
524	sole trustee of such related provider trust shall be the
525	viatical settlement provider licensed under s. 626.9912. The
526	name of the licensed viatical settlement provider shall be
527	included within the name of the related provider trust.
528	(8)(13)  "Special purpose entity" means an entity
529	established by a licensed viatical settlement provider or by a
530	financing entity, which may be a corporation, partnership,
531	trust, limited liability company, or other similar entity formed
532	solely to provide, either directly or indirectly, access to
533	institutional capital markets to a viatical settlement provider
534	or financing entity. A special purpose entity may not obtain
535	capital from any natural person or entity with less than $50
536	million in assets and shall not enter into a viatical settlement
537	contract or a viatical settlement purchase agreement.
538	(9)(3)  "Viatical settlement broker" means a person who, on
539	behalf of a viator and for a fee, commission, or other valuable
540	consideration, offers or attempts to negotiate viatical
541	settlement contracts between a viator resident in this state and
542	one or more viatical settlement providers. Notwithstanding the
543	manner in which the viatical settlement broker is compensated, a
544	viatical settlement broker is deemed to represent only the
545	viator and owes a fiduciary duty to the viator to act according
546	to the viator's instructions and in the best interest of the
547	viator. The term does not include an attorney, licensed
548	Certified Public Accountant, or investment adviser lawfully
549	registered under chapter 517, who is retained to represent the
550	viator and whose compensation is paid directly by or at the
551	direction and on behalf of the viator.
552	(10)(4)  "Viatical settlement contract" means a written
553	agreement entered into between a viatical settlement provider,
554	or its related provider trust, and a viator. The viatical
555	settlement contract includes an agreement to transfer ownership
556	or change the beneficiary designation of a life insurance policy
557	at a later date, regardless of the date that compensation is
558	paid to the viator. The agreement must establish the terms under
559	which the viatical settlement provider will pay compensation or
560	anything of value, which compensation or value is less than the
561	expected death benefit of the insurance policy or certificate,
562	in return for the viator's assignment, transfer, sale, devise,
563	or bequest of the death benefit or ownership of all or a portion
564	of the insurance policy or certificate of insurance to the
565	viatical settlement provider. A viatical settlement contract
566	also includes a contract for a loan or other financial
567	transaction secured primarily by an individual or group life
568	insurance policy, other than a loan by a life insurance company
569	pursuant to the terms of the life insurance contract, or a loan
570	secured by the cash value of a policy.
571	(11)  "Viatical settlement investment" has the same meaning
572	as specified in s. 517.021.
573	(12)(5)  "Viatical settlement provider" means a person who,
574	in this state, from this state, or with a resident of this
575	state, effectuates a viatical settlement contract. The term does
576	not include:
577	(a)  Any bank, savings bank, savings and loan association,
578	credit union, or other licensed lending institution that takes
579	an assignment of a life insurance policy as collateral for a
580	loan.
581	(b)  A life and health insurer that has lawfully issued a
582	life insurance policy that provides accelerated benefits to
583	terminally ill policyholders or certificateholders.
584	(c)  Any natural person who enters into no more than one
585	viatical settlement contract with a viator in 1 calendar year,
586	unless such natural person has previously been licensed under
587	this act or is currently licensed under this act.
588	(d)  A trust that meets the definition of a "related
589	provider trust."
590	(e)  A viator in this state.
591	(f)  A viatical settlement purchaser.
592	(f)(g)  A financing entity.
593	(13)(11)  "Viaticated policy" means a life insurance
594	policy, or a certificate under a group policy, which is the
595	subject of a viatical settlement contract.
596	(14)(6)  "Viator" means the owner of a life insurance
597	policy or a certificateholder under a group policy, which policy
598	is not a previously viaticated policy, who enters or seeks to
599	enter into a viatical settlement contract. This term does not
600	include a viatical settlement purchaser or a viatical settlement
601	provider or any person acquiring a policy or interest in a
602	policy from a viatical settlement provider, nor does it include
603	an independent third-party trustee or escrow agent.
604	(8)  "Viatical settlement purchase agreement" means a
605	contract or agreement, entered into by a viatical settlement
606	purchaser, to which the viator is not a party, to purchase a
607	life insurance policy or an interest in a life insurance policy,
608	which is entered into for the purpose of deriving an economic
609	benefit. The term also includes purchases made by viatical
610	settlement purchasers from any person other than the provider
611	who effectuated the viatical settlement contract.
612	(9)  "Viatical settlement purchaser" means a person who
613	gives a sum of money as consideration for a life insurance
614	policy or an equitable or legal interest in the death benefits
615	of a life insurance policy that has been or will be the subject
616	of a viatical settlement contract, for the purpose of deriving
617	an economic benefit, including purchases made from any person
618	other than the provider who effectuated the viatical settlement
619	contract or an entity affiliated with the provider. The term
620	does not include a licensee under this part, an accredited
621	investor as defined in Rule 501, Regulation D of the Securities
622	Act Rules, or a qualified institutional buyer as defined by Rule
623	144(a) of the Federal Securities Act, a special purpose entity,
624	a financing entity, or a contingency insurer. The above
625	references to Rule 501, Regulation D and Rule 144(a) of the
626	Federal Securities Act are used strictly for defining purposes
627	and shall not be interpreted in any other manner. Any person who
628	claims to be an accredited investor shall sign an affidavit
629	stating that he or she is an accredited investor, the basis of
630	that claim, and that he or she understands that as an accredited
631	investor he or she will not be entitled to certain protections
632	of the Viatical Settlement Act. This affidavit must be kept with
633	other documents required to be maintained by this act.
634	(10)  "Viatical settlement sales agent" means a person
635	other than a licensed viatical settlement provider who arranges
636	the purchase through a viatical settlement purchase agreement of
637	a life insurance policy or an interest in a life insurance
638	policy.
639	Section 15.  Paragraph (f) of subsection (3) and subsection
640	(4) of section 626.9912, Florida Statutes, are amended,
641	paragraph (g) of subsection (3) of said section is redesignated
642	as paragraph (h), and new paragraph (g) is added to said
643	subsection, to read:
644	626.9912  Viatical settlement provider license required;
645	application for license.--
646	(3)  In the application, the applicant must provide all of
647	the following:
648	(f)  All applications, viatical settlement contract forms,
649	viatical settlement purchase agreement forms, escrow forms, and
650	other related forms proposed to be used by the applicant.
651	(g)  A general description of the method the viatical
652	settlement provider will use in determining life expectancies,
653	including a description of the applicant's intended receipt of
654	life expectancies, the applicant's intended use of life
655	expectancy providers, and the written plan or plans of policies
656	and procedures used to determine life expectancies.
657	(4)  The office may not issue a license to an entity other
658	than a natural person if it is not satisfied that all officers,
659	directors, employees, stockholders, partners, and any other
660	persons who exercise or have the ability to exercise effective
661	control of the entity or who have the ability to influence the
662	transaction of business by the entity meet the standards of this
663	act and have not violated any provision of this act or rules of
664	the commission related to the business of viatical settlement
665	contracts or viatical settlement purchase agreements.
666	Section 16.  Section 626.9913, Florida Statutes, is amended
667	to read:
668	626.9913  Viatical settlement provider license continuance;
669	annual report; fees; deposit.--
670	(1)  A viatical settlement provider license continues in
671	force until suspended or revoked.
672	(2)  Annually, on or before March 1, the viatical
673	settlement provider licensee shall file a statement containing
674	information the commission requires and shall pay to the office
675	a license fee in the amount of $500. The annual statement shall
676	include audited financial statements prepared in accordance with
677	generally accepted accounting principles by an independent
678	certified public accountant as of the last day of the preceding
679	calendar year. However, if the audited financial statement has
680	not been completed, the licensee shall include in its annual
681	statement an unaudited financial statement and an affidavit from
682	an officer of the licensee stating that the audit has not been
683	completed. In this event, the licensee shall submit the audited
684	statement on or before June 1. The annual statement shall also
685	provide the office with a report of all life expectancy
686	providers who have provided life expectancies, directly or
687	indirectly, to the viatical settlement provider for use in
688	connection with a viatical settlement contract or a viatical
689	settlement investment. A viatical settlement provider shall
690	include in all statements filed with the office all information
691	requested by the office regarding a related provider trust
692	established by the viatical settlement provider. The office may
693	require more frequent reporting. Failure to timely file the
694	annual statement or to timely pay the license fee is grounds for
695	immediate suspension of the license.
696	(3)  To ensure the faithful performance of its obligations
697	to its viators in the event of insolvency or the loss of its
698	license, a viatical settlement provider licensee must deposit
699	and maintain deposited in trust with the department securities
700	eligible for deposit under s. 625.52, having at all times a
701	value of not less than $100,000, provided a viatical settlement
702	provider licensed prior to June 1, 2004, that has deposited and
703	maintains continuously deposited in trust with the department
704	securities in the amount of $25,000 and which posted and
705	maintains continuously posted a security bond acceptable to the
706	department in the amount of $75,000, has until June 1, 2005, to
707	comply with the requirements of this subsection. As an
708	alternative to meeting the $100,000 deposit requirement, the
709	provider may deposit and maintain deposited in trust with the
710	department such securities in the amount of $25,000 and post
711	with the office a surety bond acceptable to the office in the
712	amount of $75,000.
713	(4)  There shall be no additional annual license fee or
714	deposit requirements under this act for a related provider trust
715	established by a viatical settlement provider.
716	(5)  A judgment creditor or other claimant of a viatical
717	settlement provider may not levy upon any of the assets or
718	securities held in this state pursuant to this section.
719	Section 17.  Subsection (1) of section 626.9914, Florida
720	Statutes, is amended to read:
721	626.9914  Suspension, revocation, or nonrenewal of viatical
722	settlement provider license; grounds; administrative fine.--
723	(1)  The office shall suspend, revoke, deny, or refuse to
724	renew the license of any viatical settlement provider if the
725	office finds that the licensee:
726	(a)  Has made a misrepresentation in the application for
727	the license;
728	(b)  Has engaged in fraudulent or dishonest practices, or
729	otherwise has been shown to be untrustworthy or incompetent to
730	act as a viatical settlement provider;
731	(c)  Demonstrates a pattern of unreasonable payments to
732	viators;
733	(d)  Has been found guilty of, or has pleaded guilty or
734	nolo contendere to, any felony, or a misdemeanor involving fraud
735	or moral turpitude, regardless of whether a judgment of
736	conviction has been entered by the court;
737	(e)  Has issued viatical settlement contracts that have not
738	been approved pursuant to this act;
739	(f)  Has failed to honor contractual obligations related to
740	the business of viatical settlement contracts;
741	(g)  Deals in bad faith with viators;
742	(h)  Has violated any provision of the insurance code or of
743	this act;
744	(i)  Employs any person who materially influences the
745	licensee's conduct and who fails to meet the requirements of
746	this act; or
747	(j)  No longer meets the requirements for initial
748	licensure; or
749	(k)  Obtains or uses life expectancies from life expectancy
750	providers who are not registered with the office pursuant to
751	this act.
752	Section 18.  Section 626.9916, Florida Statutes, is amended
753	to read:
754	626.9916  Viatical settlement broker and life agent license
755	required; application for license.--
756	(1)  After July 1, 2006 1996, a person, other than a life
757	agent licensed under this chapter, may not in this state, from
758	this state, or with a resident of this state perform the
759	functions of a viatical settlement broker as defined in this act
760	without first having obtained a license from the department.
761	(2)  Before performing the functions of a viatical
762	settlement broker, a life agent shall appoint himself or herself
763	with the department and pay applicable fees pursuant to s.
764	624.501(7)(a). Application for a viatical settlement broker
765	license must be made to the department by the applicant on a
766	form prescribed by the department, under oath, and signed by the
767	applicant. The application must be accompanied by a $50 filing
768	fee. If the applicant is a corporation, the application must be
769	under oath and signed by the president and the secretary of the
770	corporation.
771	(3)  Each natural person who on July 1, 2005, held a
772	viatical settlement broker's license and self-appointment may,
773	upon obtaining a life agent license on or before July 1, 2006,
774	transfer an existing broker self-appointment to such license. In
775	the application, the applicant must provide all of the
776	following:
777	(a)  The applicant's full name, age, residence address, and
778	business address, and all occupations engaged in by the
779	applicant during the 5 years preceding the date of the
780	application; if the applicant is not a natural person, the
781	applicant must provide the information required by this
782	paragraph with respect to all officers, directors, or partners.
783	(b)  A copy of the applicant's basic organizational
784	documents, if any, including the articles of incorporation,
785	articles of association, partnership agreement, trust agreement,
786	or other similar documents, together with all amendments to such
787	documents.
788	(c)  If the applicant is not a natural person, a list
789	showing the name, business and residence addresses, and official
790	position of each individual who is responsible for conduct of
791	the applicant's affairs, including, but not limited to, any
792	member of the applicant's board of directors, board of trustees,
793	executive committee, or other governing board or committee and
794	any other person or entity owning or having the right to acquire
795	10 percent or more of the voting securities of the applicant.
796	(d)  With respect to an individual applicant and with
797	respect to each individual identified under paragraph (c):
798	1.  A sworn biographical statement on forms supplied by the
799	department.
800	2.  A set of fingerprints on forms prescribed by the
801	department, certified by a law enforcement officer, and
802	accompanied by the fingerprinting fee specified in s. 624.501.
803	3.  Authority, if required by the department, for release
804	of information relating to the investigation of the individual's
805	background.
806	(e)  Such other information as the department deems
807	necessary to determine that the individual applicant and the
808	individuals identified under paragraph (c) are competent and
809	trustworthy and can lawfully and successfully act as a viatical
810	settlement provider.
811	(4)  All viatical settlement broker licenses shall
812	terminate on July 1, 2006, and shall not be subject to
813	continuation or renewal. Any natural person who is employed by
814	or otherwise represents a viatical settlement broker licensee,
815	which broker licensee is not a natural person, must also be
816	licensed as a viatical settlement broker if such employee or
817	other representative performs the functions of a viatical
818	settlement broker as defined in this act.
819	(5)  Notwithstanding the manner in which the viatical
820	settlement broker is compensated, he or she is deemed to
821	represent only the viator and owes a fiduciary duty to the
822	viator to act according to the viator's instructions and in the
823	best interest of the viator. The department may not issue a
824	license to an applicant if it is not satisfied that the
825	applicant, if a natural person, or all officers, directors,
826	employees, stockholders, and partners who exercise or have the
827	ability to exercise effective control of the applicant or who
828	have the ability to influence the transaction of business by the
829	applicant, if the applicant is not a natural person, meet the
830	standards of this act and have not violated any provision of
831	this act or rules of the department related to the business of
832	viatical settlement contracts.
833	(6)  The compensation received by a life agent for
834	activities performed as a viatical settlement broker may not be
835	divided or shared with another person unless such other person
836	is a life agent licensed under this chapter and appointed as
837	provided in this part. The department may specify the form of
838	the license and may require photographing of the applicant as
839	part of the application process.
840	(7)  Upon the filing of a sworn application and the payment
841	of the license fee and all other applicable fees under this act,
842	the department shall investigate each applicant and may issue
843	the applicant a license if the department finds that the
844	applicant:
845	(a)  Is competent and trustworthy and intends to act in
846	good faith in the business authorized by the license applied
847	for.
848	(b)  Has a good business reputation and has had experience,
849	training, or education that qualifies the applicant to conduct
850	the business authorized by the license applied for.
851	(c)  Except with respect to applicants for nonresident
852	licenses, is a bona fide resident of this state and actually
853	resides in this state at least 180 days a year. If an applicant
854	holds a similar license or an insurance agent's or broker's
855	license in another state at the time of applying for a license
856	under this section, the applicant may be found to meet the
857	residency requirement of this paragraph only after he or she
858	furnishes a letter of clearance satisfactory to the department
859	or other proof that the applicant's resident licenses have been
860	canceled or changed to nonresident status and that the applicant
861	is in good standing with the licensing authority.
862	(d)  Is a corporation, a corporation incorporated under the
863	laws of this state, or a foreign corporation authorized to
864	transact business in this state.
865	(e)  Has designated the Chief Financial Officer as its
866	agent for service of process.
867	(f)  If a natural person, is at least 18 years of age and a
868	United States citizen or legal alien who possesses work
869	authorization from the United States Bureau of Citizenship and
870	Immigration Services.
871	(8)  An applicant for a nonresident viatical settlement
872	broker license must, in addition to designating the Chief
873	Financial Officer as agent for service of process as required by
874	this section, also furnish the department with the name and
875	address of a resident of this state upon whom notices or orders
876	of the department or process affecting the applicant or licensee
877	may be served. After issuance of the license, the licensee must
878	also notify the department of change of the person to receive
879	such notices, orders, or process; such change is not effective
880	until acknowledged by the department.
881	(9)  The department may, by rule, specify experience,
882	educational, or other training standards required for licensure
883	under this section.
884	(10)  Except as otherwise provided in this section,
885	viatical settlement brokers shall be licensed, appointed,
886	renewed, continued, reinstated, and terminated in the manner
887	specified in this chapter for insurance representatives
888	generally; however, viatical settlement brokers are not subject
889	to continuing education requirements.
890	Section 19.  Section 626.99175, Florida Statutes, is
891	created to read:
892	626.99175  Life expectancy providers; registration
893	required; denial, suspension, revocation.--
894	(1)  After July 1, 2006, a person may not perform the
895	functions of a life expectancy provider without first having
896	registered as a life expectancy provider, except as provided in
897	subsection (6).
898	(2)  Application for registration as a life expectancy
899	provider must be made to the office by the applicant on a form
900	prescribed by the office, under oath and signed by the
901	applicant. The application must be accompanied by a fee of $500.
902	(3)  A completed application shall be evidenced on a form
903	and in a manner prescribed by the office and shall require the
904	registered life expectancy provider to update such information
905	and renew such registration as required by the office.
906	(4)  In the application, the applicant must provide all of
907	the following:
908	(a)  The full name, age, residence address, and business
909	address and all occupations engaged in by the applicant during
910	the 5 years preceding the date of the application.
911	(b)  A copy of the applicant's basic organizational
912	documents, if any, including the articles of incorporation,
913	articles of association, partnership agreement, trust agreement,
914	or other similar documents, together with all amendments to such
915	documents.
916	(c)  Copies of all bylaws, rules, regulations, or similar
917	documents regulating the conduct of the applicant's internal
918	affairs.
919	(d)  A list showing the name, business and residence
920	addresses, and official position of each individual who is
921	responsible for conduct of the applicant's affairs, including,
922	but not limited to, any member of the board of directors, board
923	of trustees, executive committee, or other governing board or
924	committee and any other person or entity owning or having the
925	right to acquire 10 percent or more of the voting securities of
926	the applicant, and any person performing life expectancies by
927	the applicant.
928	(e)  A sworn biographical statement on forms supplied by
929	the office with respect to each individual identified under
930	paragraph (d), including whether such individual has been
931	associated with any other life expectancy provider or has
932	performed any services for a person in the business of viatical
933	settlements.
934	(f)  A sworn statement of any criminal and civil actions
935	pending or final against the registrant or any individual
936	identified under paragraph (d).
937	(g)  A general description of the policies and procedures
938	covering all life expectancy determinations criteria and
939	protocols, including only the following:
940	1.  The plan or plans of policies and procedures used to
941	determine life expectancies.
942	2.  A description of the training, including continuing
943	training, of the individuals who determine life expectancies.
944	3.  A description of how the life expectancy provider
945	updates its manuals, underwriting guides, mortality tables and
946	other reference works and ensures that the provider bases its
947	determination of life expectancies on current data.
948	(h)  A plan for assuring confidentiality of personal,
949	medical, and financial information in accordance with federal
950	and state laws.
951	(i)  An anti-fraud plan as required pursuant to s.
952	626.99278.
953	(j)  A list of any agreements, contracts, or any other
954	arrangement to provide life expectancies to a viatical
955	settlement provider, viatical settlement broker, or any other
956	person in the business of viatical settlements in connection
957	with any viatical settlement contract or viatical settlement
958	investment.
959	(5)  As part of the application, and on or before March 1
960	every 3 years thereafter, a registered life expectancy provider
961	shall file with the office an audit of all life expectancies by
962	the life expectancy provider for the 5 calendar years
963	immediately preceding such audit, which audit shall be conducted
964	and certified by a nationally recognized actuarial firm and
965	shall only include the following:
966	(a)  A mortality table.
967	(b)  The number, percentage, and an actual-to-expected
968	ratio of life expectancies in the following categories: life
969	expectancies of less than 24 months, life expectancies of 25
970	months to 48 months, life expectancies of 49 months to 72
971	months, life expectancies of 73 months to 108 months, life
972	expectancies of 109 months to 144 months, life expectancies of
973	145 months to 180 months, and life expectancies of more than 180
974	months.
975	(6)  The life expectancy provider who is a subsidiary or
976	affiliate of an insurance company licensed in this state shall
977	be deemed to meet the registration requirements of this section
978	and may provide life expectancies or operate as a life
979	expectancy provider pursuant to this act.
980	(7)  No viatical settlement broker, viatical settlement
981	provider, or insurance agent in the business of viatical
982	settlements in this state shall directly or indirectly own or be
983	an officer, director, or employee of a life expectancy provider.
984	(8)  Each registered life expectancy provider shall provide
985	the office, as applicable, at least 30 days' advance notice of
986	any change in the registrants name, residence address, principal
987	business address, or mailing address.
988	(9)  A person required to be registered by this section
989	shall for 5 years retain copies of all life expectancies and
990	supporting documents and medical records unless those personal
991	medical records are subject to different retention or
992	destruction requirements of a federal or state personal health
993	information law.
994	(10)  An application for life expectancy provider
995	registration shall be approved or denied by the commissioner
996	within 60 calendar days following receipt of a completed
997	application by the commissioner. The office shall notify the
998	applicant that the application is complete. A completed
999	application that is not approved or denied in 60 calendar days
1000	following its receipt shall be deemed approved.
1001	(11)  The office may, in its discretion, deny the
1002	application for a life expectancy provider registration or
1003	suspend, revoke, or refuse to renew or continue the registration
1004	of a life expectancy provider if the office finds:
1005	(a)  Any cause for which registration could have been
1006	refused had it then existed and been known to the office;
1007	(b)  A violation of any provision of this code or of any
1008	other law applicable to the applicant or registrant;
1009	(c)  A violation of any lawful order or rule of the
1010	department, commission, or office; or
1011	(d)  The applicant or registrant:
1012	1.  Has been found guilty of or pled guilty or nolo
1013	contendere to a felony or a crime punishable by imprisonment of
1014	1 year or more under the law of the United States of America or
1015	of any state thereof or under the law of any other country;
1016	2.  Knowingly and willfully aided, assisted, procured,
1017	advised, or abetted any person in the violation of or to violate
1018	a provision of the insurance code or any order or rule of the
1019	department, commission, or office;
1020	3.  Knowingly and with intent to defraud, provided a life
1021	expectancy that does not conform to a applicant's or
1022	registrant's general practice;
1023	4.  Does not have a good business reputation or does not
1024	have experience, training, or education that qualifies the
1025	applicant or registrant to conduct the business of a life
1026	expectancy provider; or
1027	5.  Demonstrated lack of fitness or trustworthiness to
1028	engage in the business of issuing life expectancies.
1029	(12)  The office may, in lieu of or in addition to any
1030	suspension or revocation, assess an administrative fine not to
1031	exceed $2,500 for each nonwillful violation or $10,000 for each
1032	willful violation by a registered life expectancy provider. The
1033	office may also place a registered life expectancy provider on
1034	probation for a period not to exceed 2 years.
1035	(13)  It is a violation of this section for a person to
1036	represent, orally or in writing, that the fact that a life
1037	expectancy provider is registered pursuant to this act in any
1038	way is a recommendation or approval of the entity or that it
1039	means the qualifications or abilities have in any way been
1040	approved of.
1041	Section 20.  Section 626.9919, Florida Statutes, is amended
1042	to read:
1043	626.9919  Notice of change of licensee or registrant
1044	address or name.--Each viatical settlement provider licensee and
1045	registered life expectance provider, viatical settlement broker
1046	licensee, and viatical settlement sales agent licensee must
1047	provide the office or department, as applicable, at least 30
1048	days' advance notice of any change in the licensee's or
1049	registrant's name, residence address, principal business
1050	address, or mailing address.
1051	Section 21.  Section 626.992, Florida Statutes, is amended
1052	to read:
1053	626.992  Use of licensed viatical settlement providers,
1054	viatical settlement licensed brokers, and registered life
1055	expectancy providers, and sales agents required.--
1056	(1)  A licensed viatical settlement provider may not use
1057	any person to perform the functions of a viatical settlement
1058	broker as defined in this act unless such person holds a
1059	current, valid life agent license and has appointed himself or
1060	herself in conformance with this chapter as a viatical
1061	settlement broker. Salaried individuals employed by viatical
1062	settlement providers shall engage in viatical settlement broker
1063	activities only when accompanied by a viatical settlement broker
1064	who holds a current valid license issued under this act. A
1065	viatical settlement provider may not use any person to perform
1066	the functions of a viatical settlement sales agent unless the
1067	person holds a current, valid license as provided in subsection
1068	(4).
1069	(2)  A licensed viatical settlement broker may not use any
1070	person to perform the functions of a viatical settlement
1071	provider as defined in this act unless such person holds a
1072	current, valid license as a viatical settlement provider.
1073	(3)  After July 1, 2006, a person viatical settlement sales
1074	agent may not operate as life expectancy provider use any person
1075	to perform the functions of a viatical settlement broker unless
1076	such person is registered as a life expectancy provider pursuant
1077	to this chapter holds a current, valid license as a viatical
1078	settlement broker.
1079	(4)  After July 1, 2006, a person may not perform the
1080	functions of a viatical settlement provider, viatical settlement
1081	broker, or any other person in the business of viatical
1082	settlements may not obtain life expectancies from a person who
1083	is not registered as a life expectancy provider sales agent
1084	unless licensed as a life agent as defined in s. 626.015 and as
1085	provided in this chapter.
1086	Section 22.  Subsections (1) and (2) of section 626.9921,
1087	Florida Statutes, are amended to read:
1088	626.9921  Filing of forms; required procedures; approval.--
1089	(1)  A viatical settlement contract form, viatical
1090	settlement purchase agreement form, escrow form, or related form
1091	may be used in this state only after the form has been filed
1092	with the office and only after the form has been approved by the
1093	office.
1094	(2)  The viatical settlement contract form, viatical
1095	settlement purchase agreement form, escrow form, or related form
1096	must be filed with the office at least 60 days before its use.
1097	The form is considered approved on the 60th day after its date
1098	of filing unless it has been previously disapproved by the
1099	office. The office must disapprove a viatical settlement
1100	contract form, viatical settlement purchase agreement form,
1101	escrow form, or related form that is unreasonable, contrary to
1102	the public interest, discriminatory, or misleading or unfair to
1103	the viator or the purchaser.
1104	Section 23.  Subsection (2) of section 626.9922, Florida
1105	Statutes, is amended, and subsections (5), (6), and (7) are
1106	added to said section, to read:
1107	626.9922  Examination.--
1108	(2)  All accounts, books and records, documents, files,
1109	contracts, and other information relating to all transactions of
1110	viatical settlement contracts, life expectancies, or viatical
1111	settlement purchase agreements made before July 1, 2005, must be
1112	maintained by the licensee for a period of at least 3 years
1113	after the death of the insured and must be available to the
1114	office or department for inspection during reasonable business
1115	hours.
1116	(5)  The office has jurisdiction over all viatical
1117	settlement purchase agreements made before July 1, 2005,
1118	including, but not limited to, the authority to examine persons
1119	in possession of records relating to viatical settlement
1120	purchase agreements made before July 1, 2005, and that authority
1121	set forth in s. 624.319.
1122	(6)  If the office makes the determination that a viatical
1123	settlement provider does not have the financial ability to
1124	perform its present or future obligations under the viatical
1125	settlement purchase agreements made before July 1, 2005, the
1126	office shall make a referral to the United States Securities and
1127	Exchange Commission or the Office of Financial Regulation for
1128	further administrative action pursuant to s. 517.191, including,
1129	but not limited to, the appointment of a receiver by the court.
1130	(7)  Subsections (1), (2), (3), and (4) apply to life
1131	expectancy providers providing life expectancies in the state
1132	and providing life expectancies to viatical settlement providers
1133	in the state, as if life expectancy providers were licensees.
1134	Section 24.  Section 626.99245, Florida Statutes, is
1135	amended to read:
1136	626.99245  Conflict of regulation of viaticals.--
1137	(1)  A viatical settlement provider who from this state
1138	enters into a viatical settlement purchase agreement with a
1139	purchaser who is a resident of another state that has enacted
1140	statutes or adopted regulations governing viatical settlement
1141	purchase agreements, shall be governed in the effectuation of
1142	that viatical settlement purchase agreement by the statutes and
1143	regulations of the purchaser's state of residence. If the state
1144	in which the purchaser is a resident has not enacted statutes or
1145	regulations governing viatical settlement purchase agreements,
1146	the provider shall give the purchaser notice that neither
1147	Florida nor his or her state regulates the transaction upon
1148	which he or she is entering. For transactions in these states,
1149	however, the viatical settlement provider is to maintain all
1150	records required as if the transactions were executed in
1151	Florida. However, the forms used in those states need not be
1152	approved by the office.
1153	(1)(2)  A viatical settlement provider who from this state
1154	enters into a viatical settlement contract with a viator who is
1155	a resident of another state that has enacted statutes or adopted
1156	regulations governing viatical settlement contracts shall be
1157	governed in the effectuation of that viatical settlement
1158	contract by the statutes and regulations of the viator's state
1159	of residence. If the state in which the viator is a resident has
1160	not enacted statutes or regulations governing viatical
1161	settlement agreements, the provider shall give the viator notice
1162	that neither Florida nor his or her state regulates the
1163	transaction upon which he or she is entering. For transactions
1164	in those states, however, the viatical settlement provider is to
1165	maintain all records required as if the transactions were
1166	executed in Florida. The forms used in those states need not be
1167	approved by the office.
1168	(2)(3)  This section does not affect the requirement of ss.
1169	626.9911(12)(5) and 626.9912(1) that a viatical settlement
1170	provider doing business from this state must obtain a viatical
1171	settlement license from the office. As used in this subsection,
1172	the term "doing business from this state" includes effectuating
1173	viatical settlement contracts and effectuating viatical
1174	settlement purchase agreements from offices in this state,
1175	regardless of the state of residence of the viator or the
1176	viatical settlement purchaser.
1177	(4)  The offer, sale, and purchase of viatical settlement
1178	contracts, and the regulation of viatical settlement providers
1179	shall be within the exclusive jurisdiction of the Office of
1180	Insurance Regulation under the provisions of this part.
1181	Section 25.  Section 626.9925, Florida Statutes, is amended
1182	to read:
1183	626.9925  Rules.--The commission may adopt rules to
1184	administer this act, including rules establishing standards for
1185	evaluating advertising by licensees; rules providing for the
1186	collection of data, for disclosures to viators or purchasers,
1187	and for the reporting of life expectancies and the registration
1188	of life expectancy providers; and rules defining terms used in
1189	this act and prescribing recordkeeping requirements relating to
1190	executed viatical settlement contracts and viatical settlement
1191	purchase agreements.
1192	Section 26.  Section 626.9926, Florida Statutes, is amended
1193	to read:
1194	626.9926  Rate regulation not authorized.--Nothing in this
1195	act shall be construed to authorize the office or department to
1196	directly or indirectly regulate the amount paid as consideration
1197	for entry into a viatical settlement contract or viatical
1198	settlement purchase agreement.
1199	Section 27.  Subsection (1) of section 626.9927, Florida
1200	Statutes, is amended to read:
1201	626.9927  Unfair trade practices; cease and desist;
1202	injunctions; civil remedy.--
1203	(1)  A violation of this act is an unfair trade practice
1204	under ss. 626.9521 and 626.9541 and is subject to the penalties
1205	provided in the insurance code. Part IX X of this chapter
1206	applies to a licensee under this act or a transaction subject to
1207	this act as if a viatical settlement contract and a viatical
1208	settlement purchase agreement were an insurance policy.
1209	Section 28.  Paragraph (b) of subsection (1) of section
1210	626.99275, Florida Statutes, is amended, and paragraph (d) is
1211	added to said subsection, to read:
1212	626.99275  Prohibited practices; penalties.--
1213	(1)  It is unlawful for any person:
1214	(b)  Knowingly or with the intent to defraud, for the
1215	purpose of depriving another of property or for pecuniary gain,
1216	issue or use a pattern of false, misleading, or deceptive life
1217	expectancies In the solicitation or sale of a viatical
1218	settlement purchase agreement:
1219	1.  To employ any device, scheme, or artifice to defraud;
1220	2.  To obtain money or property by means of an untrue
1221	statement of a material fact or by any omission to state a
1222	material fact necessary in order to make the statements made, in
1223	light of the circumstances under which they were made, not
1224	misleading; or
1225	3.  To engage in any transaction, practice, or course of
1226	business which operates or would operate as a fraud or deceit
1227	upon a person.
1228	(d)  Knowingly or intentionally facilitate the change of
1229	state of residency of a viator to avoid the provisions of this
1230	chapter.
1231	(2)  A person who violates any provision of this section
1232	commits:
1233	(a)  A felony of the third degree, punishable as provided
1234	in s. 775.082, s. 775.083, or s. 775.084, if the insurance
1235	policy involved is valued at any amount less than $20,000.
1236	(b)  A felony of the second degree, punishable as provided
1237	in s. 775.082, s. 775.083, or s. 775.084, if the insurance
1238	policy involved is valued at $20,000 or more, but less than
1239	$100,000.
1240	(c)  A felony of the first degree, punishable as provided
1241	in s. 775.082, s. 775.083, or s. 775.084, if the insurance
1242	policy involved is valued at $100,000 or more.
1243	Section 29.  Section 626.99278, Florida Statutes, is
1244	amended to read:
1245	626.99278  Viatical provider anti-fraud plan.--Every
1246	licensed viatical settlement provider and registered life
1247	expectancy provider viatical settlement broker must adopt an
1248	anti-fraud plan and file it with the Division of Insurance Fraud
1249	of the department on or before December 1, 2000. Each anti-fraud
1250	plan shall include:
1251	(1)  A description of the procedures for detecting and
1252	investigating possible fraudulent acts and procedures for
1253	resolving material inconsistencies between medical records and
1254	insurance applications.;
1255	(2)  A description of the procedures for the mandatory
1256	reporting of possible fraudulent insurance acts and prohibited
1257	practices set forth in s. 626.99275 to the Division of Insurance
1258	Fraud of the department.;
1259	(3)  A description of the plan for anti-fraud education and
1260	training of its underwriters or other personnel.; and
1261	(4)  A written description or chart outlining the
1262	organizational arrangement of the anti-fraud personnel who are
1263	responsible for the investigation and reporting of possible
1264	fraudulent insurance acts, and investigating unresolved material
1265	inconsistencies between medical records and insurance
1266	applications.
1267	(5)  For viatical settlement providers, a description of
1268	the procedures used to perform initial and continuing review of
1269	the accuracy of life expectancies utilized in connection with a
1270	viatical settlement contract or viatical settlement investment.
1271	Section 30.  Section 626.9928, Florida Statutes, is amended
1272	to read:
1273	626.9928  Acquisitions.--Acquisition of interest in a
1274	viatical settlement provider or viatical settlement broker is
1275	subject to s. 628.4615.
1276	Section 31.  Section 626.99285, Florida Statutes, is
1277	amended to read:
1278	626.99285  Applicability of insurance code.--In addition to
1279	other applicable provisions cited in the insurance code, the
1280	office or department, as appropriate, has the authority granted
1281	under ss. 624.310, 626.901, and 626.989 to regulate viatical
1282	settlement providers, viatical settlement brokers, viatical
1283	settlement sales agents, viatical settlement contracts, viatical
1284	settlement purchase agreements, and viatical settlement
1285	transactions.
1286	Section 32.  Section 626.99295, Florida Statutes, is
1287	amended to read:
1288	626.99295  Grace period.--Any person who was effectuating a
1289	viatical settlement purchase agreement as defined in s.
1290	626.9911(8), as such provision existed immediately prior to the
1291	effective date of this act, which viatical settlement purchase
1292	agreement was not registered pursuant to chapter 517, must
1293	proceed within 30 days after the effective date of this act to
1294	conclude all viatical settlement purchase transactions in
1295	progress, provided, if funds have not been matched with a
1296	viaticated policy, such funds, or any unmatched portion of such
1297	funds, shall be returned to the viatical settlement purchaser as
1298	defined in s. 626.9911(9), as such provision existed immediately
1299	prior to the effective date of this act, within 30 days after
1300	the effective date of this act. The provider may not solicit,
1301	negotiate, advertise, or effectuate new viatical settlement
1302	purchase agreements after the effective date of this act. An
1303	unlicensed viatical settlement provider or viatical settlement
1304	broker that was legally transacting business in this state on
1305	June 30, 2000, may continue to transact such business, in the
1306	absence of any orders by the office, department, or the former
1307	Department of Insurance to the contrary, until the office or
1308	department, as applicable, approves or disapproves the viatical
1309	settlement provider's application for licensure if the viatical
1310	settlement provider or viatical settlement broker filed with the
1311	former department an application for licensure no later than
1312	August 1, 2000, and if the viatical settlement provider or
1313	viatical settlement broker complies with all other provisions of
1314	this act. Any form for which former department approval was
1315	required under this part must have been filed by August 1, 2000,
1316	and may continue to be used until disapproved by the office or
1317	department.
1318	Section 33.  Sections 626.9917, 626.9918, 626.99235,
1319	626.99236, and 626.99277, Florida Statutes, are repealed.
1320	Section 34.  This act shall take effect upon becoming a
1321	law.

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