CS/HB 375

1	A bill to be entitled
2	An act relating to insurable interests; amending s.
3	627.404, F.S.; providing definitions; providing for the
4	requirement of an insurable interest in an insured at the
5	time of an insurance contract; providing for actions by
6	the insured to recover benefits under such a contract paid
7	to a person lacking such an interest at the time such
8	contract was executed; requiring the consent of the person
9	insured for certain contracts; providing exceptions;
10	providing applicability; providing an effective date.
11
12	Be It Enacted by the Legislature of the State of Florida:
13
14	Section 1.  Section 627.404, Florida Statutes, is amended
15	to read:
16	627.404  Insurable interest; personal insurance.--
17	(1)  Any individual of legal capacity may procure or effect
18	an insurance contract on his or her own life or body for the
19	benefit of any person, but no person shall procure or cause to
20	be procured or effected an insurance contract on the life or
21	body of another individual unless the benefits under such
22	contract are payable to the individual insured or his or her
23	personal representatives, or to any person having, at the time
24	such contract was made, an insurable interest in the individual
25	insured. The insurable interest need not exist after the
26	inception date of coverage under the contract.
27	(2)  For purposes of this section, the term:
28	(a)  "Business entity" includes, but is not limited to, a
29	joint venture, partnership, corporation, limited liability
30	company, and business trust.
31	(b)  "Insurable interest" as to life, health, or disability
32	insurance, includes only the following interests:
33	1.  An individual has an insurable interest in his or her
34	own life, body, and health.
35	2.  An individual has an insurable interest in the life,
36	body, and health of another person to whom the individual is
37	closely related by blood or by law and in whom the individual
38	has a substantial interest engendered by love and affection.
39	3.  An individual has an insurable interest in the life,
40	body, and health of another person if such individual has an
41	expectation of a substantial pecuniary advantage through the
42	continued life, health, and safety of that other person and
43	consequent substantial pecuniary loss by reason of the death,
44	injury, or disability of that other person.
45	4.  An individual party to a contract for the purchase or
46	sale of an interest in any business entity has an insurable
47	interest in the life of each other party to such contract for
48	the purpose of such contract only.
49	5.  A trust, or the trustee of a trust, has an insurable
50	interest in the life of an individual insured under a life
51	insurance policy owned by the trust, or the trustee of the trust
52	acting in a fiduciary capacity, if the insured is the grantor of
53	the trust; an individual closely related by blood or law to the
54	grantor; or an individual in whom the grantor otherwise has an
55	insurable interest and provided that in each of the situations
56	described in this subparagraph that the life insurance proceeds
57	are primarily for the benefit of trust beneficiaries having an
58	insurable interest in the life of the insured.
59	6.  A guardian, trustee, or other fiduciary, acting in a
60	fiduciary capacity, has an insurable interest in the life of any
61	person for whose benefit the fiduciary holds property, and in
62	the life of any other individual in whose life such person has
63	an insurable interest so long as the life insurance proceeds are
64	primarily for the benefit of persons having an insurable
65	interest in the life of the insured.
66	7.  A charitable organization meeting the requirements of
67	s. 501(c)(3) of the Internal Revenue Code of 1986, as amended,
68	has an insurable interest in the life of any person who consents
69	in writing to the organization's ownership or purchase of that
70	insurance.
71	8.  A trustee or custodian of assets held in any plan
72	governed by the Employee Retirement Income Security Act of 1974,
73	29 U.S.C. ss. 1001 et seq., or in any other retirement or
74	employee benefit plan, has an insurable interest in the life of
75	any participant in the plan with the written consent of the
76	prospective insured. An employer, trustee, or custodian may not
77	retaliate or take adverse action against any participant who
78	does not consent to the issuance of insurance on the
79	participant's life.
80	9.  A business entity has an insurable interest in the
81	life, body, and health of any of the owners, directors,
82	officers, partners, and managers of the business entity or any
83	subsidiary of the business entity, or key employees or key
84	persons of the business entity or subsidiary, provided that
85	consent is obtained in writing from such key employees or
86	persons before the insurance is purchased. The business entity
87	or subsidiary may not retaliate or take adverse action against
88	any key employee or person who does not consent to the issuance
89	of insurance on the key employee or key person's life.
90	(3)(1)  An insurer shall be entitled to rely upon all
91	statements, declarations, and representations made by an
92	applicant for insurance relative to the insurable interest which
93	such applicant has in the insured; and no insurer shall incur
94	any legal liability except as set forth in the policy, by virtue
95	of any untrue statements, declarations, or representations so
96	relied upon in good faith by the insurer.
97	(4)  If the beneficiary, assignee, or other payee under any
98	insurance contract procured by a person not having an insurable
99	interest in the insured at the time such contract was made
100	receives from the insurer any benefits thereunder by reason of
101	the death, injury, or disability of the insured, the insured or
102	his or her personal representative or other lawfully acting
103	agent may maintain an action to recover such benefits from the
104	person receiving them.
105	(5)  A contract of insurance upon a person, other than a
106	policy of group life insurance or group or blanket accident,
107	health, or disability insurance, may not be effectuated unless,
108	on or before the time of entering into such contract, the person
109	insured, having legal capacity to contract, applies for or
110	consents in writing to the contract and its terms, except that
111	any person having an insurable interest in the life of a minor
112	younger than 15 years of age or any person upon whom a minor
113	younger than 15 years of age is dependent for support and
114	maintenance may effectuate a policy of insurance on the minor.
115	(6)  For purposes of this section, the signature of the
116	proposed insured, having capacity to contract, on the
117	application for insurance shall constitute his or her written
118	consent.
119	(7)  This section does not apply to any policy of life
120	insurance to which s. 624.402(8) applies.
121	(2)  A charitable organization that meets the requirements
122	of s. 501(c)(3) of the Internal Revenue Code of 1986, as
123	amended, may own or purchase life insurance on an insured who
124	consents to the ownership or purchase of that insurance.
125	Section 2.  The amendments to section 627.404, Florida
126	Statutes, made by this act are intended to clarify existing law.
127	Section 3.  This act shall take effect July 1, 2008.

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