Florida Senate - 2012 CS for SB 1844 By the Committee on Banking and Insurance; and Senator Latvala 597-02858-12 20121844c1 1 A bill to be entitled 2 An act relating to alien insurers; amending s. 3 624.402, F.S.; revising a provision exempting alien 4 insurers from the requirement to obtain a certificate 5 of authority; revising the definition of the term 6 “nonresident”; providing that a life insurance policy 7 and annuity contract may be issued by an insurer 8 domiciled outside the United States under certain 9 conditions; specifying the terms and conditions that 10 must be satisfied before an alien insurer may issue a 11 policy or contract; authorizing the Office of 12 Insurance Regulation to conduct an examination of an 13 alien insurer if the office has reason to believe that 14 the insurer is insolvent or is in unsound financial 15 condition; providing that an alien insurer issuing 16 policies or contracts in this state is subject to part 17 IX of ch. 626, F.S., relating to unfair insurance 18 trade practices; authorizing the office to enforce 19 part IX of ch. 626, F.S.; providing that policies and 20 contracts issued pursuant to the act are not subject 21 to the premium tax; requiring that an application for 22 a life insurance policy or an annuity contract contain 23 certain specified statements to protect consumers; 24 providing an effective date. 25 26 Be It Enacted by the Legislature of the State of Florida: 27 28 Section 1. Subsection (8) of section 624.402, Florida 29 Statutes, is amended, and subsection (9) is added to that 30 section, to read: 31 624.402 Exceptions, certificate of authority required.—A 32 certificate of authority shall not be required of an insurer 33 with respect to: 34 (8)(a) An insurer domiciled outside the United States 35 covering only persons who, at the time of issuance or renewal, 36 are nonresidents of the United States if: 37 1. The insurer
or any affiliated person as defined in s.38 624.04 under common ownership or control with the insurerdoes 39 not solicit, sell, or accept application for any insurance 40 policy or contract to be delivered or issued for delivery to any 41 person in any state; 42 2. The insurer registers with the office via a letter of 43 notification upon commencing business from this state; 44 3. The insurer provides the following information, in 45 English, to the office annually by March 1: 46 a. The name of the insurer; the country of domicile; the 47 address of the insurer’s principal office and office in this 48 state; the names of the owners of the insurer and their 49 percentage of ownership; the names of the officers and directors 50 of the insurer; the name, e-mail, and telephone number of a 51 contact person for the insurer; and the number of individuals 52 who are employed by the insurer or its affiliates in this state; 53 b. The lines of insurance and types of products offered by 54 the insurer; 55 c. A statement from the applicable regulatory body of the 56 insurer’s domicile certifying that the insurer is licensed or 57 registered for those lines of insurance and types of products in 58 that domicile; and 59 d. A copy of the filings required by the applicable 60 regulatory body of the insurer’s country of domicile in that 61 country’s official language or in English, if available; 62 4. All certificates, policies, or contracts issued in this 63 state showing coverage under the insurer’s policy include the 64 following statement in a contrasting color and at least 10-point 65 type: “The policy providing your coverage and the insurer 66 providing this policy have not been approved by the Florida 67 Office of Insurance Regulation”; and 68 5. If In the eventthe insurer ceases to do business from 69 this state, the insurer will provide written notification to the 70 office within 30 days after cessation. 71 (b) For purposes of this subsection, “nonresident” means a 72 trust or other entity organized and domiciled under the laws of 73 a country other than the United States or a person who resides 74 in and maintains a physical place of domicile in a country other 75 than the United States, which he or she recognizes as and 76 intends to maintain as his or her permanent home. A nonresident 77 does not include an unauthorized immigrant present in the United 78 States. Notwithstanding any other provision oflaw, it is 79 conclusively presumed, for purposes of this subsection, that a 80 person is a resident of the United States if the suchperson 81 has: 82 1. Had his or her principal place of domicile in the United 83 States for 180 days or more in the 365 days before prior to84 issuance or renewal of the policy; 85 2. Registered to vote in any state; 86 3. Made a statement of domicile in any state; or 87 4. Filed for homestead tax exemption on property in any 88 state. 89 (c) Subject to the limitations provided in this subsection, 90 services, including those listed in s. 624.10, may be provided 91 by the insurer or an affiliated person as defined in s. 624.04 92 under common ownership or control with the insurer. 93 (d) An alien insurer transacting insurance in this state 94 without complying with this subsection is shallbe in violation 95 of this chapter and subject to the penalties provided in s. 96 624.15. 97 (9)(a) Life insurance policies or annuity contracts may be 98 solicited, sold, or issued in this state by an insurer domiciled 99 outside the United States, covering only persons who, at the 100 time of issuance are nonresidents of the United States, provided 101 that: 102 1. The insurer is currently an authorized insurer in his or 103 her country of domicile as to the kind or kinds of insurance 104 proposed to be offered and must have been such an insurer for 105 not fewer than the immediately preceding 3 years, or must be the 106 wholly owned subsidiary of such authorized insurer or must be 107 the wholly owned subsidiary of an already eligible authorized 108 insurer as to the kind or kinds of insurance proposed for a 109 period of not fewer than the immediately preceding 3 years. 110 However, the office may waive the 3-year requirement if the 111 insurer has operated successfully for a period of at least the 112 immediately preceding year and has capital and surplus of not 113 less than $25 million. 114 2. Before the office may grant eligibility, the requesting 115 insurer furnishes the office with a duly authenticated copy of 116 its current annual financial statement, in English, and with all 117 monetary values therein expressed in United States dollars, at 118 an exchange rate then-current and shown in the statement, in the 119 case of statements originally made in the currencies of other 120 countries, and with such additional information relative to the 121 insurer as the office may request. 122 3. The insurer has and maintains surplus as to 123 policyholders of not less than $15 million. Any such surplus as 124 to policyholders shall be represented by investments consisting 125 of eligible investments for like funds of like domestic insurers 126 under part II of chapter 625; however, any such surplus as to 127 policyholders may be represented by investments permitted by the 128 domestic regulator of such alien insurance company if such 129 investments are substantially similar in terms of quality, 130 liquidity, and security to eligible investments for like funds 131 of like domestic insurers under part II of chapter 625. 132 4. The insurer has of good reputation as to providing 133 service to its policyholders and the payment of losses and 134 claims. 135 5. To maintain eligibility, the insurer furnishes the 136 office within the time period specified in s. 624.424(1), a duly 137 authenticated copy of its current annual and quarterly financial 138 statements, in English, and with all monetary values therein 139 expressed in United States dollars, at an exchange rate then 140 current and shown in the statement, in the case of statements 141 originally made in the currencies of other countries, and with 142 such additional information relative to the insurer as the 143 office may request. 144 6. An insurer receiving eligibility under this subsection 145 agrees to make its books and records pertaining to its 146 operations in this state available for inspection during normal 147 business hours upon request of the office. 148 7. The insurer notifies the applicant in clear and 149 conspicuous language: 150 a. The date of organization of the insurer. 151 b. The identity of and rating assigned by each recognized 152 insurance company rating organization that has rated the insurer 153 or, if applicable, that the insurer is unrated. 154 c. That the insurer does not hold a certificate of 155 authority issued in this state and that the office does not 156 exercise regulatory oversight over the insurer. 157 d. The identity and address of the regulatory authority 158 exercising oversight of the insurer. This paragraph does not 159 impose upon the office any duty or responsibility to determine 160 the actual financial condition or claims practices of any 161 unauthorized insurer, and the status of eligibility, if granted 162 by the office, indicates only that the insurer appears to be 163 financially sound and to have satisfactory claims practices and 164 that the office has no credible evidence to the contrary. 165 (b) If the office has reason to believe that an insurer 166 issuing policies or contracts pursuant to this subsection is 167 insolvent or is in unsound financial condition, does not make 168 reasonable prompt payment of benefits, or is no longer eligible 169 under the conditions specified in this subsection, the office 170 may conduct an examination or investigation in accordance with 171 s. 624.316, s. 624.3161, or s. 624.320 and, if the findings of 172 the examination or investigation warrant, may withdraw the 173 eligibility of the insurer to issue policies or contracts 174 pursuant to this subsection without having a certificate of 175 authority issued by the office. 176 (c) This subsection does not provide an exception to the 177 agent licensure requirements of chapter 626. A insurer issuing 178 policies or contracts pursuant to this subsection shall appoint 179 the agents that the insurer uses to sell such policies or 180 contracts as provided in chapter 626. 181 (d) An insurer issuing policies or contracts pursuant to 182 this subsection is subject to part IX of chapter 626, the Unfair 183 Insurance Trade Practices Act, and the office may take such 184 actions against the insurer for a violation as are provided in 185 that part. 186 (e) Policies and contracts issued pursuant to this 187 subsection are not subject to the premium tax specified in s. 188 624.509. 189 (f) Applications for life insurance coverage offered under 190 this subsection must contain, in contrasting color and not less 191 than 12-point type, the following statement on the same page as 192 the applicant’s signature: 193 194 This policy is primarily governed by the laws of a 195 foreign country. As a result, all of the rating and 196 underwriting laws applicable to policies filed in this 197 state do not apply to this coverage, which may result 198 in your premiums being higher than would be 199 permissible under a Florida-approved policy. A 200 purchase of individual life insurance should be 201 considered carefully, as future medical conditions may 202 make it impossible to qualify for another individual 203 life policy. If the insurer issuing your policy 204 becomes insolvent, this policy is not covered by the 205 Florida Life and Health Insurance Guaranty 206 Association. For information concerning individual 207 life coverage under a Florida-approved policy, consult 208 your agent or the Florida Department of Financial 209 Services. 210 211 (g) All life insurance policies and annuity contracts 212 issued pursuant to this subsection must contain on the first 213 page of the policy or contract, in contrasting color and not 214 less than 10-point type, the following statement: 215 216 The benefits of the policy providing your coverage are 217 governed primarily by the law of a country other than 218 the United States. 219 220 (h) All single-premium life insurance policies and single 221 premium annuity contracts issued to persons who are not 222 residents of the United States and are not nonresidents 223 illegally residing in the United States pursuant to this 224 subsection are subject to chapter 896. 225 (i) For purposes of this subsection, the term “nonresident” 226 means a trust or other entity or person as defined in subsection 227 624.402(8). 228 (j) An alien insurer transacting insurance in this state 229 without complying with this subsection is in violation of this 230 chapter and subject to the penalties provided in s. 624.15, and 231 must also pay the fine required for each violation as prescribed 232 by s. 626.910. 233 Section 2. This act shall take effect upon becoming a law.