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.
   26  Be It Enacted by the Legislature of the State of Florida:
   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 insurer does
   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 event the 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 of law, it is
   79  conclusively presumed, for purposes of this subsection, that a
   80  person is a resident of the United States if the such person
   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 to
   84  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 shall be 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:
  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.
  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:
  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.
  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.