To implement the provisions of Chapter 626, Part X, F.S., regulating the business of viatical settlements.

 

DEPARTMENT OF FINANCIAL SERVICES
OIR – Insurance Regulation

RULE NO: RULE TITLE
69O-204.010: Purpose and Scope
69O-204.020: Definitions
69O-204.030: Forms Incorporated By Reference
69O-204.040: Prohibited Practices
69O-204.050: Verification of Coverage
69O-204.060: Required Supplemental Annual Transaction Detail
69O-204.070: Anti-Fraud
PURPOSE AND EFFECT: To implement the provisions of Chapter 626, Part X, F.S., regulating the business of viatical settlements.
SUMMARY: To implement the provisions of Chapter 626, Part X, F.S., regulating the business of viatical settlements.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: No Statement of Estimated Regulatory Cost was prepared.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SPECIFIC AUTHORITY: 626.9925 FS.
LAW IMPLEMENTED: 626.9913, 626.9922(2) FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: January 7, 2008, 9:30 a.m.
PLACE: 116 Larson Building, 200 East Gaines Street, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Bernie Stoffel, Office of Insurance Regulation, E-mail [e-mail]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Bernie Stoffel, Office of Insurance Regulation, E-mail [e-mail]

THE FULL TEXT OF THE PROPOSED RULE IS:

69O-204.010 Purpose and Scope.

The purpose of this Rule Chapter is to implement the provisions of Chapter 626, Part X, Florida Statutes.

Specific Authority 626.9925 FS. Law Implemented 626.991 FS. History–New________.

 

69O-204.020 Definitions.

In addition to the definitions in Section 626.9911, Florida Statutes, the following definitions apply to this regulation:

(1) “Control” or “effective control” as used in the Viatical Settlement Act and this rule chapter means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person.

(2) “Insured” means the person covered under the policy being considered for viatication.

(3) “Net death benefit” means the amount of the life insurance policy or certificate to be viaticated less any outstanding debts or liens.

(4) “Secondary market” means the assignment, transfer, sale, devise, or bequest of the death benefit or ownership of all or a portion of a viaticated life insurance policy or certificate of insurance.

Specific Authority 626.9925 FS. Law Implemented 626.9911(2), 626.9912(4), 626.9913(2), 626.9922(2), 626.9924, 626.9913(2) FS. History–New________.

 

69O-204.030 Forms Incorporated By Reference.

The following forms are incorporated by reference to implement the provisions of Chapter 626, Part X, Florida Statutes.

(1) The following forms which are hereby adopted:

(a) Form OIR-A3-1288, Viatical Settlement Provider Annual Report (REV 10/07).

(b) Form OIR-C1-1294, Notice of Intent to Use a Related Provider Trust (REV 10/05).

(c) Form OIR-A3-1687, Verification of Coverage for Life Insurance Policies (11/2006).

(2) All of the above referenced forms are available from the Office’s website: http://www.floir.com.

(3) All applications, annual report filings, forms submitted by licensees for approval and associated documentation shall be submitted electronically to http://iportal.fldfs.com.

Specific Authority 626.9925 FS. Law Implemented 626.9912(2), 626.9912(3), 626.9913(2), 626.9921(3), 626.9921(4), 626.9928 FS. History–New________.

 

69O-204.040 Prohibited Practices.

A viatical settlement provider shall not act also as a viatical settlement broker, whether entitled to collect a fee directly or indirectly, in the same viatical settlement.

Specific Authority 626.9925 FS. Law Implemented 626.9911(9), 6269916(1), 626.9916(5) FS. History–New________.

 

69O-204.050 Verification of Coverage.

Nothing in this rule chapter shall prohibit a life insurance company and a viatical settlement provider from using a verification of coverage form other than Form OIR-A3-1687 (11/2006) that has been mutually agreed upon in writing in advance of submission of the request.

Specific Authority 626.9925 FS. Law Implemented 626.9924(4) FS. History–New_________.

 

69O-204.060 Required Supplemental Annual Transaction Detail.

In addition to the information contained in the annual report form, OIR-A3-1288, annually on or before March 1, the viatical settlement provider licensee shall prepare and maintain in a computer-readable format compatible with the electronic data systems of the office the information as outlined in subsections (1) and (2) below, pertaining to the activities of the viatical settlement provider during the preceding calendar year. This information shall be maintained for the duration as required by Section 626.9922(2), Florida Statutes. The information requested in subsections (1) and (2) below shall be available to the office at any time for copying and inspection upon reasonable notice to the viatical settlement provider licensee.

(1) A detailed report on all Florida transactions that shall contain the information in paragraphs (a)-(k) below.

(a) Settlement number, case number or unique identifying number used to identify the specific viatical settlement transaction.

(b) Date the viatical settlement contract was purchased by the provider during the current calendar year, whether or not the insured is still alive at the end of the calendar year.

(c) Net amount (in dollars) being viaticated.

(d) Age (in years) of the person insured by the policy being viaticated, at the time of the viatical settlement contract.

(e) Life expectancy (in months) of the insured individual at the time of the viatical settlement contract.

(f) Net amount (in dollars) paid to the viator.

(g) Policy type: individual policy or a group policy.

(h) Type of funding for the transaction: licensed financial institution (policies collateralized), private (purchaser) funding, internal funding, trust, related provider trust, accredited investor, qualified institutional buyer, as defined respectively, in Rule 501(a) or Rule 144A, promulgated under the federal Securities Act of 1933 as amended, or other.

(i) Purchase source of the policy: viatical settlement broker, direct from the viator, insurance agent/producer, secondary market or viatical settlement provider, private (purchaser) funding or other.

(j) Amount of commissions (in dollars) paid to viator source involved in the transaction whether that be a viatical settlement broker, an insurance producer or other licensed entity authorized to be viator source.

(k) Name of the source of the viatical settlement transaction. If it is a broker, producer or other licensee, name that person; if it is direct, from a relative, from the corporation of the insured or any other entity that could possibly reveal the insured, indicate by “Direct,” “Relative,” “Corporation,” or other non-designating word.

(2) An individual mortality report on all transactions involving a Florida viator that shall contain the information requested in paragraphs (a)-(j) below.

(a) Settlement number, case number, or unique identifying number used to identify the specific viatical settlement transaction.

(b) Date of the viatical settlement contract.

(c) Age of the insured at the time of the contract.

(d) Life expectancy (in months) of the insured individual at the time of the viatical settlement contract. For first to die policies, use the shortest life expectancy of the two lives. For second to die policies, use the longest life expectancy of the two lives.

(e) Net amount paid to the viator.

(f) Insured’s date of death. For first to die policies, use the date of the first insured’s death. For second to die policies, use the date of the last insured’s death.

(g) Total amount of premiums (in dollars) required to be paid to the insurer to maintain the policy from the date of viatication to the date of death.

(h) Total death benefit collected from the insurer.

(i) Number of months between the date of contract and the insured’s date of death.

(j) Number of months between the life expectancy of the insured at the time of contract and the insured’s date of death. This should be noted as a plus (+) figure if the insured died after the estimated life expectancy or a minus (-) if the insured died prior to the estimated life expectancy.

Specific Authority 626.9925 FS. Law Implemented 626.9913, 626.9922(2) FS. History–New________.

 

69O-204.070 Anti-Fraud.

Every licensed viatical settlement provider shall establish and maintain in accordance with the provisions of Section 626.9922, F.S.:

(1) Documentation of compliance with its anti-fraud plan and procedures filed in accordance with Section 626.99278, F.S.

(2) All documentation pertaining to resolved and unresolved material inconsistencies between medical records and insurance applications.

(3) Documentation pertaining to the mandatory reporting of possible fraudulent acts and prohibited practices set forth in Section 626.99275, F.S., to the Division of Insurance Fraud of the department.

Specific Authority 626.9925 FS. Law Implemented 626.99278, 626.9922, 626.99275 FS. History–New_______.

NAME OF PERSON ORIGINATING PROPOSED RULE: Jovita Ashton, Director, Office of Insurance Regulation
NAME OF SUPERVISOR OR PERSON WHO APPROVED THE PROPOSED RULE: Mary Beth Senkewicz, Deputy Commissioner, Office of Insurance Regulation
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: July 31, 2007
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: October 20, 2006