Section 627.4553, F.S., was created by Chapter 2014-123, Laws of Florida, and took effect on July 1, 2014. It requires an insurance agent or insurance company to provide certain information to the consumer prior to the surrender of an annuity or ...  

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    DEPARTMENT OF FINANCIAL SERVICES

    Division of Insurance Agents and Agency Services

    RULE NO.:RULE TITLE:

    69B-215.090Information to be Provided When Recommending the Surrender of an Annuity or Life Insurance Policy with a Cash Value

    PURPOSE AND EFFECT: Section 627.4553, F.S., was created by Chapter 2014-123, Laws of Florida, and took effect on July 1, 2014. It requires an insurance agent or insurance company to provide certain information to the consumer prior to the surrender of an annuity or life insurance policy. The Department is also directed to adopt by rule key pieces of information an agent or insurance company must provide to the consumer before the surrender check is negotiated or cashed.

    SUMMARY: The proposed rule will require the recommending insurance agent or insurance company to provide the specified information to the consumer before the surrender check is negotiated or cashed.

    SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

    The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

    The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Department conducted an economic analysis of the potential impact of the proposed rule and determined that there will be no adverse economic impact or regulatory increases that would require legislative ratification.

    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.

    RULEMAKING AUTHORITY: 624.308, 627.4553 FS.

    LAW IMPLEMENTED: 627.4553 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 (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

    DATE AND TIME: January 22, 2015, 3:00 p.m.

    PLACE: Room 116, Larson Building, 200 E. Gaines Street, Tallahassee, FL

    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: Ray Wenger (850)413-5605 or Ray.Wenger@myfloridacfo.com. 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: Ray Wenger, Bureau of Investigation, 200 E. Gaines Street, Tallahassee, FL 32399-0320 (850)413-5654 or Ray.Wenger@myfloridacfo.com.

     

    THE FULL TEXT OF THE PROPOSED RULE IS:

     

    69B-215.090 Surrender of an Annuity or Life Insurance Policy with a Cash Value.

    (1) The purpose of this rule is to implement the provisions of Section 627.4553, F.S., with respect to the surrender of any cash value life insurance or annuity policy, when the surrender is recommended by an insurance agent, and the proceeds will not be used to fund or purchase another life insurance or annuity policy.

    (2) Before the surrender check is negotiated or cashed, the recommending insurance agent or an insurance company on behalf of their appointed or contracted agent shall provide at least the following:

    (a) The description of the policy or annuity to be surrendered, including:

    1. If the contract is a life insurance policy or annuity contract;

    2. The name of the insured or annuitant;

    3. The policy or contract number;

    4. The surrender date;

    5. The insurance company name, address and telephone number.

    (b) The exact amount being deducted from any accumulation or cash value available as the surrender charge.

    (c) The guaranteed minimum interest rate percentage at the time of surrender.

    (d) A statement in bold print that states there may be a taxable amount being reported to the Internal Revenue Service as a result of the transaction and the owner should contact their tax advisor for more information.

    (e) The amount of any actual forfeited death benefit.

    (f) The actual value of any other investment performance guarantees being forfeited.

    (3)  The date of surrender used by an insurance agent is determined on the date the information is prepared and it must be after the contract’s last anniversary up to the final surrender date of the contract by the insurer.

    (4) Agents must document the calculations used to determine the amounts provided to the consumer. The documentation is to include the source of each number used along with the date that information was obtained.

    Rulemaking Authority 624.308, 627.4553 FS. Law Implemented 627.4553 FS. History–New__________.

     

    NAME OF PERSON ORIGINATING PROPOSED RULE: Ray Wenger, Bureau of Investigation

    NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jeff Atwater, Chief Financial Officer

    DATE PROPOSED RULE APPROVED BY AGENCY HEAD: December 19, 2014

    DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: September 4, 2014

     

Document Information

Comments Open:
12/29/2014
Summary:
The proposed rule will require the recommending insurance agent or insurance company to provide the specified information to the consumer before the surrender check is negotiated or cashed.
Purpose:
Section 627.4553, F.S., was created by Chapter 2014-123, Laws of Florida, and took effect on July 1, 2014. It requires an insurance agent or insurance company to provide certain information to the consumer prior to the surrender of an annuity or life insurance policy. The Department is also directed to adopt by rule key pieces of information an agent or insurance company must provide to the consumer before the surrender check is negotiated or cashed.
Rulemaking Authority:
624.308, 627.4553, FS
Law:
627.4553, FS
Contact:
Ray Wenger, Bureau of Investigation, 200 E. Gaines Street, Tallahassee, FL 32399-0320 (850) 413-5654 or Ray.Wenger@myfloridacfo.com.
Related Rules: (1)
69B-215.090. Information to be Provided When Recommending the Surrender of an Annuity or Life Insurance Policy with a Cash Value