The proposed amendments update the rules by removing unnecessary language regarding the Department’s regulation of insurers.

 

DEPARTMENT OF FINANCIAL SERVICES

Division of Insurance Agent and Agency Services

RULE NOS.:RULE TITLES:

69B-151.201Purpose and Scope

69B-151.202Requirements

69B-151.203Adoption of Form OIR-D0-1180

PURPOSE AND EFFECT: The proposed amendments update the rules by removing unnecessary language regarding the Department’s regulation of insurers.

SUMMARY: Rule 69B-151.201, F.A.C., is amended to incorporate the Office of Insurance Regulation’s Form OIR-D0-1180, Policy Disclosure Form and Instructions, by reference. Rule 69B-151.202, F.A.C., is amended to delete unnecessary language. Rule 69B-151.203, F.A.C., is repealed.

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(1) FS

LAW IMPLEMENTED: 626.016(3), 626.9541(1)(aa) 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: Monday, March 5, 2018, at 10:00 a.m.

PLACE: 200 E. Gaines St., Larson Building, Conference Room 139, 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, telephone: [phone], email: [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: Ray Wenger, Chief of Investigations, address: 200 E. Gaines Street, Tallahassee, FL 32399-0320, telephone: [phone], email: [e-mail].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69B-151.201 Purpose and Scope.

(1) The purpose of Rules 69B-151.201 and 69B-151.202, F.A.C., this rule chapter is to implement the provisions of paragraph Section 626.9541(1)(aa), F.S., with respect to churning and to adopt Form OIR-D0-1180. Rules 69B-151.201 and 69B-151.202, F.A.C., This rule and its accompanying disclosure form and instructions (Form OIR-D0-1180), Policy Disclosure Form and Instructions, which is incorporated by reference in Rule 69O-151.203, F.A.C., apply to any and all types of policies and annuity contracts which include a policy value feature, irrespective of the marketing method by which such policies or annuity contracts are sold.

(2) Rules 69B-151.201 and 69B-151.202 This Part, Part III of Chapter 69B-151, F.A.C., shall not apply to:

(a) Conversions of group or individual term policies; or

(b) Group permanent life, group variable life, group fixed annuities and group variable annuities wherein the group master policyholder retains ownership of the contract.

(3) When exercising the following policy provisions, for a purpose other than as a funding source for the purchase of additional insurance contract(s), paragraph 69B-151.202(1) (2)(a), F.A.C., shall not apply to:

(a) Reduced paid-up or extended term insurance options in group life, group variable life, individual life or variable life policies;

(b) Early annuity options of group fixed, group variable, individual fixed or individual variable annuity products; or

(c) A living benefit settlement option of a group permanent life, group variable life, individual life or individual variable life insurance policy.

Rulemaking Authority 624.308(1), 626.9641(1)(aa)2. FS., Chapter 95-219, Laws of Florida. Law Implemented 624.307(1), 626.016(3), 626.9541(1)(aa) FS., Chapter 95-219, Laws of Florida. History–New 2-19-96, Formerly 4-151.201, Amended __________.

 

69B-151.202 Policy Disclosure Requirements.

(1) Effective October 1, 1995, each insurer shall adopt written procedures to reasonably avoid and discourage the practice of churning, as defined in Section 626.9541(1)(aa), F.S.

(2)(a) Form OIR-D0-1180 shall be completed by the insurer or its licensed and appointed agent and provided to the applicant prior to or contemporaneous with the time the applicant signs any application for the purchase of an additional life insurance policy or annuity contract to be funded through the use of values accessed in an existing and in-force policy with that same insurer. Form OIR-D0-1180 shall be completed for each existing and in-force policy to be utilized as a funding source for the purchase of additional insurance contract(s). Any required replacement and sales forms must also be completed. One copy of Form OIR-D0-1180 is to be delivered to the policyowner and one copy must be maintained by the insurer.

(b) If there is a material change in the information originally disclosed to the policyowner on Form OIR-D0-1180 as a result of the underwriting and policy issuance process, an insurer may cause an amended Form OIR-D0-1180 to be reissued, delivered and executed by the agent or corporate officer and the policyowner, and such amended Form OIR-D0-1180 shall constitute the required disclosure under this rule. An insurer must maintain any and all amended versions of Form OIR-D0-1180 in accordance with this rule.

(2) (3) A licensed and appointed agent Insurers may reprint Form OIR-D0-1180 in its adopted format; however, reprints shall not be in a typesize smaller than the format adopted by the Office of Insurance Regulation.

(4) Insurers may affix their name, address and company logo or insignia on the form in a manner not prohibited by Chapter 69B-150, F.A.C., or other applicable laws and rules.

(5) In accordance with Sections 624.316 and 624.3161, F.S., insurers shall maintain executed forms in active policy files for examination purposes. Accordingly, insurers shall maintain executed forms for at least five (5) years or from examination to examination, whichever is longer. In lieu of retaining original, executed forms, Form OIR-D0-1180 may be maintained in a manner retrievable for compliance examination and investigation review purposes.

(3) (6) Policy loan request forms, surrender value request forms, dividend withdrawal request forms, or any other applicable service forms that are necessary to access the funds to be used as a funding source for the payment of premiums for the additional insurance policy shall be completed and executed in their entirety at the time of new policy application and after presentation of the completed Form OIR-D0-1180.

Rulemaking Authority 624.308(1), 626.9541(1)(aa)2. FS., Chapter 95-219, Laws of Florida. Law Implemented 624.307(1), 624.316, 624.3161, 626.016(3), 626.9541(1)(aa) FS., Chapter 95-219, Laws of Florida. History–New 2-19-96, Formerly 4-151.202, Amended __________.

 

69B-151.203 Adoption of Form OIR-D0-1180.

Form OIR-D0-1180 (9/95) “Policy Disclosure Form and Instructions” is hereby adopted and incorporated by reference. Copies may be obtained from the Bureau of Life and Health Solvency and Market Conduct Review, Office of Insurance Regulation, 200 East Gaines Street, Tallahassee, Florida 32399-0327.

Rulemaking Authority 624.308(1), 626.9541(1)(aa)2. FS., Chapter 95-219, Laws of Florida. Law Implemented 624.307(1), 626.9541(1)(aa) FS., Chapter 95-219, Laws of Florida. History–New 2-19-96, Formerly 4-151.203, Repealed__________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Ray Wenger

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jimmy Patronis, Chief Financial Officer

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: February 6, 2018

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: November 7, 2017