Notice of Proposed Rule

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
PURPOSE AND EFFECT: Pursuant to the Viatical Settlement Act, Part X of Chapter 626, F.S., the Office regulates viatical settlement providers, companies that purchase life insurance policies from the owners (the viators). The policies are purchased at a discount off the face value for the purposes of investment. The viatical settlement providers in turn sell the viaticated policies to institutional investors. When the insured dies the investors receive the full face amount, less costs, thereby recouping their initial purchase price, plus interest.
SUMMARY: Section 626.9925, F.S., gives the Financial Service Commission the authority to adopt rules to administer the Viatical Settlement Act.
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: 624.308(1), 626.9925 FS.
LAW IMPLEMENTED: 624.307(1), 626.9911, 626.9912, 626.9913, 626.9914, 626.9916, 626.9928 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: October 29, 2008, 1:30 p.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 bernie.stoffel@floir.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: Bernie Stoffel, Office of Insurance Regulation, E-mail bernie.stoffel@floir.com

THE FULL TEXT OF THE PROPOSED RULE IS:

VIATICAL SETTLEMENT PROVIDERS

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) “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 viaticated 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.

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

(a) Form OIR-A3-1288, Viatical Settlement Provider Annual Report (REV 3/08).

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

(2) All of the above referenced forms are available from the Office’s website, http://www.floir.com, by clicking on “search” and entering the form number.

(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 and Conflicts of Interest.

With respect to any viatical settlement contract or insurance policy, no viatical settlement provider knowingly may enter into a viatical settlement contract with a viator, if, in connection with such viatical settlement contract, anything of value will be paid to a viatical settlement broker that is controlling, controlled by, or under common control with such viatical settlement provider, financing entity or related provider trust that is involved in such viatical settlement contract.

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

 

69O-204.050 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: Bernie Stoffel, Specialty Product Administration, Bernie.stoffel@floir.com
NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jovita Ashton, Office of Insurance Regulation
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: July 31, 2007
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: December 14, 2007