February 25, 2020
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HB 825

A bill to be entitled
2An act relating to insurance; providing a short title;
3amending s. 624.310, F.S.; expanding the definition of
4"affiliated party" to include certain third-party
5marketers; amending s. 626.025, F.S.; including family
6members of insurance agents in a prohibition related to
7the transaction of life insurance; amending s. 626.621,
8F.S.; expanding grounds for discretionary refusal,
9suspension, or revocation of certain licenses; amending s.
10626.641, F.S.; prohibiting the Department of Financial
11Services from issuing certain licenses in certain
12circumstances; amending s. 626.798, F.S.; prohibiting a
13family member of a life insurance agent from being a
14beneficiary of certain policies; amending s. 626.9521,
15F.S.; providing that the failure to ascertain a customer's
16age at the time of an insurance application does not
17constitute a defense to certain violations of state law;
18authorizing the use of video depositions in certain
19circumstances; amending s. 626.99, F.S.; extending the
20unconditional refund period for fixed annuity contracts
21and variable or market value annuity contracts for
22customers 65 years of age or older; requiring that the
23unconditional refund amount for a variable or market value
24annuity contract be equal to the cash surrender value
25provided in the contract, plus any fees or charges
26deducted from the premiums or imposed under the contract;
27providing for applicability of certain provisions;
28requiring that an insurer provide a prospective purchaser
29of an annuity policy with a buyer's guide to annuities;
30requiring that such buyer's guide contain certain
31information; requiring that an insurer attach a cover page
32to an annuity policy informing the purchaser of the
33unconditional refund period; requiring that the cover page
34provide other specified information; amending s. 627.4554,
35F.S.; defining the term "accredited investor"; authorizing
36the Department of Financial Services to order an insurance
37agent to pay monetary restitution to a senior consumer
38under certain circumstances; limiting the amount of such
39restitution; prohibiting an annuity contract issued to a
40senior consumer from containing a surrender or deferred
41sales charge for withdrawal of funds from an annuity in
42excess of a specified maximum amount; providing for the
43periodic reduction of such charge; creating s. 817.2351,
44F.S.; providing that it is unlawful for a natural person
45to perform certain acts in connection with the rendering
46of any advice or the offer, sale, or purchase of any
47financial services product to a person who is 65 years of
48age or older; providing that performance of such a
49prohibited act constitutes a felony of the third degree;
50providing for applicability; providing that criminal
51prosecution for certain offenses is subject to specified
52time limitations as prescribed by state law; providing an
53effective date.
55Be It Enacted by the Legislature of the State of Florida:
57     Section 1.  This act may be cited as the "Safeguard Our
58Seniors Act."
59     Section 2.  Paragraph (a) of subsection (1) of section
60624.310, Florida Statutes, is amended to read:
61     624.310  Enforcement; cease and desist orders; removal of
62certain persons; fines.-
63     (1)  DEFINITIONS.-For the purposes of this section, the
65     (a)  "Affiliated party" means any person who directs or
66participates in the conduct of the affairs of a licensee and who
68     1.  A director, officer, employee, trustee, committee
69member, or controlling stockholder of a licensee or a subsidiary
70or service corporation of the licensee, other than a controlling
71stockholder which is a holding company, or an agent of a
72licensee or a subsidiary or service corporation of the licensee;
73     2.  A person who has filed or is required to file a
74statement or any other information required to be filed under s.
75628.461 or s. 628.4615;
76     3.  A stockholder, other than a stockholder that is a
77holding company of the licensee, who participates in the conduct
78of the affairs of the licensee; or
79     4.  An independent contractor who:
80     a.  Renders a written opinion required by the laws of this
81state under her or his professional credentials on behalf of the
82licensee, which opinion is reasonably relied on by the
83department or office in the performance of its duties; or
84     b.  Affirmatively and knowingly conceals facts, through a
85written misrepresentation to the department or office, with
86knowledge that such misrepresentation:
87     (I)  Constitutes a violation of the insurance code or a
88lawful rule or order of the department, commission, or office;
90     (II)  Directly and materially endangers the ability of the
91licensee to meet its obligations to policyholders; or.
92     5.  A third-party marketer who aids or abets a licensee in
93a violation of the insurance code relating to the sale of an
94annuity to a person 65 years of age or older.
96For the purposes of this subparagraph, any representation of
97fact made by an independent contractor on behalf of a licensee,
98affirmatively communicated as a representation of the licensee
99to the independent contractor, shall not be considered a
100misrepresentation by the independent contractor.
101     Section 3.  Subsection (13) of section 626.025, Florida
102Statutes, is amended to read:
103     626.025  Consumer protections.-To transact insurance,
104agents shall comply with consumer protection laws, including the
105following, as applicable:
106     (13)  The prohibition against the designation of a life
107insurance agent or his or her family member as the beneficiary
108of life insurance policy sold to an individual other than a
109family member under s. 626.798.
110     Section 4.  Subsection (13) is added to section 626.621,
111Florida Statutes, to read:
112     626.621  Grounds for discretionary refusal, suspension, or
113revocation of agent's, adjuster's, customer representative's,
114service representative's, or managing general agent's license or
115appointment.-The department may, in its discretion, deny an
116application for, suspend, revoke, or refuse to renew or continue
117the license or appointment of any applicant, agent, adjuster,
118customer representative, service representative, or managing
119general agent, and it may suspend or revoke the eligibility to
120hold a license or appointment of any such person, if it finds
121that as to the applicant, licensee, or appointee any one or more
122of the following applicable grounds exist under circumstances
123for which such denial, suspension, revocation, or refusal is not
124mandatory under s. 626.611:
125     (13)  Has been the subject of or has had a license, permit,
126appointment, registration, or other authority to conduct
127business subject to any decision, finding, injunction,
128suspension, prohibition, revocation, denial, judgment, final
129agency action, or administrative order by any court of competent
130jurisdiction, administrative law proceeding, state agency,
131federal agency, national securities, commodities, or option
132exchange, or national securities, commodities, or option
133association involving a violation of any federal or state
134securities or commodities law or any rule or regulation adopted
135thereunder, or a violation of any rule or regulation of any
136national securities, commodities, or options exchange or
137national securities, commodities, or options association.
138     Section 5.  Subsection (3) of section 626.641, Florida
139Statutes, is amended to read:
140     626.641  Duration of suspension or revocation.-
141     (3)(a)  If any of an individual's licenses as an agent or
142customer representative, or the eligibility to hold such license
143or licenses has same, as to the same individual have been
144revoked at two separate times, the department may shall not
145thereafter grant or issue any license under this code as to such
147     (b)  If a license as an agent or customer representative or
148the eligibility to hold such a license has been revoked
149resulting from the solicitation or sale of an insurance product
150to a person 65 years of age or older, the department may not
151thereafter grant or issue any license under this code to such
153     Section 6.  Section 626.798, Florida Statutes, is amended
154to read:
155     626.798  Life agent as beneficiary; prohibition.-No life
156agent shall, with respect to the placement of life insurance
157coverage with a life insurer covering the life of a person who
158is not a family member of the agent, handle in his or her
159capacity as a life agent the placement of such coverage when the
160agent placing the coverage or a family member of such agent
161receives a commission therefor and is the named beneficiary
162under the life insurance policy, unless the life agent or family
163member has an insurable interest in the life of such person. For
164the purposes of this section, the phrase "not a family member,"
165with respect to a life agent, means an individual who is not
166related to the life agent as father, mother, son, daughter,
167brother, sister, grandfather, grandmother, uncle, aunt, first
168cousin, nephew, niece, husband, wife, father-in-law, mother-in-
169law, brother-in-law, sister-in-law, stepfather, stepmother,
170stepson, stepdaughter, stepbrother, stepsister, half brother, or
171half sister. For the purposes of this section, the term
172"insurable interest" means that the life agent has an actual,
173lawful, and substantial economic interest in the safety and
174preservation of the life of the insured or a reasonable
175expectation of benefit or advantage from the continued life of
176the insured.
177     Section 7.  Paragraphs (a) and (b) of subsection (3) of
178section 626.9521, Florida Statutes, are amended, and subsections
179(4) and (5) are added to that section, to read:
180     626.9521  Unfair methods of competition and unfair or
181deceptive acts or practices prohibited; penalties.-
182     (3)(a)  If a natural person violates s. 626.9541(1)(l), the
183offense known as "twisting," or violates s. 626.9541(1)(aa), the
184offense known as "churning," the person commits a misdemeanor of
185the first degree, punishable as provided in s. 775.082, and an
186administrative fine not greater than $5,000 shall be imposed for
187each nonwillful violation or an administrative fine not greater
188than $40,000 shall be imposed for each willful violation. To
189impose criminal penalties under this paragraph, the practice of
190"churning" or "twisting" must involve fraudulent conduct.
191     (b)  If a natural person violates s. 626.9541(1)(ee) by
192willfully submitting fraudulent signatures on an application or
193policy-related document, the person commits a felony of the
194third degree, punishable as provided in s. 775.082, and an
195administrative fine not greater than $5,000 shall be imposed for
196each nonwillful violation or an administrative fine not greater
197than $40,000 shall be imposed for each willful violation.
198     (4)  The failure of a licensee to make all reasonable
199efforts to ascertain the consumer's age at the time an insurance
200application is completed does not constitute a defense to a
201violation of this section.
202     (5)  If a consumer who is a senior citizen is a victim, a
203video deposition of the victim may be used for any purpose in
204any administrative proceeding conducted pursuant to chapter 120
205if all parties are given proper notice of the deposition in
206accordance with the Florida Rules of Civil Procedure.
207     Section 8.  Subsection (4) of section 626.99, Florida
208Statutes, is amended to read:
209     626.99  Life insurance solicitation.-
211     (a)  The insurer shall provide to each prospective
212purchaser a buyer's guide and a policy summary prior to
213accepting the applicant's initial premium or premium deposit,
214unless the policy for which application is made provides an
215unconditional refund for a period of at least 14 days, or unless
216the policy summary contains an offer of such an unconditional
217refund., In these instances, which event the buyer's guide and
218policy summary must be delivered with the policy or prior to
219delivery of the policy.
220     (b)  With respect to annuities, the insurer shall provide
221to each prospective purchaser a buyer's guide to annuities
222developed by the department and a contract summary before
223accepting any payment for the contract. as provided in the
224National Association of Insurance Commissioners (NAIC) Model
225Annuity and Deposit Fund Regulation and The policy must provide
226an unconditional refund for a period of at least 14 days. If the
227prospective owner of an annuity contract is 65 years of age or
229     1.  An unconditional refund of premiums paid for a fixed
230annuity contract, including any contract fees or charges, must
231be available for a period of 30 days; and
232     2.  An unconditional refund for variable or market value
233annuity contracts must be available for a period of 30 days. The
234unconditional refund shall be equal to the cash surrender value
235provided in the annuity contract, plus any fees or charges
236deducted from the premiums or imposed under the contract. This
237subparagraph does not apply if the prospective owner is an
238accredited investor, as defined in Regulation D as adopted by
239the United States Securities and Exchange Commission.
240     (c)  The insurer shall attach a cover page to any annuity
241policy informing the purchaser of the unconditional refund
242period prescribed in paragraph (b). The cover page must also
243provide contact information for the issuing company and the
244selling agent, the department's toll-free help line, and any
245other information required by the department by rule. The cover
246page is part of the contract and is subject to review by the
247office pursuant to s. 627.410.
248     (d)(b)  The insurer shall provide a buyer's guide and a
249policy summary to any prospective purchaser upon request.
250     Section 9.  Subsections (3) and (5) of section 627.4554,
251Florida Statutes, as amended by section 9 of chapter 2008-237,
252Laws of Florida, are amended, present subsection (9) of that
253section is renumbered as subsection (10), and a new subsection
254(9) is added to that section, to read:
255     627.4554  Annuity investments by seniors.-
256     (3)  DEFINITIONS.-For purposes of this section, the term:
257     (a)  "Annuity contract" means a fixed annuity, equity
258indexed annuity, fixed equity indexed annuity, or variable
259annuity that is individually solicited, whether the product is
260classified as an individual annuity or a group annuity.
261     (b)  "Accredited investor" means any person who comes
262within any of the following categories, or who the issuer
263reasonably believes comes within any of the following
264categories, at the time of the sale of an annuity to that
266     1.  The person's net worth or joint net worth with his or
267her spouse, at the time of the purchase, exceeds $1 million; or
268     2.  The person had an individual income in excess of
269$200,000 in each of the 2 most recent years, or joint income
270with his or her spouse in excess of $300,000 in each of those
271years, and has a reasonable expectation of reaching the same
272income level in the current year.
273     (c)(b)  "Recommendation" means advice provided by an
274insurance agent, or an insurer if no insurance agent is
275involved, to an individual senior consumer which results in a
276purchase or exchange of an annuity in accordance with that
278     (d)(c)  "Senior consumer" means a person 65 years of age or
279older. In the event of a joint purchase by more than one party,
280a purchaser is considered to be a senior consumer if any of the
281parties is age 65 or older.
283     (a)  The office may order an insurer to take reasonably
284appropriate corrective action, including rescission of the
285policy or contract and a full refund of the premiums paid or the
286accumulation value, whichever is greater, for any senior
287consumer harmed by a violation of this section by the insurer or
288the insurer's insurance agent.
289     (b)  The department may order:
290     1.  An insurance agent to take reasonably appropriate
291corrective action, including monetary restitution of penalties
292or fees incurred by the senior consumer, for any senior consumer
293harmed by a violation of this section by the insurance agent.
294     2.  A managing general agency or insurance agency that
295employs or contracts with an insurance agent to sell or solicit
296the sale of annuities to senior consumers to take reasonably
297appropriate corrective action for any senior consumer harmed by
298a violation of this section by the insurance agent.
299     (c)  The department shall, in addition to any other penalty
300authorized under chapter 626, order an insurance agent to pay
301restitution to any senior consumer who has been deprived of
302money by the agent's misappropriation, conversion, or unlawful
303withholding of moneys belonging to the senior consumer in the
304course of a transaction involving annuities. The amount of
305restitution required to be paid pursuant to this paragraph may
306not exceed the amount misappropriated, converted, or unlawfully
307withheld. This paragraph does not limit or restrict a person's
308right to seek other remedies as provided by law.
309     (d)(c)  Any applicable penalty under the Florida Insurance
310Code for a violation of paragraph (4)(a), paragraph (4)(b), or
311subparagraph (4)(c)2. may be reduced or eliminated, according to
312a schedule adopted by the office or the department, as
313appropriate, if corrective action for the senior consumer was
314taken promptly after a violation was discovered.
315     (9)  PROHIBITED CHARGES.-An annuity contract issued to a
316senior consumer may not contain a surrender or deferred sales
317charge for a withdrawal of money from an annuity exceeding 10
318percent of the amount withdrawn. The charge shall be reduced
319annually by 1 percent so that no surrender or deferred sales
320charge exists after the end of the tenth policy year or at any
321time thereafter. This subsection does not apply to annuities
322purchased by an accredited investor or to those annuities
323specified in paragraph (7)(b).
324     Section 10.  Section 817.2351, Florida Statutes, is created
325to read:
326     817.2351  Fraudulent financial services transactions when
327victim is 65 years of age or older; penalty.-
328     (1)  It is unlawful and a violation of the provisions of
329this chapter for a natural person, in connection with the
330rendering of any advice or the offer, sale, or purchase of any
331annuity product to a person who is 65 years of age or older,
332including, but not limited to, "twisting" as defined in s.
333626.9541(1) or "churning" as defined in s. 626.9541(1)(aa) of
334insurance products, to directly or indirectly:
335     (a)  Employ any device, scheme, or artifice to defraud a
337     (b)  Engage in any transaction, practice, or course of
338business that operates or would operate as a fraud or deceit
339upon a person; or
340     (c)  Knowingly and willfully falsify, conceal, or cover up,
341by any trick, scheme, or device, a material fact, make any
342false, fictitious, or fraudulent statement or representation, or
343make or use any false writing or document while knowing such
344writing or document to contain any false, fictitious, or
345fraudulent statement or entry.
346     (2)  Any natural person who violates this section commits a
347felony of the third degree, punishable as provided in s. 775.082
348or s. 775.083.
349     (3)  This section does not apply to transactions governed
350by chapter 494, chapter 496, chapter 501, chapter 516, chapter
351517, chapter 560, or chapters 655-667.
352     (4)  Criminal prosecution for offenses under this section
353is subject to the time limitations set forth in s. 775.15(8).
354     Section 11.  This act shall take effect July 1, 2010.

CODING: Words stricken are deletions; words underlined are additions.
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