July 07, 2020
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Bill No. 2994
Amendment No. 472059
Senate House

1Representative Rivera offered the following:
3     On page 209, between lines 5 and 6 insert:
4     Section 167.  Effective upon this act becoming a law,
5subsections (3), (4), and (5) are added to section 627.404,
6Florida Statutes, to read:
7     627.404  Insurable interest; personal insurance.--
8     (3)  Any trust, partnership, limited liability company, or
9similar entity that is approved in writing either by a public or
10private university in this state that receives state funds and
11meets the requirements of s. 501(c)(3) of the Internal Revenue
12Code of 1986, as amended, or a public or private university in
13Florida that receives state funds to which a charitable
14contribution could be made under s.170(c)(1), (2) or (3) of the
15Internal Revenue Code of 1986, as amended, may own or purchase
16life insurance on an insured who consents in writing to the
17ownership or purchase of that insurance, subject to the
19     (a)  The approved trust, partnership, limited liability
20company, or similar entity must be, in part, formed for the
21purpose of generating funds for one or more approving public or
22private universities in this state that receive state funds.
23     (b)  The approved trust, partnership, limited liability
24company, or similar entity may procure or cause to be procured a
25combination of life insurance policies and annuity contracts on
26the life of consenting individual insureds. Payments under the
27annuity contracts shall be reasonably anticipated to fund the
28premiums on the life insurance policies for the second and
29succeeding years.
30     (c)  At least 99 percent of all funds used by the approved
31trust, partnership, limited liability company, or similar entity
32to procure the life insurance policies and annuity contracts
33must be from qualified institutional buyers as defined by Rule
34144A of the Federal Securities Act of 1933 or proceeds from
35annuity contracts or other insurance policies procured with the
36funds invested by qualified institutional buyers, and interest
37income thereon.
38     (d)  The investment in the approved trust, partnership,
39limited liability company, or similar entity by qualified
40institutional buyers shall be pursuant to a non-public offering
41or a public offering through a registered broker ordealer under
42the Securities Exchange Act of 1934.
43     (e)  No qualified institutional buyer may procure or hold
44any direct interest in the life insurance policies or the
45annuity contracts, or the benefits from such policies or
46contracts, except as part of a secured transaction, subject to
47chaper 517 or to federal securities laws.
48     (f)  The public or private university in this state that
49receives state funds as designated by the individual insured
50must, at the time of the acquisition of the life insurance
51policies by the approved trust, partnership, limited liability
52company, or similar entity, reasonably anticipate receiving the
53death benefit proceeds of each life insurance policy on such
54individual insured after the return of the amount invested and
55yield accrued and payable to the qualified institutional buyers
56in accordance with the securities offering or other disclosure
57materials. The reasonably anticipated minimum percentage or
58amount of the death benefit proceeds of the life insurance
59policies to be ultimately received by the designated
60organization must be disclosed in the relevant securities
61offering or other disclosure materials used in any offering.
62     (g)  The individual insured and each designated public or
63private university in this state that receives state funds must
64be informed prior to the ownership or purchase of life insurance
65on the individual insured by the approved trust, partnership,
66limited liability company, or similar entity, of the minimum
67percentage or amount of the proceeds of the life insurance
68policy that is reasonably anticipated to be ultimately paid to
69the designated organization.
70     (h)  The individual insured must provide an affidavit
71stating that neither the individual insured, any relative of the
72individual insured as defined in s. 112.312(21), nor any entity
73controlled by the individual insured or relative, other than a
74public or private university in this state that receives state
75funds, received any monetary remuneration in consideration for
76the individual insured's consent to purchase the life insurance
77policy, except third-party expenses incurred in connection with
78the grant of such consent.
79     (4)  Transactions involving the procurement or funding of
80the procurement of a life insurance policy or annuity contract
81pursuant to subsection (3) are prohibited without the prior
82approval of the Department of Financial Services in consultation
83with the Office of Financial Regulation and Office of Insurance
84Regulation which approval shall only be provided upon a
85determination that the planned transaction meets the
86requirements of subsection (3), is fiscally prudent and is
87determined to be in the best interest of the citizens of this
88state. Upon approval, a trust, partnership, limited liability
89company, or similar entity that meets the requirements of
90subsection (3) has an insurable interest in the life of the
91individual insured.
92     (5)  With respect to the designated trust, partnership,
93limited liability company, or similar entity described in
94subsection (3), except in the case of a material default of, or
95commencement of a delinquency proceeding against, the life
96insurer or annuity company, or the life insurer or annuity
97company exercising its right to contest the life insurance
98policy or annuity contract:
99     (a)  The life insurance policies procured or caused to be
100procured by such entity may not be assigned or transferred by
101such entity;
102     (b)  The ownership or beneficiary designation in favor of
103such entity of the life insurance policies procured or caused to
104be procured by such entity may not be changed; or
105     (c)  A policy loan under the life insurance policies
106procured or caused to be procured by such entity may not be
107taken out by such entity;
109unless such entity applies for and obtains a license pursuant to
110the provisions of s. 626.9912 prior to such transfer or
111assignment of ownership, change in beneficiary, or policy loan.
112All transactions under s. 626.9912 are subject to chapter 571.
114================= T I T L E  A M E N D M E N T =================
115     On page 16, line 1, after the semicolon insert:
116amending s. 627.404, F.S.; authorizing certain entities to own
117or purchase life insurance on an insured under certain
118circumstances; providing requirements; providing limitations;

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