Chapter 6 Florida Statutes Rules and Regulations pertaining to life products

Life insurance Solicitation

Any sales presentation used by insurers or their agents in communication with public must be accurate

Exemptions Replacement Rule does not apply

Existing life insurance is a non convertible term policy with 5 years or less to expire and which cannot be renewed

Group Life Insurance

Is also written as annually Renewable Term

Exemptions

Replacement rules do not apply to the following types of transactions:Industrial insurance used to be sold agent used to pick up premiums in cash.

Freelook

The provision of mandated in most states. in Florida life insurance and Annuities have a special 14 day period

solicitation regulation

The purpose is to provide buyers with information which will improve their ability to select the most appropriate policy.

Advertising gifts

a licensed insurer or its agents may not give to insureds or prospective insureds for the purpose of advertising any articles of merchandise that have a value of more than $25.

Suitability

a requirement to determine if an insurance product is appropriate for a customer

Florida Replacement Rule

applies when a life agent makes a life insurance proposal and knows our should know that the purchase of such policy will replace existing life insurance.

Policy Summary

cannot be combat with a sales illustration

Spendthrift Clause

designed to protect the life insurance policy proceeds that have not yet been paid to a named beneficiary from the claims of the creditors of the beneficiary or policyowner.

Death pending conversion

if an insured dies during conversion period before an individual policy has become effective the death benefit must be payable as a claim under the group policy

Advertising and sales

must be accurate and not misrepresent the facts.

All Group Life Insurance policies issued in Florida

must contain certain provisions as specified in Florida Statutes.

Misstatement of Age

policy premiums and or benefits msy be adjusted in the event the age of the insured has been misstated provisions must contain clear statement of the method of adjustment to be used.

lapse

policy termination due to nonpayment of premium

Grace period

31 days must be allowed for the payment of every premium after the first. subject to interest charge. after grace period insurance will continue in force, if insured dies overdue premium will be deducted from any of the policy settlements.

Provisions

Additional state specific regulations that pertain to life insurance policies issued in this state that are promulgated to protect the interest of the public.

In the state of Florida

Group Life Insurance is a plan that provides coverage to more than one person under one policy. Usually written for employee-employer groups.

individual Life insurance

Is written on a single life. The rate of coverage is based upon the underwriting of that individual

Replacing insurers

Send the applicant a completed comparison information form containing information regarding the proposed insurance within 5 working days of the date of application and the Regarding Replacement are received at the insurers home or regional office or the date its policy is issued, whichever is sooner.

Duties of the replacing producer

Submit to the replacing insurance company a copy of the replacement notice with the application.

Existing Insurers

The existing Insurers are also required to retain and be able to produce all replacement notifications for at least 3 years or until the conclusion of next regular examination by insurance Department whichever is later.

Certificate of insurance

The insurer is required to issue to the policyholder for delivery to each individual insured a certificate of insurance setting forth a statement as to the protection provided, to whom the insurance benefits are payable, and the insureds rights.

Senior consumer

The insurer or agent does not have any obligation to a senior consumer in relation to the recommendation if the consumer refuses to provide relevant information as requested by insurer or agent.

Group Life Insurance

The rate and coverage are based upon group underwriting with all individuals covered for the same amount and rate. The cost of coverage paid by the employer in excess of $50,000 is taxed to the employee.

Each producer who initiates the application must submit

a statement signed by applicant as to whether replacement of existing life insurance or annuity is involved in the transaction; and as to whether the producer knows replacement is or may be involved in the transaction.

Policy Summary

a written statement describing the features and elements of the policy being issued, must be a separate document

Free Insurance

advertising,offering, or providing free insurance as an inducement to the purchase or sale of real or personal property or of services directly or indirectly connected with such real or personal property is prohibited.

Payments of benefits

any benefit due by reason of insureds death must be payable to the beneficiary designated in the policy

Nonforfeiture Values

benefits in a life insurance policy that the policyowner cannot lose

Conversion on termination of policy

every insured who has been covered by the policy for at least 5 years,including their dependents are entitled to convert to individual coverage subject to the same conditions and limitations as the group policy.

Secondary Addressee

if a life insurance policy offers a grace period of more than 51 days, the policyowner must be given the notification at least 21 days before expiration of the grace period.

policy proceeds

in life insurance, the death benefit

Other Characteristics of group policies include

individual members covered under the group master policy must have the right to convert their coverage to an individual policy without evidence of insurability should they leave the group.

False Information and Advertising

insurers may not knowingly make, publish, disseminate, circulate or place before public(directly or indirectly)an advertisement, announcement or statement containing assertion, representation or statement with respect to the business of insurance which is untrue,deceptive, or misleading.

Buyer's Guide

is a document that contains generic information about life insurance policies.

Duties of the replacing producer

leave the applicant with the original or copy of written or printed communications used for presentation to the applicant.

Promulgate

make public, proclaim to put into action(laws, court decrees, and similar)

Solicitation of insurance

means an attempt to persuade a person to buy an insurance policy,and it can be done orally or in writing.

Secondary notice

provision protects elderly insureds. coverage for persons are 64 and older that has been in force for at least 1 year cannot lapse for non payment of premium after expiration of the grace period without the insurer notifying the policyowner and specified secondary addressee

Disclosure

revealed information to help someone make an intelligent and educated decision

The Florida Insurance Solicitation Law

spells out the information and procedures required of agents and insurers when proposing life insurance to a prospective buyer.

Advertising and Sales

the insurer who's policies are advertised is responsible for all it's advertisements,regardless of who wrote,created, presented, or distributed them.

Competent Parties

the parties of a contract requires both parties be of legal age to contract insurance mentally competent to understand the contract, not under the influence of drugs or alcohol. minimum age entering into contact for life insurance or annuity in Florida age 15.

incontestabilty period

this provision prevents an insurer from denying claim due to statements in application after the policy has been in force for a period of 2 years.

Claim

A request for payment of the benefits provided by an insurance contract.

Annuity Suitability factors

Age 45 and under no annuities; Annually Income; Tax status; financial needs and timeline, investment objections,liquidity needs and liquid net worth, existing assets,intended use, to protect Income& estate,risk tolerance.

Life Insurance Regulation Does not apply to

Annuities, Credit Life insurance; Group Life; Variable Life insurance Policies in which the death benefits and cash values vary according to the investments in a separate account; and Life insurance policies issued in connection with pension and welfare plans that are subject to ERISA

Duties of the replacing producer

Applicant must be presented a notice of regarding replacement that is both signed by Applicant and producer, a copy must be left with the Applicant.

Senior consumers

Insurer,managing general accounts,insurance agencies, and agents must maintain records of information collected from senior consumers and other information used in recommendations the were the basis for insurance transactions for 5 years after the insurance transaction is completed by the insurer.

Replacing insurers

Maintain copies of replacement notice, all written communications the applicants signed statement regarding replacement and a replacement register in their home office for at least 3 years or until the conclusion of the next regular examination by the insurance department, whichever is later.

Replacement

Means any transaction in which new life insurance or a new annuity is purchased and as a result, the existing life insurance or annuity has been or will be

Every policy issued in the state of Florida must specify

Names of parties to a contract; The subject of the insurance; risks against insured; effective date and period of coverage; the premium; conditions pertaining to the insurance; the form numbers and edition dates of all endorsements attached to the policy.

The Florida Replacement Rule

Sets forth the requirements and procedures to be followed by insurance companies and agents when a proposal is being made in which a prospective life insurance buyer will be replacing existing insurance contracts with the proposed new insurance

Insurability

The insurer reserves the right to require an insurance applicant to provide evidence of individual insurability as condition to coverage

Entire Contract

This provision states that the copy of the application must be attached to the policy when issued. All statements made by policyholder or by persons insured will be deemed representations and not warranties.

Prohibited Practices

Using misleading terms, such as financial planner, investment advisor financial consultant, or similar, to imply that the insurance agent is generally engaged in an advisory business in which compensation is not related to sales

duties of the replacing insurance company

Within a specified period of time a policy summary or ledger statement containing policy data on the proposed life insurance or annuity must be included.

Policy Summary

Written statement describing the elements of the policy and includes key features conditions and restrictions of the policy being applied for.

Grace period

a grace period is 30 days l,however may impose an interest charge not to exceed 8%per year for the number of days elapsing

Senior Consumers

is a person age 65 or older.

Replacing Insurer

is the company that issues new policy

Existing Insurer

is the company whose policy is being replaced

Group Life Insurance

is written as a master policy, issued to the sponsoring organization, covering the lives of more than one individual member of that group.

Certificate of insurance

must contain group policy number;description of insurance protection to which the certificate holder is entitled; names of insured, beneficiaries and dependents and the rights and conditions.

Existing Insurers

must provide policyowners with a policy summary for the existing life insurance within 10 days of receiving the written communication and replacement of requested.

Duties of the replacing producer

obtain a list of all life insurance and/or annuity policies to be replaced including policy numbers and names of all companies being replaced.

Disclosure

Every Applicant for a life insurance policy must be given a written disclosure statement that provides basic information about the cost and coverage of the insurance being solicited.

Annuity Suitability

it is a producers responsibility to make sure that annuity transactions address consumers needs and financial objectives. Producers must make a reasonable effort to obtain relevant information from the consumer and evaluate the following factors.

Senior Consumer

an annuity contract issued to a senior consumer age 65 or older may not contain a surrender or deferred sales charge for a withdrawal of money from an annuity exceeding 10% of the amount withdrawn.

Conversion on termination of eligibility

convert to individual coverage without evidence of insurability within 31 days

Conversion

All group Life Insurance policies issued in this state must provide the insured conversion privilege.

Life agents

Cannot be designated as policy beneficiaries unless the agent is placing coverage on a family member. (Controlled business)

ERISA

Employee Retirement Income Security Act: Defines federal standards for private pension plans

The Code of Ethics of the Florida Association of Insurance and Financial Advisers

Establishes a broad outline defining appropriate and inappropriate business behavior for life insurance agents.It also Establishes the activities of agents as one of public trust.

Replacing insurers

Provide each prospective purchaser a buyers guide and policy summary prior to accepting any applicant's initial premium unless the policy contains free look period of atleast 10 days;(Florida 14 days)