Florida Statutes, Rules, and Regulations, Pertinent to Life Insurance Products Rated A+

Florida Statutes, Rules, and Regulations, Pertinent to Life Insurance Products Rated A+ Marketing Practices Insurance agents are required to be familiar with ALL Florida insurance regulations. The MOST important of these are: 1. Florida Life Insurance Solicitation Law - details information and procedures required of agents and insurers when proposing life insurance to a prospective buyer. 2. The Florida Replacement Rule - establishes requirements and procedures that the agents and insurers MUST follow when a propsal is being offered that would replace an exsiting insurance contract with the new proposed insurance. 3. The Code of Ethics of the Florida Association of Insurance and Financial Advisors - felines appropriate and inappropriate Business behavior for life insurance agents. It also establishes the activities of agents as one of public trust. Disclosure Every applicant must be given a written disclosure that provides basic information about cost and coverage of the proposed insurance being solicited. THIS MUST BE GIVEN TO THE APPLICANT NO LATER THAN THE TIME OF APPLICATION FOR INSURANCE IS SIGNED. This will help the applicant make an informed and educated decision about their choice of insurance. Buyer's Guide MUST INCLUDE • Language approved by the Department of Insurance • Explains how a buyer should go about choosing the amount and type of insurance to buy • How a buyer can save money by comparing prices of similar products • Insurers must provide a buyer's guide prior to accepting the first premium. • When the policy contains a Free Look Period, this guide can be delivered with the policy by the agent when the policy is delivered. Policy Summary A written statement describing the FEATURES AND ELEMENTS of the policy being issued. Summary Includes: • The name and address of the insurer • Generic name of the basic policy • List each rider • Include the premium amount, cash value, dividends, surrender values, death benefit figures for the specific policy years. • Policy summary must be provided when the policy is delivered. Advertising and Sales Requirements Advertising must be accurate.Must establish and maintain a system of control over the content, form and method of dissemination of all policies. INSURER IS RESPONISBLE FOR ALL ADVERTISING CONTENT. Solicitation of Insurance An attempt to persuade a person to buy an insurance policy whether written or spoken. INCLUDES: 1. Information about available products 2. Describing the policy benefits 3. Making recommendations about a specific policy 4. Trying to secure a contract between the applicant and the insurance company Policy Replacement An agent should know that with the purchase of proposed policy will replace and existing policy would have the Florida Replacement Rule apply. Florida Replacement Rule Requires that certain procedures are followed regarding the replacement of an existing contract for insurance. Requirements: 1. Agent the applicant a written comparison and summary at the request of the policyholder 2. Follow instructions regarding replacement as brained from the appointing Insurer. Replacement Means any transaction where a new life insurance contract replaces an existing one. Duties of Replacing Producer Duties Are: • Present to applicant a Notice Regarding Replacement that is signed by both the applicant and producer. • Copy must be left with applicant. • Obtain a list of all existing insurance contracts being replaced. • Obtain replaced contract policy numbers and the names of all companies • Leave the applicant with a soppy of written of printed communication used for presentation to the applicant. • Submit to the replacing insurance company a copy of replacement notice w/ the application. Replacing Producer Procedures Each Producer who initiates the application MUST SUBMIT THE FOLLOWING to the insurance company with our as part of each application: • A statement signed by the applicant whether a replacement of existing insurance may or may not be involved. • A signed statement whether the producer knows replacement is or is not involved in the transaction. Duties of Replacing Insurance Company • Require from the producers list of the applicants life insurance contracts to be replaced. • A copy of the replacement notice provided by the applicant. • Send each existing insurance company a written communication advising of proposed replacement within the specified time frame which starts at the time the application is received in the replacing insurers home or admin office. • A policy summary or ledger statement containing policy data on the prosper life insurance or annuity must be included. Free Look Period Allows insured a period of specified days from delivery date of the policy to look over the policy and if desired refuse and get a full refund. Florida Free Look Period is 14 days for Life Insurance and Annuity Policies. Grace Period Florida requires a 30 day grace period. Insurers may impose an interest rate charge not to exceed 8% per year for the # of days elapsing before the premium is paid. If a policy claim happens during a grace period, insurer may deduct the amount of the premium due and up to 8% interest per year from the settlement. Secondary Addressee Provision that protects the elderly insured. Coverage for persons age 64 and older that's been in force for at least 1 year cannot lapse for non-payment of premium after the grace period has passed without notifying the the policyowner and a specified secondary addressee of the impending lapse in coverage. Example: If the grace period is 51 days by day 21 the 2nd addressed must be notified. Non-Forfeiture Are the values of the benefits of a life insurance policy that the policyowner does not forfeit even if the policy lapses. All cash value life insurance policies issued in Florida must include non-forfeiture provisions. Non-Forfeiture Options Provisions must include: • In event of default, any premium payment for at least 1 year, a PAID-UP NON-FORFEITURE BENEFIT will become effective as specified in the policy unless otherwise indicated. The person entitled to it elects another option within 60 days after the due date of of the premium in default. • Upon policy surrender within 60 days after the due date of any premium payment in default (as long as the premium has been paid for at least 3 full years, in ordinary insurance, or 5 years in industrial, the insurer will pay, in lieu of any paid-up non-forfeiture benefit in CASH SURRENDER VALUE. • If the policy is paid-up or is continued under the paid-up non-forfeiture benefit, the insurer will pay a cash surrender amount if the policy is surrendered within 30 days after the policy anniversary. • A Mortality Table, interest rate and method used in calculating cash surrender values and the paid-up non-forfeiture benefits must be available under the policy. • A statement that the policy's cash surrender values and a paid0up Non-Forfeiture benefits meet the minimum alum benefit requirement for the state in which the policy is delivered. THE INSURER RESERVES THE RIGHT TO DEFER THE PAYMENT PF ANY CASH SURRENDER VALUE FOR A PERIOD OF 6 MONTHS AFTER DEMAND WITH SURRENDER OF THE POLICY.. Protection of Benefits from Creditors All individual life insurance policies must entitle the beneficiary all proceeds due under the policy. Regardless of any creditors claims against the insured. The cash surrender value of life insurance policies and annuities are not subject to: 1. Garnishment 2. attachment 3. Legal process in favor of the creditor HOWEVER, IF THE POLICY PROCEEDS ARE TO GO TO THE ESATET, THEY ARE SUBJECT TO CLAIMS OF THE INSURED CREDITORS. Designation of Beneficiaries Designation of Beneficiaries: • If a Former Spouse of the policy owner is designated as beneficiary, the designation will be void as of the legal dissolution of the marriage (divorce) poor declared invalid by court order if the designation was not made prior to divorce. • Life Agents cannot be designated as beneficiary accept in cases of family members. (Controlled business) Competent Parties In the state of Florida the minimum age to enter into a life insurance contract is 15 years old. Group Life Insurance Characteristics: • Is written as a master policy • Issued to the sponsoring organization • Covers the lives of more than 1 person • Participants receive a Certificate of Insurance from master policy • Amount of coverage is determined according to non-discriminatory rules. • Rate and coverage are based upon group underwriting w/ all individuals covered fro the same amount and rate • Cost of coverage paid by employer in excess of $50,000.00 is taxed to the employee. • Group must exist apart from the desire of obtaining insurance • Individual members covered under the group plan must have the right to convert their coverage to an individual policy without proof-of-insurability should they leave their group Group Plan Certificates of Insurance Must have the following information: • Group Policy Number • Description of insurance protection cardholder is entitled • Name of Insured, beneficiaries, and dependents, • The rights and conditions Eligible Groups Eligible Groups: • Employee Groups - includes retired employees • Debtor Groups ( policy can only be issued if the group of eligible debtors is receiving new entrants at the rate of at least 100 persons per year)] • Labor Union Groups - (eligible members must be all of the members of the Union) • Trustee Groups - (established by 2 or more employers in the same industry; by one or more in a Labor Union; or by one or more labor union and one or more employer.) • Association Groups - must be in existence for for at least 2 years and hold regularly meetings annually, and have at least 100 members. • Credit Union Groups (must be issued for the benefit of all eligible members of a credit union; the credit union is the policyholder) • Other group receiving special approval from the Department Conversion Priviledge Group plan participants can cancel their group coverage and must be allowed to convert their group plan to an individual plan without proof of insurability at a standard rate. Rates will be based on attained age, the face amount will be the same as group coverage but premium will be higher. Employee has 31 days to convert to Individual plan after termination of group plan. During the 31 days the employee is still covered under the group policy. Group Policies must have a provisions that if the group policy terminates insurance for any class of insured, everyone affected who's been insured for at least 5 years as of the date of termination is entitled to convert to an individual policy. Converting from Group to Individual Policy • The amount of individual's life insurance protection ceasing because of the termination, MINUS the amount of life insurance the insured becomes eligible under any group policy • $10,000.00 • If insured under group policy dies during the conversion period, death benefit the insured would've been entitled to under new policy will be paid by the Group Policy, whether or not the application for Ind. Plan or the first premium has been made. Coverage for Dependents Group Life insurance benefits may be extended to insure the employees spouse and dependent children. Amount of insurance cannot exceed amount of insurance for the insured employee. Assignment of Proceeds An insured under a group plan may make assignments of any or all of the incidents of ownership such as: 1. Assign all or part ownership 2. Exercise the Conversion Privilege 3. Have the right to name a beneficiary Annuity Suitability • Make sure the Annuity transactions address the the consumers needs and financial objectives • Ensure suitability by making reasonable effort to obtain relevant information from the consumer to evaluate the following factors: 1. Age 2. Annual income 3. Financial and tax status 4. Investment objectives 5. Intended use of annuity 6. Financial experience 7. Risk tolerance Senior Consumers Is a person over age of 65 Senior Consumers and Annuities • Recommendations must be reasonable under all circumstances known to the agent at that time • Unless the consumer refuses to disclose pertinent information • If senior consumer decides to enter an insurance transaction not based on the recommendation or if the consumer fails to provide complete or accurate information. • Annuity contracts issued to seniors may not contain a surrender or Deffered sales charge for the withdrawal of money from an annuity exceeding 10% of the amount withdrawn • Exchange or recommendation of purchase to seniors must have reasonable grounds proving the suitability for the consumer based on facts disclosed by the consumer about: 1. Investments 2. Other insurance products 3. Financial situation 4. And needs • Before executing a purchase the agent tour insurer must make a reasonable effort to obtain information concerning the seniors: 1. Financial status 2. Tax status 3. Investment objectives 4. Along with other information used or considered reasonless by agent or insurer • Insurer, agents, insurance agencies, and managing general agents must maintain records of the information collected from senior consumers and supporting information used for the recommendation for 5 years after the insurance transaction is completed by the insurer.