Fla. Admin. Code Ann. R. 69O-149.024 - Prohibited Policies

(1) Purpose. The purpose of this rule is to implement Section 627.479, F.S., which prohibits the issuance of certain policies in the State of Florida.

(2) Scope. This rule applies to all insurers and to any prohibited policy defined in this rule.

(3) Definitions. For purposes of this rule and Section 627.479, F.S., the following terms are defined:

(a) "Tontine policy or contract" refers to a financial arrangement in which a group of participants share advantages on such terms that upon the default or death of any participant, his advantages are distributed among the remaining participants until only one remains, whereupon the whole goes to him; or on the expiration of an agreed period, the whole goes to those participants remaining at that time. Under the "tontine" plan of insurance, no accumulation or earnings are credited to the policy unless it remains in force for the tontine period of a specified number of years. Thus those who survive the period and keep their policies in force share in the accumulated funds and those who die or permit their policies to lapse during period do not; neither do their beneficiaries participate in such accumulation.

(b) "Contingent endowment policy or contract" means a tontine type policy which provides a cash payment or other benefit convertible to cash, payable to the last surviving insured contingent upon the prior death of all other insureds who have been grouped together.

(c) "Coupon policy or contract" or "annual endowment policy or contract" refers to a specialty-type of life insurance with coupons or annual endowments attached to the policy. Each coupon or endowment is redeemable in cash at the end of the policy year. Generally premiums on these types of policies are higher than on standard life insurance policies in order to pay for the coupons. This definition does not include traditional annuity or life insurance contracts which pay benefits annually.

(d) "Pure endowment policy or contract" refers to an specialty-type policy which only pays a benefit if the designated person is living at the end of the specified period.

(e) "Joint and last survivorship option" is a policy option which provides for payment of the policy proceeds to two people. If either person dies, the same income payments continue to the survivor for life. When that survivor dies no further payments are made to anyone.

(4) Prohibition. Any person issuing a policy or contract described in this rule is acting as an insurer. Any licensed insurer issuing any policy defined or described in paragraphs (3)(a)-(d) of this rule, or any policy which meets the definitions of any of the above described policies by whatever name called shall have its certificate of authority revoked.

(5) Limitation.

(a) This rule shall not be construed to prohibit joint and last survivorship options or policies.

(b) This rule shall not be construed to limit the prohibitions specified in Section 627.479(1), F.S.

Notes

Fla. Admin. Code Ann. R. 69O-149.024

Rulemaking Authority 624.308, 627.479(2) FS. Law Implemented 627.479 FS.

New 1-19-94, Formerly 4-149.024.

New 1-19-94, Formerly 4-149.024.