Legislation Allows Sale, Service in Florida of Insurance by Foreign
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On May 27, 2005 Florida Governor Jeb Bush signed the International Insurance
Center Bill, Florida Statute 624.402. Effective July 1, 2005, this legislation
allows for the first time the sale and service in the State of Florida of
life insurance and annuities issued by non-U.S. insurance companies to non-U.S.
residents. The new law also facilitates the establishment of operations
in Florida by non-U.S. insurance companies to service this business.
|“Under the new law, foreign insurers
are eligible to offer their products to non-US residents without
obtaining a Certificate of Authority from the Office of Insurance
Under the new law, foreign insurers are eligible to offer their products
to non-US residents without obtaining a Certificate of Authority from the
Office of Insurance Regulation (“OIR”), provided certain statutory requirements
are met. (Generally, Section 624.401 Fla. Stat. prohibits insurance transactions
in Florida unless the insurer holds a Certificate of Authority issued from
the State.) The new law signed by Governor Bush specifically exempts foreign
based insurers offering life insurance and annuity products to non-residents
from the Certificate Requirement provided that such insurer maintains a
policy holder surplus of $15 million or more.
The foreign insurer must be currently authorized, and authorized for
the previous three years, in its country of domicile to offer the kind of
insurance it offers to non-residents of the United States. The OIR may waive
the three year requirement if the foreign insurer has operated successfully
for at least one year and has capital and surplus of at least $25 million.
The foreign insurer must provide OIR with authenticated copies of its current
financial statement, in English, with monetary values expressed in US Dollars,
based on current exchange rates.
The OIR is authorized by the new law to examine or investigate a foreign
insurer in the same manner as OIR would examine or investigate a domestic
insurer and to charge the foreign insurer for the cost of the examination
or investigation. The OIR may revoke the ability of the foreign insurer
to offer policies to non-residents of the United States if the investigation
warrants such action.
In addition to the policy surplus monetary requirements, the new law
requires that the foreign insurer must provide certain disclosures to each
applicant including the following:
- A copy of its most recent quarterly financial statement;
- The date the insurer was organized;
- The rating or non-rating of the company;
- A statement that the company does not hold a Certificate of Authority
from Florida and is not regulated by the OIR; and
- The identity and address of the regulatory authority exercising oversight
of the insurer
- There must be disclosed on the application and on the policy that
the policy is not governed by the laws of Florida and there needs to be
a statement that the Florida Life and Health Guarantee Association does
not cover such policies
Importantly, the new law does not exempt a foreign insurer from agent
licensure requirements in Florida, and it must use agents licensed to sell
such policies. In addition, the foreign insurer is also subject to the Florida
Unfair Insurance Trade Practice Act and the Florida Money Laundering Act
as to all single premium life insurance policies, and single annuity contracts,
issued to persons who are not residents of the United States. However, policies
written under the new statute are exempt from the premium tax required by
Fla. Stat. 624.509.
Greenberg Traurig has completed an in-depth analysis of the Bill, and
is coordinating with OIR regarding implementing regulations. Greenberg Traurig
is available to assist foreign insurers with the OIR exemption process and
required disclosure documentation procedures.
This Alert was written by
R. Paul Roecker and
Richard N. Bernstein. Please
contact Mr. Roecker at (407) 418-2368, Mr. Bernstein at (305) 579-0640,
or your Greenberg Traurig liaison if you have any questions regarding the
subject matter of this Alert.
© 2005 Greenberg Traurig
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This GT ALERT is issued for informational purposes only and is not intended
to be construed or used as general legal advice. Greenberg Traurig attorneys provide
practical, result-oriented strategies and solutions tailored to meet our clients’
individual legal needs.