The Florida legislature recently passed H.B. 1007, a comprehensive bill intended to combat insurance fraud. One important provision of the bill requires that insurance consumers be advised of their options before making changes to a life insurance policy. The new law now awaits the governor’s signature or, unless vetoed, automatically becomes law 15 days after it was sent to the governor’s desk.
Specifically, the bill requires life insurers to “provide an individual life insurance policyholder with a statement informing him or her that if he or she is considering making changes in the status of his or her policy, he or she should consult with a licensed insurance or financial advisor. The statement may accompany or be included in notices or mailings otherwise provided to the policyholder.” In addition, the “statement must also advise the policyholder that he or she may contact the department for more information and include a website address or other location or manner by which the policyholder may contact the department.”
Since a life settlement is an important option for consumers to be aware of before lapsing or surrendering a policy, the Life Insurance Settlement Association plans to work with the Florida Office of Insurance Regulation and the Department of Financial Services to develop additional resources for policyholders who are considering making changes to their policy, as well as helpful resources for insurance professionals and financial advisors.