CS/HB 1205 Summary

• Defines "fraudulent viatical settlement act" as knowingly presenting false information or engaging in deceptive practices related to viatical settlement contracts and life insurance policies, with specific prohibited acts including fraud perpetuation, embezzlement, and policy transfers to avoid state provisions.

• Defines "stranger-originated life insurance practice" as initiating life insurance policies for third-party investors with no insurable interest, including using trusts to circumvent insurable interest laws.

• Extends voidability periods for viatical settlement contracts from 2 years to 5 years when policies are subject to secured loans, while allowing exceptions for documented medical conditions, charitable organizations, and policies issued before July 1, 2000.

• Creates new sections 626.99289 and 626.99290 declaring all contracts and arrangements related to stranger-originated life insurance practices void and unenforceable, and authorizing life insurers to contest policies obtained through such practices.

• Adds prohibited acts including facilitating viator residency changes, creating out-of-state trusts to avoid regulations, obtaining policy-secured loans, and promoting life insurance sales to third-party investors.