Florida Statutes 627.983 – General requirements
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No insurer shall participate in any consolidation unless it complies with the following requirements:
(1) The offer of new coverage shall be made on a timely basis as follows:
(a) In a consolidation conducted in connection with a loan transfer, the offer of new coverage to the prospective insured must be made as soon as reasonably possible. If the offer of new coverage is not made within 30 days after the loan transfer, or at least 30 days prior to the proposed effective date of the new coverage, the insurer shall notify the debtor, in writing, that she or he has the right to an unconditional refund of all premiums paid for the new coverage if she or he exercises that right, in writing, within 30 days after the date of the notification.
Terms Used In Florida Statutes 627.983
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Consolidation: means any transaction in which a financial institution or servicer makes its premium collection services available to its mortgage debtors in connection with a particular insurer's ("new insurer") offer of mortgage insurance, which offer is made to debtors who, immediately prior to the offer, had mortgage insurance with another insurer ("old insurer") and were paying premiums for that insurance with their monthly mortgage payments. See Florida Statutes 627.982
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Loan transfer: means a transaction in which the servicing of a block of mortgage loans is transferred from one servicer to another. See Florida Statutes 627.982
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage insurance: means life, accidental death, or disability insurance, or any combination thereof, designed to pay off all or a part of a mortgage loan in the event of the insured's death or disability. See Florida Statutes 627.982
- new plan: means the mortgage insurance coverage or mortgage insurance plan for which the financial institution collects premiums beginning on the effective date of consolidation. See Florida Statutes 627.982
- servicer: means any entity or organization that services mortgage loans by collecting and accounting for monthly mortgage payments. See Florida Statutes 627.982
- writing: includes handwriting, printing, typewriting, and all other methods and means of forming letters and characters upon paper, stone, wood, or other materials. See Florida Statutes 1.01
(b) In all other consolidations, the offer of new coverage shall be made to the prospective insured at least 30 days prior to the proposed effective date of the new coverage. If the offer is not made at least 30 days in advance, the insurer shall notify the debtor, in writing, that she or he has the right to an unconditional refund of all premiums paid for the new coverage provided she or he exercises that right, in writing, within 30 days from the date of the notification.
(2) A group certificate or individual policy shall be delivered to each debtor insured under the new plan. In addition to all other applicable requirements of the Florida Insurance Code, the group certificate or individual policy shall include the following information:
(a) The name or names of the single or joint insureds.
(b) Identification of the insured mortgage.
(c) The amount of insurance under the new plan.
(d) The premium for the new coverage.
(e) The effective date of the new coverage.
(f) The beneficiary for the new coverage.
(3) No group certificate or individual policy evidencing the new coverage shall include a contestability clause or, in the case of life insurance, a provision excluding suicide.
(4) All group life insurance certificates issued in connection with any consolidation shall include a conversion privilege permitting an insured to convert, without evidence of insurability, to an individual policy of decreasing term insurance within 30 days after the date the insured’s group coverage is terminated for any reason other than the nonpayment of premiums. The initial amount of coverage under the individual policy shall be an amount equal to the amount of coverage terminated under the group policy and shall decrease over a term that corresponds with the scheduled term of the insured’s mortgage loan. The premium for the individual policy shall be the same premium the insured was paying under the group policy.
(5) Except as provided in s. 627.984, the new coverage shall be effectuated for the prospective insured only after the new insurer receives an application which has been signed by the prospective insured.
(6) Except as provided in s. 627.984, the new insurer must calculate premiums for the new coverage on the basis of its own rates, the prospective insured’s then-attained age, if applicable, and the amount of insurance offered.
(7) Except for consolidations conducted in connection with a loan transfer, the new insurer shall send written notice to the old insurer of its intent to conduct a consolidation at least 30 days in advance of the effective date of the consolidation. Such notice may be made on behalf of the new insurer by the financial institution.
(8) Insurers shall maintain a list of certificateholders insured under each group mortgage insurance plan, which list shall be provided upon request to the servicer who collects premiums for the plan.