Florida Life and Annuity Law for the 2-14
18% of the exam 2 min
The Florida rules behind the 15 life-and-annuity law questions on the 2-14: free look, grace and incontestability, the senior lapse notice, replacement, annuity best interest and surrender charges, group conversion, divorce and creditors.
Free look: 14 days for life, 21 for annuities
Florida gives the buyer of an individual life policy at least 14 days to return it for an unconditional refund, and the buyer of an annuity at least 21 days (s. 626.99(4), F.S.). National study material often says 10 days; on the Florida 2-14 that answer is wrong for both products.
Keeping a policy in force: grace, incontestability and the senior notice
Every premium after the first gets a grace period of at least 30 days, and the policy stays in force during it (s. 627.453, F.S.). Once a life policy has been in force during the insured's lifetime for 2 years from issue, the insurer can no longer contest it (s. 627.455, F.S.). For an insured 64 or older whose policy has been in force at least a year, the insurer must give at least 21 days' notice before a lapse to the owner, any secondary addressee the owner named, and the agent of record (s. 627.4555, F.S.).
Replacement: the forms do the work
When a new life policy will replace existing life insurance, the replacing insurer must get the completed Form OIR-B2-312 (Notice to Applicant Regarding Replacement) from the agent with the application, send a copy to the existing insurer as soon as it arrives, send Form OIR-B2-313 (Comparative Information) within 5 working days when asked, and keep the forms, sales proposals and a replacement register for at least 3 years (Rule 69O-151.007, F.A.C.). The old rules that put these duties on the agent, 69O-151.005 and 69O-151.006, were repealed effective January 4, 2024.
Annuities: best interest and surrender charges
An agent recommending an annuity must act in the consumer's best interest, which Florida breaks into four obligations: care, disclosure, conflict of interest and documentation (s. 627.4554(5)(a), F.S.). For a consumer 65 or older, a surrender charge may not exceed 10% of the amount withdrawn (s. 627.4554(9), F.S.). If an agent recommends surrendering an annuity without recommending a replacement, the client must first get written information on the estimated surrender charge, lost interest guarantees, possible taxes, the forfeited death benefit and other forfeited guarantees (s. 627.4553, F.S.).
Group conversion, divorce and creditors
A worker leaving a group life plan can convert to an individual policy without evidence of insurability by applying and paying the first premium within 31 days after eligibility ends (s. 627.566, F.S.). A beneficiary designation naming a former spouse becomes void when the marriage is dissolved, subject to the statute's exceptions (s. 732.703, F.S.). Life proceeds are generally exempt from the insured's creditors, and cash surrender values and annuity proceeds are exempt from legal process (ss. 222.13 and 222.14, F.S.).
Where people lose points
✗ "The free look is 10 days for every policy."
✓ In Florida it is 14 days for life and 21 days for annuities.
✗ "The agent is responsible for sending the replacement notice to the existing insurer."
✓ Since January 4, 2024, the replacing insurer sends it; the agent turns in Form OIR-B2-312 with the application.
✗ "Best interest is just suitability with a new name."
✓ Florida's rule has four separate obligations: care, disclosure, conflict of interest and documentation.
✗ "The senior lapse notice goes only to the policyowner."
✓ It also goes to any secondary addressee and to the agent of record.
Numbers to memorize
| Free look — individual life | Unconditional refund for at least 14 days (s. 626.99(4)(a), F.S.) |
| Free look — annuity | Unconditional refund for at least 21 days (s. 626.99(4)(b), F.S.) |
| Grace period — individual life | Not less than 30 days for any premium after the first; policy continues in force (s. 627.453, F.S.) |
| Incontestability — individual life | Incontestable after in force during the insured's lifetime for 2 years from date of issue (s. 627.455, F.S.) |
| Senior lapse secondary notice | Insured 64 or older and policy in force at least 1 year: at least 21 days notice before lapse to the policyowner, any designated secondary addressee and the agent of record (s. 627.4555, F.S.) |
| Replacement — forms | Form OIR-B2-312, Notice to Applicant Regarding Replacement of Life Insurance (rev. 07/23), and Form OIR-B2-313, Comparative Information Form (rev. 07/23), adopted by Rule 69O-151.010, F.A.C. |
| Replacement — duties of the replacing insurer | Require the completed Form OIR-B2-312 from the agent with the application; send a copy to the existing insurer immediately upon receipt at its home or regional office; send Form OIR-B2-313 within 5 working days when requested; retain forms, sales proposals and a cross-indexed replacement register at least 3 years (Rule 69O-151.007, F.A.C.) |
| Repealed replacement rules | 69O-151.005 (Duties of Agent) and 69O-151.006 (Duties of Replacing Agent) repealed effective January 4, 2024 |
| Annuity best interest standard | Obligations of care, disclosure, conflict of interest and documentation (s. 627.4554(5)(a), F.S.) |
| Annuity surrender charge — consumer 65 or older | May not exceed 10% of the amount withdrawn (s. 627.4554(9), F.S.) |
| Recommendation to surrender (no replacement recommended) | Before the surrender executes, give written information on estimated surrender charge, loss of minimum interest rate guarantees, possible tax consequences, forfeited death benefit and other forfeited performance guarantees; keep a copy and the date provided (s. 627.4553, F.S.) |
| Group life conversion | Apply and pay the first premium within 31 days after termination of eligibility, without evidence of insurability; the group policy may exclude the option to elect term insurance (s. 627.566, F.S.) |
| Effect of divorce on a beneficiary designation | A designation naming the decedent's former spouse is void as of the time the marriage was judicially dissolved or declared invalid, subject to statutory exceptions (s. 732.703, F.S.) |
| Life proceeds and cash values vs creditors | Proceeds are exempt from the claims of the insured's creditors unless the policy or a valid assignment provides otherwise; if payable to the insured or the insured's estate they become part of the estate (s. 222.13, F.S.). Cash surrender values of life policies and proceeds of annuity contracts are exempt from legal process (s. 222.14, F.S.) |
| HIV testing for insurance | Insurer must disclose its intent to test and obtain written informed consent; strict confidentiality of results; sexual orientation may not be used in underwriting or to determine who is tested (s. 627.429, F.S.) |
Test yourself
No answers here on purpose — retrieving them is the practice. Drill this domain if any of these stall you.
- How many days of free look does Florida give on a new individual life policy, and on an annuity?
- After how long can an insurer no longer contest a Florida life policy?
- Since January 2024, who sends the replacement notice to the existing insurer?
- What are the four obligations of Florida's annuity best-interest standard?
- What happens to a beneficiary designation naming a former spouse after a divorce?