The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Banking and Insurance
BILL: SB 312
INTRODUCER: Senator Collins
SUBJECT: Insurance
DATE: March 28, 2023
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Thomas Knudson BI Pre-meeting
2. JU
3. RC
I. Summary:
SB 312 provides that a life insurer, long-term care insurer, or a disability income insurer
authorized to do business in this state may use genetic information for underwriting purposes if
the genetic information is contained in the applicant’s medical record. The bill provides that such
insurer may not cancel coverage based on genetic information; may not require an applicant to
take a genetic test as a condition of insurability; and may not obtain, request, or otherwise require
the complete genome sequence of an applicant’s DNA.
The bill authorizes an insurer or an agent of the insurer to offer or provide value-added products
or services at no or reduced cost when such products or services are not specified in the
insurance policy. Such products or services must relate to the insurance coverage and be
primarily designed to do one or more of the following:
Provide loss mitigation or control;
Reduce claim or claim settlement costs;
Provide education about liability risks or risk of loss to people or property;
Monitor or assess risk, identify sources of risk, or develop strategies to eliminate or reduce
risk;
Enhance health;
Enhance financial wellness through items such as education or financial planning services;
Provide post-loss services;
Incentivize behavioral changes to improve the health, or reduce the risk of death or disability;
or
Assist in the administration of employee or retiree benefit insurance coverage.
The bill does not have a fiscal impact on state or local government.
The bill has an effective date of July 1, 2023.
REVISED: BILL: SB 312 Page 2
II. Present Situation:
Use of Genetic Information for Insurance Purposes – Florida Requirements
Section 627.4301, F.S., provides standards for the use of genetic information by certain insurers.
Health insurers, life insurers, and long-term care insurers are prohibited from requiring or
soliciting genetic information, using genetic test results, or considering a person’s decisions or
actions relating to genetic testing in any manner for any insurance purpose.
1
A life insurer or
long-term care insurer may consider a medical diagnosis that is already included in an
individual’s medical record.
2
Prior to 2020, only health insurers were expressly barred from
basing coverage decisions on genetic information.
3
That changed in 2020 when the Legislature
amended s. 627.4301, F.S., to include insurance policies for life, disability income, and long-
term care in the prohibition.
4
Section 627.4031(1)(a), F.S., defines “genetic information” to mean information derived from
genetic testing to determine the presence or absence of variations or mutations, including carrier
status, in an individual’s genetic material or genes that are:
Scientifically or medically believed to cause a disease disorder, or syndrome, or are
associated with a statistically increased risk of developing a disease; or
Associated with a statistically increased risk of developing a disease, disorder, or syndrome,
which is producing or showing no symptoms at the time of testing.
Genetic testing, for purposes of s. 627.4031, F.S., does not include routine physical examinations
or chemical, blood, or urine analysis, unless specifically conducted to obtain genetic information,
or questions regarding family history.
Prohibition of Unfair Discrimination Between Individuals
Insurance policy forms for insurance sold in Florida must be filed and approved by the Office of
Insurance Regulation (OIR).
5
The Unfair Insurance Trade Practices Act prohibits “[k]nowingly
making or permitting unfair discrimination between individuals of the same actuarially
supportable class and equal expectation of life, in the rates charged for a life insurance or annuity
contract, in the dividends or other benefits payable thereon, or in any other term or condition of
such contract.”
6
Similarly, the act prohibits “[k]nowingly making or permitting unfair
discrimination between individuals of the same actuarially supportable class, as determined at
the time of initial issuance of the coverage, and essentially the same hazard, in the amount of
premium, policy fees, or rates charged for a policy or contract of accident, disability, or health
insurance, in the benefits payable thereunder, in the terms or conditions of such contract, or in
any other manner.”
7
1
Section 627.4301(2)(a), F.S.
2
Section 627.4301(2)(d), F.S.
3
Section 627.4301(2)(c), F.S. (2020).
4
Section 1, ch. 2020-159, L.O.F. Other types of insurance that are wholly exempt from the statute are accident-only policies,
hospital indemnity or fixed indemnity policies, dental policies, and vision policies.
5
Section 627.410, F.S.
6
Section 626.9541(1)(g)1., F.S.
7
Section 626.9541(1)(g)2., F.S. BILL: SB 312 Page 3
Genetic Testing – Informed Consent and Privacy Requirements
Section 760.40(2), F.S., provides that the results of DNA analysis are the exclusive property of
the person tested. Accordingly, DNA analysis may be performed only with the “express consent”
of the person to be tested.
8
The results of DNA analysis, whether held by a public or private
entity, are confidential, and may not be disclosed without the consent of the person tested. DNA
analysis held by a public entity must be held confidential and exempt from public disclosure.
DNA analysis, for purposes of the statute, is the medical and biological examination and analysis
of a person to identify the presence and composition of genes in that person’s body, and includes
DNA typing and genetic testing.
The law also requires any person who performs DNA analysis or receives records, results, or
findings of DNA analysis to provide the person tested with notice that the analysis was
performed or the information was received. The notice must state that, upon the request of the
person tested, the information will be made available to his or her physician. Further, the notice
must state whether the information was used in any decision to grant or deny any insurance,
employment, mortgage, loan, credit, or educational opportunity. If such information was used in
a denial of the foregoing, the analysis must be repeated to verify the accuracy of the first
analysis, and if the first analysis is found to be inaccurate, the denial must be reviewed.
Federal Laws on the Use of Genetic Information for Insurance Purposes
Federal law generally prohibits health insurers from soliciting genetic information and using
such information for underwriting purposes. Federal law does not apply these prohibitions to life
insurance, disability insurance, or long-term care insurance.
Genetic Information Nondiscrimination Act of 2008
The Genetic Information Nondiscrimination Act of 2008 (GINA) amended a number of existing
federal laws to prohibit health insurers from using genetic information for underwriting
purposes.
9
The act does not apply to life insurance, long-term care insurance, or disability
insurance. Title I of GINA provides protections against discrimination by health insurers on the
basis of genetic information.
10
GINA prohibits health insurers and health plan administrators
from using genetic information to make rating or coverage decisions.
11
These decisions include
eligibility for coverage and setting premium or contribution amounts.
GINA generally prohibits health insurers and health plan administrators from requesting or
requiring genetic information of an individual or the individual’s family members,
12
nor may
8
“‘Express consent’” means authorization by the person whose DNA is to be extracted or analyzed, or such person’s legal
guardian or authorized representative…” Section 760.40(1)(d), F.S.
9
Pub. Law No. 110-233, s. 122 Stat. 881-921 (2008), https://www.gpo.gov/fdsys/pkg/PLAW-110publ233/pdf/PLAW-
110publ233.pdf (last accessed March 24, 2023).
10
110
th
Congress, Summary: H.R.493 Public Law (May 21, 2008), https://www.congress.gov/bill/110th-congress/house-
bill/493 (last accessed March 24, 2023).
11
See 29 USC 1182; 42 USC 300gg-1; and 42 USC 300gg-53.
12
Department of Health and Human Services, “GINA” The Genetic Information Nondiscrimination Act of 2008: Information
for Researchers and Health Care Professionals, (April 6, 2009).
https://www.genome.gov/Pages/PolicyEthics/GeneticDiscrimination/GINAInfoDoc.pdf (last accessed March 24, 2023). BILL: SB 312 Page 4
such information be requested, required or purchased for underwriting purposes.
13
Underwriting
purposes include rules for eligibility, determining coverage or benefits, cost-sharing
mechanisms, calculating premiums or contribution amounts, rebates, payments in kind, pre-
existing condition exclusions, and other activities related to the creation, renewal, or replacement
of health insurance or health benefits. Underwriting purposes does not include determining
medical appropriateness where an individual seeks a health benefit under a plan, coverage, or
policy.
14
Genetic information may be used by an insurer to make a determination regarding the
payment of benefits, for example, as the basis of a diagnosis that then would lead to benefits
being provided under the insurance policy.
The protections in GINA apply to the individual and group health markets, including employer
sponsored plans under the Employee Retirement Income Security Act of 1974 (ERISA).
15
GINA
generally expanded many of the genetic information protections in the Health Insurance
Portability and Accountability Act of 1996
16
(HIPAA) and applied them to the individual, group
and Medicare supplemental marketplaces.
17
The protections enacted in GINA do not apply to
Medicare or Medicaid because both programs bar the use of genetic information as a condition
of eligibility.
18
GINA also prohibits employment discrimination on the basis of genetic
information.
19
States may provide stronger protections than GINA, which provides a baseline level of
protection against prohibited discrimination on the basis of genetic information.
Health Insurance Portability and Accountability Act of 1996
HIPAA establishes national standards to ensure the privacy and nondisclosure of personal health
information. The rule applies to “covered entities” which means a health plan, health care
clearinghouse, other health care providers, and their business associates.
20
HIPAA provides
standards for the use and disclosure of protected health information and generally prohibits
covered entities and their business associates from disclosing protected health information,
except as otherwise permitted or required.
21
Covered entities generally may not sell protected
health information.
22
HIPPA, as modified by GINA, also prohibits health plans from using or
disclosing protected health information that is genetic information for underwriting purposes.
23
13
See 29 USC 1182(d); 42 USC 300gg-4(d); and 42 USC 300gg-53(e).
14
See 45 CFR 164.502(a)(5)(i)(4)(B).
15
Perry W. Payne, Jr. et al, Health Insurance and the Genetic Information Nondiscrimination Act of 2008: Implications for
Public Health Policy and Practice, Public Health Rep., Vol. 124 (March-April 2009), 328, 331.
16
Codified 42 USC 300gg, 29 USC 1181 et seq., and 42 USC 1320d et seq.
17
See Payne fn. 15 at pg. 329.
18
See id.
19
See 29 CFR 1635(a), which prohibits the use of genetic information in employment decision making; restricts employers
and other entities from requesting, requiring, or purchasing genetic information; requires that genetic information be
maintained as a confidential medical record, and places strict limits on disclosure of genetic information; and provides
remedies for individuals whose genetic information is acquired, used, or disclosed in violation of GINA.
20
See 45 CFR 160.103.
21
See 45 CFR 164.502(a).
22
See 45 CFR 164.502(a)(5)(ii)(A).
23
See 45 CFR 164.502(a)(5)(i). BILL: SB 312 Page 5
Patient Protection and Affordable Care Act of 2010
The Patient Protection and Affordable Care Act of 2010 (ACA) requires all individual and group
health plans to enroll applicants regardless of their health status, age, gender, or other factors that
might predict the use of health services.
24
These guaranteed issue and guaranteed renewability
requirements apply to genetic testing.
Use of Genetic Information for Insurance Purposes – Requirements in Other States and
Canada
Federal law under GINA applies to all states and provides a baseline level of protection that
states may exceed. The NIH has identified 106 state statutes addressing health insurance
nondiscrimination across 48 states and the District of Columbia.
25
Fewer states address genetic
testing regarding other lines of insurance such as life insurance, disability insurance, and long-
term care insurance.
26
Examples of such statutes include Oregon, which requires informed consent to conduct testing,
prohibits the use of genetic information for underwriting or ratemaking for any policy for
hospital and medical expense, and prohibits using the genetic information of a blood relative for
underwriting purposes regarding any insurance policy.
27
Informed consent when an insurer
requests genetic testing for life or disability insurance is required in California, New Jersey, and
New York.
28
Massachusetts prohibits unfair discrimination based on genetic information or a
genetic test and prohibits requiring an applicant or existing policyholder to undergo genetic
testing.
29
Arizona prohibits the use of genetic information for underwriting or rating disability
insurance in the absence of a diagnosis, and life and disability insurance policies may not use
genetic information for underwriting or ratemaking unless supported by the applicant’s medical
condition, medical history, and either claims experience or actuarial projections.
30
Canadian Genetic Non-Discrimination Act
In 2017, the Canadian Parliament passed a Genetic Non-Discrimination Act
31
(Canadian Act).
The Canadian Act prohibits requiring an individual to undergo a genetic test, or disclose the
results of a genetic test, as a condition of providing goods or services to that individual, entering
into or continuing a contract or agreement with that individual, or offering or continuing specific
terms or conditions in a contract or agreement with that individual. Thus, an insurer could not
require an applicant provide genetic testing results. The Canadian Act also requires an
individual’s written consent prior to using or disclosing the results of a genetic test. The
24
See 42 USC 300gg-1 and 42 USC 300gg-2.
25
National Institutes of Health, Genome Statute and Legislation Database Search.
https://www.genome.gov/sites/default/files/media/files/2020-01/table_state_statutes_genomics_2.pdf (last visited on March
24, 2023).
26
See id. (database search for “other lines of insurance” and “nondiscrimination” performed by Committee on Banking and
Insurance professional staff on March 24, 2023).
27
Section 746.135, O.R.S.
28
See Cal. Ins. Code s. 10146 et seq.; s. 17B:30-12, N.J.S.; and ISC s. 2615, N.Y.C.L.
29
Chapter 175 sections 108I and 120E, M.G.L.
30
Section 20-448, A.R.S.
31
Statutes of Canada 2017, c. 3. https://laws-lois.justice.gc.ca/eng/acts/G-2.5/page-1.html#h-1 (last accessed March 24,
2023). BILL: SB 312 Page 6
Canadian Act exempts physicians and other health care practitioners in respect to an individual
to whom they are providing health services and persons conducting medical, pharmaceutical, or
scientific research in respect of an individual who is a participant in the research. Violations of
the act are punishable under the criminal law.
Genetic Testing
Genetic testing includes a number of medical tests that identify and examine chromosomes,
genes, or proteins for the purpose of obtaining genetic information.
32
Genetic testing is often
used for medical or genealogical purposes.
Medical Genetic Testing
Genetic testing can be done to diagnose a genetic disorder, to predict the possibility of future
illness, and predict a patient’s response to therapy.
33
More than 2,000 genetic tests are currently
available and more tests are constantly being developed.
34
The National Institutes of Health
35
(NIH) have identified the following available types of medical genetic testing:
36
Diagnostic testing identifies or rules out a specific genetic or chromosomal condition, and is
often used to confirm a diagnosis when a particular condition is suspected based on the
individual’s symptoms. For example, a person experiencing abnormal muscle weakness may
undergo diagnostic testing that screens for various muscular dystrophies.
Predictive and pre-symptomatic testing is used to detect gene mutations associated with
disorders that appear after birth, often later in life. This testing is often used by people who
are asymptomatic, but have a family member with a genetic disorder. Predictive testing can
identify mutations that will result in a genetic disorder, or that increase a person’s risk of
developing disorders with a genetic basis, such as cancer.
Carrier testing identifies people who carry one copy of a gene mutation that, when present in
two copies, causes a genetic disorder. This test is often used by parents to determine their risk
of having a child with a genetic disorder.
Preimplantation testing is used to detect genetic changes in embryos developed by assisted
reproductive techniques such as in-vitro fertilization. Small numbers of cells are taken from
the embryos and tested for genetic changes prior to implantation of a fertilized egg.
Prenatal testing detects changes in a baby’s genes or chromosomes before birth. Such testing
is often offered if there is an increased risk the baby will have a genetic or chromosomal
disorder.
Newborn screening is performed shortly after birth to identify genetic disorders that can be
treated early in life. Florida screens for more than 55 conditions, including those
32
Genetic Testing FAQ, National Human Genome Research Institute https://www.genome.gov/FAQ/Genetic-Testing (last
accessed March 24, 2023).
33
Francis S. Collins, A Brief Primer on Genetic Testing (January 24, 2003). https://www.genome.gov/10506784/a-brief-
primer-on-genetic-testing/ (last accessed March 24, 2023).
34
See Ohio State University Wexner Medical Center, Facts About Testing. https://wexnermedical.osu.edu/genetics/facts-
about-testing (last accessed March 24, 2023).
35
The National Institutes of Health is the medical research agency of the United States federal government. The NIH is part
of the United States Department of Health and Human Services. The NIH is made of 27 different Institutes and Centers, each
having a specific research agenda.
36
See National Institutes of Health, fn. 25, at pgs. 5-6. BILL: SB 312 Page 7
recommended by the United States Department of Health and Human Services
Recommended Uniform Screening Panel, unless a parent objects in writing.
37
Genetic testing is often used for research purposes. For example, genetic testing may be used to
discover genes or increase understanding of genes that are newly discovered or not well
understood.
38
Testing results as part of a research study are usually not available to patients or
health care providers.
39
The Human Genome Project, which in April 2003, successfully sequenced and mapped all of the
genes of humans, and a variety of other genetic testing, has led to multiple medical advances. For
example, genetic testing identified that the reason the drug Plavix, which is commonly used to
prevent blood clots in patients at risk for heart attacks and strokes, does not work for
approximately 30 percent of the United States population because variations in the CYP2C19
gene account for the lack of a response.
40
Thus, genetic testing can identify persons for whom the
drug will not be effective.
The American Medical Association supports broad protections against genetic discrimination
because it believes genetic testing and genetic information is essential to advancements in
medical knowledge and care.
41
Accordingly, the organization supports comprehensive federal
protection against genetic discrimination because “patients remain at-risk of discrimination in a
broad array of areas such as life, long-term care, and disability insurance as well as housing,
education, public accommodations, mortgage lending, and elections.”
42
Methods of genetic testing used for medical purposes include:
Molecular genetic tests (Gene tests) that study single genes or short lengths of DNA to
identify variations or mutations that lead to a genetic disorder.
Chromosomal genetic tests that analyze whole chromosomes or long lengths of DNA to see
if there are large genetic changes, such as an extra copy of a chromosome, that cause a
genetic condition.
Biochemical genetic tests that study the amount or activity level of proteins; abnormalities in
either can indicate changes to the DNA that result in a genetic disorder.
Genetic Ancestry Testing
Genetic ancestry testing, also called genetic genealogy, is used to identify relationships between
families and identify patterns of genetic variation that are often shared among people of
37
Florida Department of Health, Newborn Screening. https://floridanewbornscreening.com (last accessed March 24, 2023).
38
See Ohio State University Wexner Medical Center, fn. 34.
39
See Genetic Testing FAQ, fn. 32.
40
Francis S. Collins, Perspectives on the Human Genome Project, pg. 50 (June 7, 2010).
https://www.genome.gov/Pages/Newsroom/Webcasts/2010ScienceReportersWorkshop/Collins_NHGRIsciencewriters06071
0.pdf (last accessed March 24, 2023).
41
American Medical Association, Genetic Discrimination – Appendix II. AMA Legislative Principles on Genetic
Discrimination and Surreptitious Testing, (March 2013) https://www.ama-assn.org/sites/default/files/media-
browser/public/genetic-discrimination-policy-paper.pdf (last accessed March 24, 2023).
42
Id. p. 6. BILL: SB 312 Page 8
particular backgrounds.
43
According to the NIH, genetic ancestry testing results may differ
between providers because they compare genetic information to different databases. The tests
can yield unexpected results because human populations migrate and mix with other nearby
groups. Scientists can use large numbers of genetic ancestry test results to explore the history of
populations. Three common types of genetic ancestry testing include:
44
Single nucleotide polymorphism testing to evaluate large numbers of variations across a
person’s entire genome. The results are compared with those of others who have taken the
tests to provide an estimate of a person’s ethnic background.
Mitochondrial DNA testing to identify genetic variations in mitochondrial DNA, which
provides information about the direct female ancestral lines.
Y chromosome testing, performed exclusively on males, often used to investigate whether
two families with the same surname are related.
Direct to Consumer Genetic Testing
Traditionally, genetic testing was available only through health care providers. Direct-to-
consumer genetic testing provides access to genetic testing outside the health care context.
Generally, the consumer purchases a genetic testing kit from a vendor that mails the kit to the
consumer. The consumer collects a DNA sample and mails it back to the vendor. The vendor
uses a laboratory to conduct the test. The consumer is then notified of the test results.
Direct-to-consumer genetic testing has primarily been used for genealogical purposes, but
increasing numbers of products now provide medical information. For example, the vendor
23andME offers, with FDA approval, genetic testing that examines the consumer’s risks for
certain diseases including Parkinson’s disease, celiac disease, and late-onset Alzheimer’s
disease.
45
Direct to consumer genetic testing is increasing in popularity, with an estimated 100 million
individuals expected to have undergone the testing by the end of 2021.
46
The increased
proliferation of such testing is accompanied by increased concerns about the privacy of such
information. The privacy protections of HIPAA usually do not apply to direct-to-consumer
genetic testing because the vendors selling such tests are often not “covered entities” and thus
not subject to HIPAA. The Federal Trade Commission has warned consumers to consider the
privacy implications of genetic testing kits.
47
43
Genetic Ancestry Testing What Is It and Why Is It Important?, National Institutes of Health,
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8202415/ (last accessed March 24, 2023).
44
Id.
45
23andMe, https://www.23andme.com (last accessed March 24, 2023).
46
Protect sensitive individual data at risk from DTC genetic tests, American Medical Association, Nov. 6, 2021,
https://www.ama-assn.org/delivering-care/patient-support-advocacy/protect-sensitive-individual-data-risk-dtc-genetic-
tests#:~:text=Use%20of%20direct%2Dto%2Dconsumer,November%202021%20AMA%20Special%20Meeting (last
accessed March 24, 2023).
47
Federal Trade Commission, DNA Test Kits: Consider the Privacy Implications, https://www.unionplus.org/blog/consumer-
tips/dna-test-kits-consider-privacy-implications (last accessed March 24, 2023). BILL: SB 312 Page 9
Direct-to-consumer genetic testing is being used by law enforcement agencies to identify
suspects in crimes.
48
To do so, law enforcement agencies test crime scene DNA samples for
DNA markers that in many cases are shared with blood relatives. The DNA markers can then be
uploaded to a free online database, GEDmatch, which is used by the public to search for
relatives. The DNA database identifies relatives that match the DNA markers, information which
can then be used to focus on an individual suspect.
Concerns Over Direct-to-Consumer Genetic Testing Privacy and Fraud
The use of genetic information to identify other family members has public policy implications
that are not limited to criminal law. A 2018 study estimated that a genetic database would need
to cover only 2 percent of the target population to provide a third-cousin match to nearly any
person.
49
The authors of the study noted that genetic information and the use of genetic databases
that are publicly available could be used for harmful purposes, such as re-identifying research
subjects from their genetic data.
Chief Financial Officer Jimmy Patronis issued a consumer alert on August 15, 2019, warning
Floridians of genetic testing scams that purport to offer free genetic testing to Medicare
beneficiaries, but are actually attempts to obtain personal information for identity theft or
Medicare information for fraudulent billing purposes.
50
The consumer alert noted that the Better
Business Bureau had started receiving reports of the genetic testing scams, which occurred
through telemarketing calls, booths at public events, health fairs, and door-to-door visits.
51
A Department of Defense memorandum issued December 20, 2019, advised military personnel
to refrain from the purchase or use of direct-to-consumer genetic testing. The department noted
that direct-to-consumer genetic tests “are largely unregulated and could expose personal and
genetic information, and potentially create unintended security consequences and increased risk
to the joint force and mission.”
52
The memorandum stated that many direct-to-consumer genetic
tests that provide health information vary in their validity and are not reviewed by the Food and
Drug Administration, and thus are not independently reviewed to verify the claims of the seller.
53
The memorandum also noted that “there is increased concern in the scientific community that
48
Jocelyn Kaiser, We Will Find You: DNA Search Used to Nab Golden State Killer Can Home In On About 60% of White
Americans, Science (October 11, 2018) https://www.sciencemag.org/news/2018/10/we-will-find-you-dna-search-used-nab-
golden-state-killer-can-home-about-60-white (last accessed March 24, 2023).
49
Yaniv Erlich et al., Identify Inference of Genomic Data Using Long-Range Familial Searches, Science Vol. 362, Issues
6415, Pgs. 690-694 (November 9, 2018) https://science.sciencemag.org/content/362/6415/690/tab-pdf (last accessed March
24, 2023).
50
Florida Department of Financial Services, Consumer Alert CFO Jimmy Patronis: Beware of Door to Door Genetic Testing
Scams Targeting Seniors, (August 15, 2019) https://myfloridacfo.com/news/newsletter/archive/news-
details/2022/09/22/consumer-alert-cfo-jimmy-patronis-beware-of-door-to-door-genetic-testing-scams-targeting-seniors (last
accessed March 24, 2023).
51
Better Business Bureau, BBB Warning: Beware of Genetic Testing Scam Hitting Florida, (August 2, 2019).
https://www.bbb.org/article/news-releases/20457-bbb-warning-beware-of-genetic-testing-scam-hitting-florida (last accessed
March 24, 2023).
52
Department of Defense, Memorandum on Direct-to-Consumer Genetic Testing Advisory for Military Members, (Dec 20,
2019) https://www.scribd.com/document/440727436/DOD-memo-on-DNA-testing#download&from_embed (last accessed
March 24, 2023).
53
See id. BILL: SB 312 Page 10
outside parties are exploiting the use of genetic data for questionable purposes, including mass
surveillance and the ability to track individuals without their authorization or awareness.”
54
Life Insurance, Disability Insurance, and Long-Term Care Insurance
Forms of Life Insurance
Life insurance is the insurance of human lives.
55
Life insurance can be purchased in the
following forms:
56
Term life insurance provides coverage for a set term of years and pays a death benefit if the
insured dies during the term.
57
Permanent life insurance remains in place if the insured pays premiums, and the coverage
pays a death benefit. Such policies have an actual cash value component that increases over
time and from which the policy owner may borrow. There are four types of permanent life
insurance:
o Whole life insurance offers a fixed premium, guaranteed annual cash value growth and a
guaranteed death benefit. It does not provide investment flexibility and the policy
coverage, once established, may not be changed.
o Universal life insurance allows the policyholder to determine the amount and timing of
premium payments within certain limits. The coverage level may be adjusted. It
guarantees certain levels of annual cash value growth but not investment flexibility.
o Variable life insurance allows allocation of investment funds, but does not guarantee
minimum cash value because of fluctuations in the value of investments.
o Variable universal life insurance combines variable and universal life insurance.
58
Life Insurance Underwriting and Risk Classification
Life insurance underwriters seek to identify and classify the risk represented by a proposed
insured and then classify those risks into pools of similar mortality or morbidity risk. Mortality
risk is the risk of death whereas morbidity risk is the risk of being unhealthy or having a disease.
Insureds within the same risk classification pay the same premiums, which must be adequate to
ensure solvency, pay claims, and provide the insurer (with investment income) a reasonable rate
of return. Accurate risk assessment is important in life insurance because misclassification of risk
results in severe consequences because the life insurance contract is often in place for long
periods of time, as in the case of long-term and whole life policies.
59
A 2019 paper in the Journal of Insurance Regulation of the National Association of Insurance
Commissioners noted that more than 5,000 genes have been identified as relating to a particular
54
See id.
55
Section 624.602, F.S.
56
National Association of Insurance Commissioners, Life Insurance – Considerations for All Life Situations,
http://www.insureuonline.org/insureu_type_life.htm (last accessed March 24, 2023).
57
National Association of Insurance Commissioners, Life Insurance FAQs,
http://www.insureuonline.org/consumer_life_faqs.htm (last accessed March 24, 2023).
58
See “What are the different types of permanent life insurance policies?” available at https://www.iii.org/article/what-are-
different-types-permanent-life-insurance-policies (last accessed March 24, 2023).
59
Patricia Born, Genetic Testing in Underwriting: Implications for Life Insurance Markets, Journal of Insurance Regulation
Vol. 38, No. 5 (2019), https://content.naic.org/sites/default/files/jir-za-38-05-el-genetic-testing-underwriting.pdf (last
accessed March 24, 2023). BILL: SB 312 Page 11
disease, many of which have predictive value in estimating the probability in developing a
genetic disease that has consequences for mortality.
60
Examples of genetic tests with
informational value for life insurance underwriting include:
Breast cancer – BRCA1 or BRCA 2;
Hypertrophic cardiomyopathy;
Dilated cardiomyopathy;
Arrhythmogenic right ventricular cardiomyopathy;
Long QT syndrome;
Brugada syndrome;
Huntington’s disease;
Polycystic kidney disease;
Myotonic muscular dystrophy – DM1 or DM2;
Alzheimer’s disease early onset, autosomal dominance;
Hereditary nonpolyposis colorectal cancer;
Marfan Syndrome; and
Catecholaminergic polymorphic ventricular tachycardia.
When a policyholder has access to information about their mortality risk which the life insurer
lacks, two problems arise for the life insurer. The first problem is that the policy may be
underpriced, which can result in inadequate premium dollars to pay death benefits.
61
The second
problem is that consumers with knowledge of their increased mortality risk will be more likely to
keep their policy in-force, which also has an impact on proper pricing of life insurance as
premiums are calculated using assumptions that a certain percentage of policyholders will allow
the insurance contract to lapse.
62
The American Council of Life Insurers has expressed concerns that the proliferation of genetic
testing could increase adverse selection and impact the availability and affordability of products
over time.
63
Studies addressing whether genetic testing leads to adverse selection have reached
varying conclusions. Studies of women tested for the BRCA1 gene mutation (linked to breast
cancer risk)
64
and adults tested for Alzheimer’s risk
65
found little evidence of adverse selection in
the life insurance market. However, the study regarding Alzheimer’s risk found evidence of
adverse selection for long-term care insurance, as 17 percent of those who tested positive
subsequently changed their LTC policy in the year after testing positive of Alzheimer’s risk, in
comparison with 2 percent of those who tested negative and 4 percent of those who did not
receive test results.
66
60
See Born fn. 59 at pg. 5.
61
See Born fn. 59 at pg. 10.
62
See id.
63
Gina Kolata, New Gene Tests Pose a Threat to Insurers, New York Times (May 12, 2017),
https://www.nytimes.com/2017/05/12/health/new-gene-tests-pose-a-threat-to-insurers.html (last accessed March 24, 2023).
64
Cathleen D. Zick, et. al., Genetic Testing, Adverse Selection, and the Demand for Life Insurance, pgs. 29-39 American
Journal of Medical Genetics (July 2000) (Abstract provided by NIH at https://www.ncbi.nlm.nih.gov/pubmed/10861679 (last
accessed March 24, 2023)).
65
Cathleen D. Zick, Genetic Testing For Alzheimer’s Disease And Its Impact on Insurance Purchasing Behavior, pgs. 483-
490, Health Affairs vol. 23, no. 2 (March/April 2005), https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.24.2.483 (last
accessed March 24, 2023).
66
See Zick fn. 65 at pgs. 487-488. BILL: SB 312 Page 12
Annuities
Life insurance also encompasses annuities and disability policies.
67
An annuity is a contract
between a customer and an insurer wherein the customer makes a lump-sum payment or a series
of payments to an insurer that in return agrees to make periodic payments to the annuitant at a
future date, either for the annuitant’s life or a specified period. Disability insurance pays a
weekly or monthly income for a set period if the insured becomes disabled and cannot continue
working or obtain work.
Disability Insurance
Disability insurance compensates the insured for a portion of income lost because of a disabling
injury or illness.
68
There are two types of disability insurance: short-term and long-term. A short-
term policy typically replaces a portion of lost income from 3 to 6 months following the
disability. Long-term policies generally begin 6 months after the disability and can last a set
number of years or until retirement age. Disability insurance is sometimes offered by life
insurers.
Long-Term Care Insurance
Long-term care (LTC) insurance covers the costs of nursing homes, assisted living, home health
care, and other long-term care services. A long-term care insurance policy provides coverage for
medically necessary diagnostic, preventive, therapeutic, curing, treating, mitigating,
rehabilitative, maintenance or personal care services provided in a setting other than an acute
care unit of a hospital.
69
Long-term care insurance usually pays fixed-dollar amounts or the
actual costs of care, often subject to a maximum daily benefit amount.
70
The LTC insurance market provides an example of the negative effects of insurers not accurately
projecting their underwriting risk. LTC insurers made incorrect assumptions when selling the
coverage, particularly in the 1980s and 1990s.
71
The LTC insurers overestimated the number of
people that would cancel their coverage or allow it to lapse, underestimated the life span of
insureds and the time span of the treatment they would receive, and overestimated earnings on
67
Section 624.602, F.S.
68
See Disability insurance: What is it and how does it work?, Insurance Business America
https://www.insurancebusinessmag.com/us/guides/disability-insurance-what-is-it-and-how-does-it-work-435262.aspx (last
accessed March 24, 2023).
69
Section 627.9404(1), F.S.
70
Florida Department of Financial Services, Long-Term Care: A Guide for Consumers, pg. 5.
https://www.myfloridacfo.com/docs-sf/consumer-services-libraries/consumerservices-documents/understanding-
coverage/consumer-guides/long-term-care-insurance-guide.pdf?sfvrsn=c2a6cc2c_2 (last accessed March 24, 2023).
71
See Leslie Scism, Millions Bought Insurance to Cover Retirement Health Costs. Now They Face an Awful Choice, Wall
Street Journal (January 17, 2018), https://www.wsj.com/articles/millions-bought-insurance-to-cover-retirement-health-costs-
now-they-face-an-awful-choice-1516206708 (last accessed March 24, 2023). BILL: SB 312 Page 13
LTC premiums which were negatively affected by dropping interest rates.
72
As a result, long-
term care insurance premiums have been rising, often substantially, for the past decade.
73
In response to substantial LTC premium increases, Florida law prohibits LTC rate increases that
would result in a premium in excess of that charged on a newly issued policy, except to reflect
benefit differences.
74
If the insurer is not writing new LTC policies, the rate cannot exceed the
new business rate of insurers representing 80 percent of the carriers in the marketplace. In
January 2017, the OIR issued consent orders allowing two of the state’s largest LTC insurers,
Metropolitan Life Insurance Company and Unum Life Insurance Company of America, to
substantially raise LTC monthly premiums, phased in over 3 years.
75
Many insurers that write
LTC insurance have taken substantial losses. In January 2018, General Electric announced a
$6.2 billion charge against earnings and a $15 billion shortfall in insurance reserves related to
LTC insurance obligations.
76
Unfair Insurance Trade Practices
The Unfair Insurance Trade Practices Act,
77
among other things, defines unfair methods of
competition and unfair or deceptive acts in the business of insurance and prohibits unfair
methods of competition and unfair or deceptive acts in the business of insurance.
78
It provides an
extensive list of prohibited methods and acts. Among these are prohibitions on certain
inducements to the purchase of insurance, including rebates, dividends, stock, and contracts that
promise to return profits to the prospective insurance purchaser. The law also describes
prohibited discrimination.
There are also many exceptions to the prohibitions defined by law. Among the exceptions is
authorization for insurers and their agents to offer and make gifts of charitable contributions,
merchandise, goods, wares, store gift cards, gift certificates, event tickets, anti-fraud or loss
mitigation services, and other items up to $100 per calendar year to an insured, prospective
insured, or any person for the purpose of advertising.
79
Insurers are allowed to offer and give
72
See Office of Insurance Regulation, Long-Term Care Public Rate Hearings. (The Internet page references a rate filing
decision made by the OIR on Jan. 12, 2017, related to LTC products for two insurers),
https://www.floir.com/Sections/LandH/LongTermCareHearing.aspx (last accessed March 24, 2023); See Scism at fn. 71.
73
See Scism at fn. 71; See Office of Insurance Regulation at fn. 72.
https://www.floir.com/Sections/LandH/LongTermCareHearing.aspx (last accessed March 24, 2023).
74
Section 627.9407(7)(c), F.S.
75
See Office of Insurance Regulation, Consent Order In the Matter of: Metropolitan Life Insurance Company, Case No.
200646-16-CO (Jan. 12, 2017), https://www.floir.com/siteDocuments/MetLife200646-16-CO.pdf (last accessed March 24,
2023); Office of Insurance Regulation, Consent Order In The Matter of Unum Life Insurance Company of America, Case No.
200879-16-CO (Jan. 12, 2017), https://www.floir.com/siteDocuments/Unum200879-16-CO.pdf (last accessed March 24,
2023).
76
Sonali Basak, Katherine Chiglinsky, et al, GE’s Surprise $15 Billion Shortfall Was 14 Years in the Making, Chicago
Tribune, (January 25, 2018), http://www.chicagotribune.com/business/ct-biz-ge-general-electric-accounting-20180125-
story.html (last accessed March 24, 2023); Steve Lohr and Chad Bray, At G.E., $6.2 Billion Charge for Finance Unit Hurts
C.E.O.’s Turnaround Push, New York Times, (February 15, 2023),
https://www.nytimes.com/2018/01/16/business/dealbook/general-electric-ge-capital.html (last accessed March 24, 2023).
77
Chapter 626, F.S., part IX, ss. 626.951-626.99, F.S.
78
Section 626.9541, F.S.
79
Rule 69B-186.010, F.A.C., Unlawful Rebates and Inducements Related to Title Insurance Transactions, governs
inducements related to title insurance, but exempts gifts within the value limitation of s. 626.9541(1)(m), F.S. However, BILL: SB 312 Page 14
insureds goods or services of any value for the purposes of loss control or loss mitigation related
to covered risks.
80
There are several similar limitations on advertising gifts under the Florida
Insurance Code related to the advertising practices of title insurance agents, agencies and
insurers, public adjusters, group and individual health benefit plans, and motor vehicle service
agreement companies.
81
A person who commits acts prohibited by the Unfair Insurance Trade Practices Act is generally
subject to a fine of up to $5,000 for each nonwillful violation, and up to $40,000 for each willful
violation.
82
However, specific violations are subject to greater administrative penalties and are
also punishable as criminal misdemeanors.
83
Additionally, a person who willfully submits
fraudulent signatures on an application or policy-related document commits a third-degree
felony, which is also punishable by the assessment of administrative fines of up to $5,000 for
each nonwillful violation, and up to $75,000 for each willful violation.
84
Anti-Rebating Laws
Rebating is the practice whereby an agent or broker reduces or shares their commission with an
insured as way to induce a customer to purchase an insurance policy. Historically, rebates were
used in the life insurance industry.
85
However, anti-rebate laws began to be enacted when rebates
began to threaten the solvency of life insurance companies and raised questions around unfair
discriminatory practices.
86
Supporters of the laws argued it kept the consumer’s focus on a
product’s merits, not on the size of the rebate. Opponents suggested the laws infringed on their
rights to competition and stifled innovation. Today, most states have enacted anti-rebate statutes
and many have enacted the National Association of Insurance Commissioners’ (NAIC) Unfair
Trade Practices Act (Model #880) created in 1945. The Model Act provides a uniform
framework for the state related to anti-rebating issues and concerns. Over time, numerous
exceptions have been enacted to these laws. The most common exceptions are for promotion
items, referrals, raffles, charity donations and value-added services.
Rebates are common in many industries, but they present a different set of issues in the insurance
area. This is due to a number of reasons:
federal law prohibits any fee, kickback or thing of value given for referral of real estate settlement services on mortgage loans
related to federal programs. 12 U.S.C. s. 2607 (2017).
80
Section 626.9541(5), F.S.
81
Public adjusters, their apprentices, and anyone acting on behalf of the public adjuster are prohibited from giving gifts of
merchandise valued in excess of $25 as an inducement to contract. Section 626.854(9), F.S. A group or individual health
benefit plan may provide merchandise without limitation in value as part of an advertisement for voluntary wellness or health
improvement programs. Section 626.9541(4)(a), F.S. Motor vehicle service agreement companies are prohibited from giving
gifts of merchandise in excess of $25 to agreement holders, prospective agreement holders, or others for the purpose of
advertising. Section 634.282, F.S.
82
Section 626.9521(2), F.S.
83
See, e.g., Section 626.9521(3)(a), F.S., which makes the offenses of twisting and churning, which must involve fraudulent
conduct, punishable as a first degree misdemeanor.
84
Section 626.9521(3)(b), F.S.
85
Time to Dust Off the Anti-Rebate Laws, Journal of Insurance Regulation, 2017,
https://content.naic.org/sites/default/files/jir-za-36-07-el-dust-off-anti-rebate.pdf (last accessed March 24, 2023).
86
Time to Dust Off the Anti-Rebate Laws - Summary, National Association of Insurance Commissioners,
https://content.naic.org/sites/default/files/cipr-brief-time-dust-anti-rebate-laws.pdf (last accessed March 24, 2023). BILL: SB 312 Page 15
In other industries, the rebate is typically offered by the manufacturer directly. For insurance
products, the rebate is offered by an intermediary (the agent).
Insurance rates are set by filing with the state regulators and have the cost of agent
commissions built in to the premium. If an agent has the capacity to give a rebate on the
commission, it may be considered as a factor that the rate is too high.
Giving rebates on insurance products to the policyholder is not transparent. This may give
the agent an advantage over other agents, but does not affect competition between insurers
themselves rebating could lead to unfair price discrimination.
Emerging technologies and innovations create new challenges and opportunities regrading
insurance products and anti-rebating laws.
87
Value-added services encompass many of the
emerging technologies used for risk management and identification, such as water sensors given
to homeowners for early detection of water damage or tracking shipping containers. There is
substantial movement to update the anti-rebating laws to strike a new balance between protecting
the consumer and allowing for innovation.
The NAIC updated its Model Act in 2020 with a substantial rewrite to Section 4(H) regarding
anti-rebating.
88
Nine states have enacted some form of the updated rebating provisions -
Connecticut, Georgia (property and casualty), Kansas, Nebraska, New Mexico, North Dakota,
Ohio, Rhode Island, and Vermont. Indiana has adopted provisions from the National Council of
Insurance Legislators’ Model Act.
89
Eight states are currently pursuing legislation - Florida,
Georgia (life), Hawaii, Iowa, Maryland, Oklahoma, South Dakota, and Wyoming.
90
A Timeline of Anti-Rebating
91
• 1887 – Massachusetts enacts the first anti-rebating statute.
• 1889 – New York enacts an anti-discrimination law mandating equal treatment of
individuals in the same actuarial class.
• 1895 – Thirty insurers enter into an anti-rebating agreement disallowing the practice by
agents.
• 1945 – The federal McCarran-Ferguson Act
92
is passed, and the NAIC develops Model
#880.
• 1988 – California repeals anti-rebating with the passage of Proposition 103.
• 1990 – Florida amends the anti-rebating law, keeping rebating illegal but allowing
specific exceptions.
87
Id.
88
Unfair Trade Practices Act, National Association of Insurance Commissioners,
https://content.naic.org/sites/default/files/inline-files/MO880%20-%202020%20revisions-12042020_As_Amended.pdf (last
accessed March 24, 2023).
89
Rebate Reform Model Act, National Council of Insurance Legislators, https://ncoil.org/wp-
content/uploads/2020/05/NCOIL-Rebate-Reform-Model-FINAL-3-8-20-3.pdf (last accessed March 24, 2023).
90
Information provided by email to Committee staff by the NAIC on February 6, 2023 (on file with the Committee on
Banking and Insurance).
91
See, Time to Dust Off the Anti-Rebate Laws – Summary fn 86.
92
5 U.S. Code section 1011 et seq. Section 1011 of the Act provides “that the continued regulation and taxation by the
several States of the business of insurance is in the public interest, and that silence on the part of the Congress shall not be
construed to impose any barrier to the regulation or taxation of such business by the several States.” BILL: SB 312 Page 16
• 2009 – present – A wave of states begin raising monetary limits for promotional items,
clarifying and revising rules for value-added services, and carving out additional
exceptions to anti-rebating laws.
• 2019 – The Innovation and Technology (EX) Task Force begins discussion of anti-
rebating amendments to Model #880.
• 2020 – The NAIC updates the anti-rebate provisions of Model #880.
III. Effect of Proposed Changes:
Use of Genetic Information for Insurance Purposes
The bill amends s. 627.4301, F.S., to provide that a life insurer, long-term care insurer, or a
disability income insurer authorized to do business in this state may use genetic information for
underwriting purposes if the genetic information is contained in the applicant’s medical record.
The bill provides that such insurer may not cancel coverage based on genetic information; may
not require an applicant to take a genetic test as a condition of insurability; and may not obtain,
request, or otherwise require the complete genome sequence of an applicant’s DNA.
Unfair Insurance Trade Practices
The bill amends s. 626.9541, F.S., to adopt the NAIC Model Act provisions revising anti-
rebating laws. The bill provides that it is not considered discrimination or an unlawful rebate by
an insurer or an agent of the insurer, including by or through employees, affiliates, or third-party
representatives, to offer value-added products or services at no or reduced cost when such
products or services are not specified in the insurance policy, if the product or service relates to
the insurance coverage and is primarily designed to do one or more of the following:
Provide loss mitigation or loss control;
Reduce claim costs or claim settlement costs;
Provide education about liability risks or risk of loss to persons or property;
Monitor or assess risk, identify sources of risk, or develop strategies for eliminating or
reducing risk;
Enhance health;
Enhance financial wellness through items such as education or financial planning services;
Provide post-loss services;
Incentivize behavioral changes to improve the health or reduce the risk of death or disability
of a policyholder, potential policyholder, certificateholder, potential certificateholder,
insured, potential insured, or applicant; or
Assist in the administration of employee or retiree benefit insurance coverage
The bill provides further that:
The cost of the value-added product or service to the insurer or agent must be reasonable in
comparison to the customer’s premiums or insurance coverage for the policy class.
The insurer or agent must ensure that the customer is provided with contact information to
assist the customer with questions regarding the product or service.
The availability of the product or service must be based on documented objective evidence,
and the product or service must be offered in a manner that is not unfairly discriminatory. BILL: SB 312 Page 17
The documented evidence must be maintained by the insurer or agent and produced upon
request by the OIR or the Department of Financial Services (DFS).
If an insurer or agent has a good faith belief, but does not have sufficient evidence to
demonstrate, that the product or service meets the specified criteria, the insurer or agent may
provide the product or service in a manner that is not unfairly discriminatory as part of a pilot
or testing program for up to 1 year. An insurer or agent must notify the OIR or the DFS, as
applicable, of such pilot or testing program offered to consumers in this state before
commencing the program. The insurer or agent may commence the program unless the OIR
or the DFS, as applicable, objects to the program within 21 days after receiving the notice.
An insurer, agent, or a representative may not offer or provide insurance as an inducement to
the purchase of another policy or otherwise use the words “free,” “no cost,” or similar words
in an advertisement.
Value-added products and services may include:
The offering or giving noncash gifts, items, or services, including meals to or charitable
donations on behalf of a customer, in connection with the marketing, sale, purchase, or
retention of contracts of insurance, provided the cost does not exceed an amount
determined to be reasonable by commission rule per policy year per term. The offer must
be made in a manner that is not unfairly discriminatory. The customer may not be
required to purchase, continue to purchase, or renew a policy in exchange for the gift,
item, or service.
Offering or giving noncash gifts, items, or services, including meals to or charitable
donations on behalf of a customer, to commercial or institutional customers in connection
with the marketing, sale, purchase, or retention of contracts of insurance, provided the
cost is reasonable in comparison to the premium or proposed premium and the cost of the
gift or service is not included in any amounts charged to another person or entity. The
offer must be made in a manner that is not unfairly discriminatory. The customer may not
be required to purchase, continue to purchase, or renew a policy in exchange for the gift,
item, or service.
Conducting raffles or drawings permitted by state law, provided there is no financial cost
to entrants for participating, the raffle or drawing does not obligate entrants to purchase
insurance, the prizes are not valued in excess of a reasonable amount as determined by
commission rule, and the raffle or drawing is open to the public. The raffle or drawing
must be offered in a manner that is not unfairly discriminatory. The entrant may not be
required to purchase, continue to purchase, or renew a policy in exchange for the gift,
item, or service.
The bill grants rulemaking authority to the Financial Services Commission to administer these
provisions to ensure consumer protection by addressing, among other issues, consumer data
protections and privacy, consumer disclosure, and unfair discrimination.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None. BILL: SB 312 Page 18
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
None.
C. Government Sector Impact:
None.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends the following sections of the Florida Statutes: 627.4301 and
626.9541.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None. BILL: SB 312 Page 19
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.