On July 1, a new law went into effect in Florida that lets offshore companies sell life insurance and annuities more easily to non-U.S. residents. Proponents of the law say the state stands to reap tens of billions of dollars in revenue, generate thousands of jobs and enhance its already advantageous position as a locale for international financial services companies.
"This landmark legislation makes a big change in the way business as usual is conducted in the U.S. with respect to sales of insurance and annuities to non-residents," says Bowman Brown, a senior partner at Shutts & Bowen, a Miami, Fla.-based law firm that helped draft and shepherd the bill through the legislature. "It facilitates in a safe and sound way the addition of these important products to the range of financial services that offshore companies already can offer in the state, including private banking and investment solutions."
Adds Sam Miller, executive vice president of the Tallahassee-based Florida Insurance Council: "There is already a thriving banking business in the Miami area for folks who come from outside the U.S who do business with non-U.S. domiciled banks. We believe there will be a similar success with life insurance and annuities products."
The legislation, HB 105–informally dubbed the Proposal to Encourage the Development of Florida as an International Insurance Center–eliminates the requirement that foreign insurers obtain a certificate of authority from the Florida Office of Insurance Regulation (OIR) to sell life insurance products. The law also enables offshore insurers to establish support operations in Florida.
Offshore companies only can sell to foreign nationals who spend a maximum of 120 days in the U.S. Prospective clients may purchase products from Florida-registered offshore carriers either while in Florida or from their home countries.
Brown says the new law will appeal to U.S. insurance companies with offshore facilities; foreign insurers based in the U.K., Bermuda and Canada; and other international financial services providers that have a presence in south Florida.
Among the institutions that plan to market to non-U.S. residents under the law is BNP Paribas, a France-based provider of corporate, investment and retailing banking services. Leading the effort is the company's Miami-based office.
Seno Bril, general manager of the company's Miami branch and president of the Florida International Bankers Association, Miami, says affluent Mexicans will be BNP Paribas' primary focus in the near term because of the country's "very sophisticated tax structure." He adds, however, the company plans to market to high-net-worth individuals throughout Latin America through BNP Paribas-affiliated companies.
"This legislation serves our purpose because the Miami international banking community is largely focused on Latin America," says Bril. "We believe there is tremendous potential."
