Restrictions on Employer-owned Life Insurance Policies

HB 261 2026

CODING: Words stricken are deletions; words underlined are additions.
hb261-00
Page 1 of 7
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

A bill to be entitled 1
An act relating to restrictions on employer-owned life 2
insurance policies; creating s. 627.4635, F.S.; 3
providing definitions; authorizing employer-owned life 4
insurance policies covering certain key persons of 5
business entities, organizations, companies, and 6
corporations under specified circumstances; requiring 7
certain disclosures to such key persons; prohibiting 8
employer-owned life insurance policies covering 9
certain employees; providing that policies covering 10
such employees are void as against public policy; 11
requiring insurer notice to the Office of Insurance 12
Regulation of employer-owned life insurance policies; 13
requiring the office to maintain a registry and to 14
publish an annual report; requiring certain employer 15
disclosures relating to employer-owned life insurance 16
policies; providing that premiums, loan interests, and 17
expenses related to employer-owned life insurance are 18
not tax deductible; subjecting death benefits received 19
by employers to corporate income tax; providing an 20
exception; providing penalties; requiring the office 21
to adopt certain standard forms by a specified date; 22
providing applicability and retroactive applicability; 23
providing an effective date. 24
25

HB 261 2026

CODING: Words stricken are deletions; words underlined are additions.
hb261-00
Page 2 of 7
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

Be It Enacted by the Legislature of the State of Florida: 26
27
Section 1. Section 627.4635, Florida Statutes, is created 28
to read: 29
627.4635 Restrictions on employer-owned life insurance 30
policies.— 31
(1) DEFINITIONS.—As used in this section, the term: 32
(a) "Employer-owned life insurance" means a life insurance 33
policy owned by, or payable to, an employer on the life of a 34
current or former employee. The term also includes company-owned 35
life insurance or corporate-owned life insurance, a life 36
insurance policy owned by, or payable, to a company or 37
corporation, rather than an individual, on the life of a current 38
or former employee. 39
(b) "Key person" means an owner, senior executive, 40
director, officer, partner, or manager of a business entity, 41
organization, company, or corporation whose death would cause 42
direct, material financial harm to the business entity, 43
organization, company, or corporation. 44
(c) "Rank-and-file employee" means any employee who is not 45
a key person. 46
(2) EMPLOYER-OWNED LIFE INSURANCE POLICIES COVERING KEY 47
PERSONS.— 48
(a) An employer may purchase, maintain, or be a 49
beneficiary of an employer-owned life insurance policy covering 50

HB 261 2026

CODING: Words stricken are deletions; words underlined are additions.
hb261-00
Page 3 of 7
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

a key person only if all the following conditions are met: 51
1. The employer has obtained the key person's informed, 52
written, and revocable consent before purchasing the policy. 53
2. The employer has provided written notice of the policy 54
to the key person's spouse, next of kin, or estate 55
representative within 30 days after issuance of the policy. 56
3. The employer does not maintain more than five key 57
person policies at any one time without prior approval of the 58
office. The five key persons must be the five highest ranking 59
persons in the employer's business, organization, company, or 60
corporation, based on their seniority, salaries, and benefits. 61
4. The death benefit of any key person's policy does not 62
exceed five times that key person's average annual compensation 63
for the 3 years immediately preceding issuance. 64
5. Upon the key person's termination of employment, the 65
employer either cancels the policy or, with the key person's 66
written consent, transfers ownership to the key person or his or 67
her family. 68
(b)1. If an employer-owner life insurance policy is issued 69
before July 1, 2026, and all the conditions in paragraph (a) are 70
met, the employer must, by January 1, 2027, provide to the key 71
person whose life is covered by the employer-owner life 72
insurance policy the standard form described in subsection (7), 73
which informs the key person that the policy does not benefit 74
the key person, but fully benefits the employer, and that the 75

HB 261 2026

CODING: Words stricken are deletions; words underlined are additions.
hb261-00
Page 4 of 7
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

key person has the option to opt out of the policy. 76
2. If an employer-owner life insurance policy is issued on 77
or after July 1, 2026, and before October 1, 2026, the employer 78
must, before purchasing the policy, inform the key person whose 79
life is covered by the employer-owner life insurance policy that 80
the policy does not benefit the key person, but fully benefits 81
the employer, and that the key person has the option to reject 82
the policy. 83
3. If an employer-owner life insurance policy is issued on 84
or after October 1, 2026, the employer must, before purchasing 85
the policy, provide to the key person the standard form 86
described in subsection (7), which informs the key person that 87
the policy does not benefit the key person, but fully benefits 88
the employer, and that the key person has the option to reject 89
the policy. 90
(3) CERTAIN EMPLOYER-OWNED LIFE INSURANCE POLICIES 91
PROHIBITED.— 92
(a) Except as provided in paragraph (7)(b), an employer 93
may not purchase, maintain, or be a beneficiary of an employer-94
owned life insurance policy if the policy covers a rank-and-file 95
employee or if any of the conditions described in subsection (2) 96
are not met. 97
(b) Any insurance policy purchased or maintained in 98
violation of paragraph (a) is void as against public policy. 99
(4) NOTICES; REGISTRY AND REPORTING.— 100

HB 261 2026

CODING: Words stricken are deletions; words underlined are additions.
hb261-00
Page 5 of 7
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

(a) Each insurer issuing an employer-owned life insurance 101
policy shall file notice with the office. The notice must 102
include the employer's name, the number of employees insured, 103
and the aggregate face value of the policies. 104
(b) The office shall maintain a publicly searchable online 105
registry of the filings under paragraph (a) and shall publish an 106
annual report of such filings. 107
(c) An employer that purchases, maintains, or is a 108
beneficiary of an employer-owned life insurance policy shall 109
inform all key persons and shall publicly disclose, such as 110
through publication on the employer's publicly available 111
Internet website, that the employer has met all the requirements 112
of this section. 113
(5) TAX TREATMENT.— 114
(a) Premiums, loan interest, or related expenses for 115
employer-owned life insurance are not deductible under the law 116
of this state. 117
(b) Any death benefit received by an employer under an 118
employer-owned life insurance policy is subject to corporate 119
income tax unless paid directly to the employee's estate or 120
family. 121
(6) ENFORCEMENT AND PENALTIES.— 122
(a) An employer that violates this section is liable for 123
civil penalties up to five times the death benefit collected. 124
(b) An employee's family has a private right of action to 125

HB 261 2026

CODING: Words stricken are deletions; words underlined are additions.
hb261-00
Page 6 of 7
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

recover the full value of any benefit collected in violation of 126
this section. 127
(c) An insurer that knowingly issues or administers a 128
policy in violation of this section is subject to an 129
administrative fine of up to $1 million per violation and may 130
have its authority to transact insurance in this state suspended 131
or revoked. 132
(7) STANDARD FORM.—By October 1, 2026, the office shall 133
adopt a standard form, written in plain and simple language, 134
informing a key person that an employer-owned life insurance 135
policy does not benefit the key person, but fully benefits the 136
employer, and that the key person has the option to reject or 137
opt out of the policy. 138
(8) APPLICABILITY.— 139
(a) This section applies to all new policies issued on or 140
after July 1, 2026. 141
(b) The restrictions on and the prohibitions against 142
employer-owned life insurance policies under subsections (2) and 143
(3), respectively, apply retroactively to existing policies 144
unless the insured employee or the insured employee's family 145
affirmatively opts to maintain the policy and is named as the 146
sole beneficiary, in which case all death benefits shall be paid 147
to the employee's estate or designated family beneficiary. 148
(c) If any provision of this section is in conflict with 149
any other law, the provisions of this section shall govern. 150

HB 261 2026

CODING: Words stricken are deletions; words underlined are additions.
hb261-00
Page 7 of 7
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S

Section 2. This act shall take effect July 1, 2026. 151