Monthly LRA Update: November 2025

LEGISLATIVE DEVELOPMENT

Florida Bill to Restrict Employer-Owned Life Insurance

On October 27 a Florida Assemblymember, Peggy Gossett-Seidman (R), filed House Bill 261, titled Restrictions on Employer-Owned Life Insurance. As drafted, this legislation is adverse to BOLI/COLI in the state of Florida.

Among others, the bill includes the following restrictions:

• An employer would need to provide written notice of a policy to the insured’s spouse, next of kin, or estate representative within 30 days after issuance;
• An employer could maintain no more than 5 policies at one time without prior approval of the Florida Office of Insurance Regulation;
• The death benefit must not exceed 5 times the key person’s average annual compensation (from the preceding three-year period);
• Upon termination of employment, the employer must either cancel the policy or transfer ownership to the key person;
• An employee’s consent would be revocable;
• Any death benefit paid to an employer would be subject to corporate income tax under Florida law; and
• The provisions of the bill are drafted to largely apply retroactively to existing policies.

In discussions with insurers, we have not yet learned any background information on why this legislation has been proposed. It is not expected that this bill will receive any serious consideration.

Further, it is worth noting that Florida was one of the last states to enact an explicit life insurance insurable interest statute (Fla. Stat. § 627.404 – effective July 1, 2008). Florida’s insurable interest statute explicitly acknowledges a business entity’s insurable interest in its owners, directors, officers, managers and key employees. Florida law already requires affirmative written consent of the insured and expressly states that a business entity may not retaliate or take adverse action against any person that does not consent to be insured. The state law, coupled with IRC 101(j) eligibility, notice and consent requirements, seems to adequately protect against any potential abuses.