Application of part.

(1) This part shall apply to direct life insurance policies, health insurance policies, annuity contracts, and supplemental contracts with or without life contingencies issued by persons licensed to transact such insurance in this state.

(2) Coverage under this part shall be provided to:

(a) Persons who, regardless of where they reside, except for nonresident certificateholders under group policies or contracts, are the beneficiaries, assignees, or payees of the persons covered under paragraph (b); and

(b) Persons who are owners of or certificateholders under such policies or contracts, and who:

1. Are residents of this state; or

2. Are residents of other states, but only if:

a. The insurers which issued such policies or contracts are domiciled in this state;

b. Such insurers were not licensed in the states in which such persons reside at the time specified in a state’s guaranty association law as necessary for coverage by that state’s association;

c. Such other states have associations similar to the association created by this part; and

d. Such persons are not eligible for coverage by such associations.

(3) This part does not apply to:

(a) That portion or part of a variable life insurance contract or variable annuity contract not guaranteed by an insurer.

(b) That portion or part of any policy or contract under which the risk is borne by the policyholder.

(c) Any policy or contract or part thereof assumed by the impaired or insolvent insurer under a contract of reinsurance, other than reinsurance for which assumption certificates have been issued.

(d) Fraternal benefit societies as defined in s. 632.601.

(e) Health maintenance organizations, except for assessments levied pursuant to ss. 631.715(2)(a)1., 631.718(3)(b), and 631.819(2)(c) for long-term care insurer impairments or insolvencies.

(f) Dental service plan insurance.

(g) Pharmaceutical service plan insurance.

(h) Optometric service plan insurance.

(i) Ambulance service association insurance.

(j) Preneed funeral merchandise or service contract insurance.

(k) Prepaid health clinic insurance.

(l) Any annuity contract or group annuity contract that is not issued to and owned by an individual, except to the extent of any annuity benefits:

1. Guaranteed directly and not through an intermediary to an individual by an insurer under such contract or certificate;

2. Under an annuity issued by an insurer under 26 U.S.C. s. 408(b); or

3. Under an annuity issued by an insurer and held by a custodian or trustee in accordance with 26 U.S.C. s. 408(a).

This paragraph applies to every insolvency regardless of its date of inception, and an assessment base may not include premiums for such excluded products.

(m) Any federal employees’ group policy or contract that, under 5 U.S.C. s. 8909(f), is prohibited from being subject to an assessment under s. 631.718.

(n) Except as provided in this paragraph, a portion of a policy or contract, to the extent that the rate of interest on which the policy or contract is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value:

1. Averaged over the period of 4 years immediately preceding the date on which the member insurer becomes an impaired or insolvent insurer under this part, whichever is earlier, exceeds the rate of interest determined by subtracting 2 percentage points from Moody’s Corporate Bond Yield Average averaged for that same 4-year period or for such lesser period if the policy or contract was issued less than 4 years before the member insurer becomes an impaired or insolvent insurer under this part, whichever is earlier; and

2. On and after the date on which the member insurer becomes an impaired or insolvent insurer under this part, whichever is earlier, exceeds the rate of interest determined by subtracting 3 percentage points from the most current version of Moody’s Corporate Bond Yield Average.

This paragraph does not apply to any portion of a policy or contract, including a rider, which provides long-term care or any other health insurance benefit.

(o) A portion of a policy or contract to the extent the policy or contract provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which has not been credited to the policy or contract, or as to which the policy or contract owner’s rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this part. However, if the interest or change in value is credited less frequently than annually as determined by using the procedures defined in the policy or contract, interest or change in value shall be credited by using the procedure defined in the policy or contract as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and shall not be subject to forfeiture.

(p) A policy or contract providing any hospital, medical, prescription drug, or other health care benefits pursuant to Title XVIII (Medicare), Title XIX (Medicaid), or Title XXI (the Children’s Health Insurance Program) of the Social Security Act or any regulations promulgated thereunder.

(q) Structured settlement annuity benefits to which a payee, or a beneficiary if the payee is deceased, has transferred his or her rights in a structured settlement factoring transaction, as that term is defined in 26 U.S.C. s. 5891(c)(3)(A).

(4) This part shall only apply to those delinquency proceedings occurring on or after October 1, 1979.

(5) Notwithstanding any other provisions of this part, this part applies to coverage of a person who is a payee under a structured settlement annuity, or a beneficiary if the payee is deceased, with a coverage limit of $300,000 by the association, if:

(a) The payee is a resident of this state, regardless of where the contract owner resides.

(b) Neither the payee, the beneficiary, nor the contract owner is eligible for coverage by the association of the state in which the contract owner resides.