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HB 261

Restrictions on Employer-owned Life Insurance Policies

2026 Regular Session Introduced by Peggy Gossett-Seidman

Florida bill restricts employers from holding undisclosed life insurance on employees, requiring explicit consent and legitimate financial interest to prevent profit-driven death-benefit arrangements.

Now in Insurance & Banking Subcommittee
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Bill Summary · HB 261

Legislative bill overview

HB 261 would restrict Florida employers' ability to purchase and maintain life insurance policies on their employees without explicit consent and financial interest requirements. The bill appears designed to limit "janitor insurance" or "dead peasant insurance" arrangements, where employers profit from employee deaths through policies the employees may not know about or benefit from.

Why is this important

Employer-owned life insurance (EOLI) policies can create perverse financial incentives where companies profit when employees die, potentially raising ethical concerns about workplace safety and employee welfare. Current federal law (STOLI restrictions) only partially addresses these practices, leaving state-level gaps that this bill seeks to close through stronger transparency and consent requirements.

Potential points of contention

  • Business compliance burden: Employers argue new documentation and consent requirements increase administrative costs and complexity, particularly for small businesses
  • Insurable interest definition: Disagreement over what constitutes legitimate financial interest (loss of key employees vs. speculative profit motives) could create enforcement ambiguity
  • Retroactive application: Whether restrictions apply to existing policies or only new ones will significantly affect insurance industry revenue and employer compliance timelines

Compiled from official sources — confirm details with the bill’s official record.

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