On July 1, 2008, substantial amendments to Section 627.404, Florida's insurable interest law will become effective.  The amendments were deemed necessary due to uncertainty related to the purchase of life insurance in estate planning and due to issues relating to the purchase of life insurance on rank and file employees under policies owned by and payable to employers.  Previously, Florida's statutory law did not explicitly require an insurable interest and did not define insurable interest for life insurance.
As amended, Section 627.404 specifies:
- That a person may obtain a life insurance contract on another person only if the benefits under the policy are payable to a person who has an insurable interest in the individual insured at the time the contract is made.
- That an insurable interest need not exist when the loss occurs.
- Who has an insurable interest in the individual insured. 
- That an insured or the insured's representative has a right of recovery against any person that receives insurance policy benefits if that person did not have an insurable interest in the insured when the insurance contract was entered into.   
- That written consent is a perquisite to the issuance of a contract of insurance on the insured, except in limited circumstances.  The insured's signature on a policy constitutes written consent.
Under amended Section 627.404 only those specific persons named in the Section will be recognized to have an insurable interest in Florida.  With respect to employers procuring life insurance on employees, amended Section 627.404 limits the insurable interest to:
- A trustee or custodian of retirement or deferred compensation plans, including those governed by the Employee Retirement Income Security Act of 1974, in the life of any participant in the plan.
- A business entity, in the life of the owners, directors, officers, partners, and managers, or key employees or key persons of the business entity or any affiliate or subsidiary of the business entity.
The legislative history for amendments to Section 627.404, provides that a business entity is not permitted to obtain an insurance policy on an employee who is not a "key" employee whose loss would not result in a substantial pecuniary loss to the business.  Key employee is defined to mean an individual whose position or compensation is described in Section 101(j)(2)(A)(ii) of the Internal Revenue Code.
Interestingly, the legislative history also notes that the amendments to Section 627.404 do not address whether an insurance contract is void if there is no insurable interest.  The legislative history also comments that the amendments do not address whether an insurer is liable if it knowingly or negligently issues a policy to a person who does not have an insurable interest in the insured.  It is not clear whether the Florida Office of Insurance Regulation will provide further guidance on these issues.