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2005 SESSION

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SB 1227 Life insurance; person may take out contract upon himself for another's benefit.

Introduced by: Walter A. Stosch | all patrons    ...    notes | add to my profiles

SUMMARY AS PASSED: (all summaries)

Life insurance; insurable interests. Eliminates a provision that currently allows a person to procure an insurance contract upon another individual when the benefits are payable to a beneficiary designated by the insured, if the beneficiary did not have an insurable interest in the insured when the contract was made. The measure provides that a lawful and substantial economic interest, which constitutes an insurable interest, is deemed to exist in parties to a contract for the purchase or sale of a business firm or in trustees of certain trusts. The measure does not apply to life insurance policies or contracts where, prior to December 31, 2004, a Virginia-headquartered charitable organization executed a nondisclosure and exclusivity agreement and was the holder of a charitable certificate issued prior to that date, if the policies or contracts are written on individuals who were donors to such a charitable organization or an organization under common control with the charitable organization. This bill is identical to HB 2766.


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