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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 | history

SUMMARY AS PASSED:

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.

SUMMARY AS PASSED SENATE:

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 does not apply to certain policies or contracts where a Virginia-headquartered charitable organization executed a nondisclosure and exclusivity agreement, and held a charity certificate issued by a business trust, prior to December 31, 2004, where the policies or contracts are written on the lives of individuals who had been donors to the charity or a related organization.

SUMMARY AS INTRODUCED:

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.