14100597D Be it enacted by the General Assembly of Virginia: 1. That §38.2-301 of the Code of Virginia is amended and reenacted as follows: §38.2-301. Insurable interest required; life, accident and sickness insurance; certain annuities. A. Any individual of lawful age may take out an insurance contract upon himself for the benefit of any person. No person shall knowingly procure or cause to be procured any insurance contract upon another individual unless the benefits under the insurance contract are payable to (i) the insured or his personal representative or (ii) a person having an insurable interest in the insured at the time when the insurance contract was made. No person shall knowingly procure or cause to be procured any annuity contract providing benefits to another individual if the annuity contract includes a guaranteed return of premiums or other benefit payable upon the death of the annuitant, unless the benefits under the annuity contract are payable to (a) the annuitant or his personal representative or (b) a person having an insurable interest in the annuitant at the time the annuity contract was made. B. As used in this section and §38.2-302, "insurable interest" means: 1. In the case of individuals related closely by blood or by law, a substantial interest engendered by love and affection; 2. In the case of other persons, a lawful and substantial
economic interest in the life, health, and bodily safety of the insured or annuitant. "Insurable
interest" shall not include an interest 3. In the case of employees of corporations, with respect to
whom the corporate employer, a trust established by the corporate employer, or
an employee benefit trust is the beneficiary under an insurance contract or annuity contract with a death benefit,
the lawful and substantial economic interest required in subdivision 2 4. In the case of a party to a contract or option for the purchase or sale, including a redemption, of an interest in a business proprietorship, partnership, or firm or of shares of stock of a corporation or of an interest in such shares, the lawful and substantial economic interest required in subdivision 2 shall be deemed to exist in each individual party to such contract or option and for the purpose of such contract or option only, in addition to any insurable interest that may otherwise exist as to the life of such individual; 5. In the case of a trustee, other than the trustee of a domestic business trust or foreign business trust, as defined in §13.1-1201, the lawful and substantial economic interest required in subdivision 2 shall be deemed to exist, whether the life insurance policy or annuity contract with a death benefit is owned by a trustee before, on, or after July 1, 2005, in (i) the individual insured or annuitant who established the trust, (ii) each individual in whose life the owner of the trust for federal income tax purposes has an insurable interest, and (iii) each individual in whose life a beneficiary of the trust has an insurable interest; and 6. In the case of an organization described in §501 (c) of
the Internal Revenue Code, the lawful and substantial economic interest
required in subdivision 2 |