AN ACT
1-1 relating to consent to the purchase or application for, and
1-2 designation of owners or beneficiaries of, certain life insurance
1-3 policies.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 113, Acts of the 53rd Legislature,
1-6 Regular Session, 1953 (Article 3.49-1, Vernon's Texas Insurance
1-7 Code), is amended to read as follows:
1-8 Sec. 1. Any person of legal age may apply for insurance on
1-9 his life in any legal reserve or mutual assessment life insurance
1-10 company and in such application designate in writing any person,
1-11 persons, partnership, association, corporation or other legal
1-12 entity, or any combination thereof, as the beneficiary or
1-13 beneficiaries, or the absolute or partial owner or owners, or both
1-14 beneficiary and owner, of any policy or policies issued in
1-15 connection with such application; and with respect to any such
1-16 policy or policies any such beneficiary or owner so designated
1-17 shall at all times thereafter have an insurable interest in the
1-18 life of such person, except as provided in Section 4 of this Act [3
1-19 hereof].
1-20 Sec. 2. Any person of legal age whose life is insured under
1-21 any existing or future policy of insurance by any legal reserve or
1-22 mutual assessment life insurance company may, in the manner and to
1-23 the extent permitted by the policy, designate in writing as the
1-24 beneficiary or beneficiaries thereof any person, persons,
2-1 partnership, association, corporation or other legal entity, or any
2-2 combination thereof, and in addition, in any manner and to any
2-3 extent not prohibited by the terms of the policy, may transfer or
2-4 assign in writing any such policy or any interest, benefit, right
2-5 or title therein to any person, persons, partnership, association,
2-6 corporation or other legal entity, or any combination thereof, and
2-7 with respect to any such policy any such beneficiary, transferee or
2-8 assignee shall at all times thereafter have an insurable interest
2-9 in the life of such person, except as provided in Section 4 of this
2-10 Act [3 hereof].
2-11 Sec. 3. Any person of legal age may consent in writing to
2-12 the purchase of or the application for an individual or group
2-13 insurance policy or policies issued by any legal reserve or mutual
2-14 assessment life insurance company by a third party or parties and
2-15 in such written document consent to or designate any person,
2-16 persons, partnership, association, corporation or other legal
2-17 entity, or any combination thereof, as the absolute or partial
2-18 owner or owners or beneficiary, or any combination thereof, of any
2-19 policy or policies issued in connection with such consent or
2-20 designation; and with respect to any such policy or policies any
2-21 such owner or beneficiary shall at all times thereafter have an
2-22 insurable interest in the life of such person, except as provided
2-23 in Section 4 of this Act.
2-24 Sec. 4. Notwithstanding the provisions thereof, no person,
2-25 persons, partnership, association, corporation or other legal
2-26 entity, or any combination thereof, directly or indirectly engaged
3-1 in the business of burying the dead shall have or obtain, directly
3-2 or indirectly, any insurable interest in the life of any person by
3-3 virtue of Sections 1, [or] 2, or 3 of this Act [hereof], or shall
3-4 have an insurable interest in the life of any person unless such
3-5 insurable interest be established under and by virtue of other
3-6 applicable statutory or common law.
3-7 Sec. 5 [4]. The provisions of this Act are cumulative of
3-8 existing law in Texas, statutory and otherwise, on the question of
3-9 insurable interest. This Act is enacted in specific recognition of
3-10 the provisions of Article 21.23 of the Texas Insurance Code, 1951,
3-11 that the interest of any beneficiary in a life insurance policy is
3-12 forfeited if the beneficiary is the principal or an accomplice in
3-13 bringing about the death of the insured.
3-14 This Act shall be liberally construed to effectuate its
3-15 purposes, and its provisions are not to be limited or restricted by
3-16 previous declarations or holdings of the Courts of Texas defining
3-17 the term insurable interest.
3-18 SECTION 2. The purpose of this Act is to clarify existing
3-19 law and practice as it relates to consent to the ownership of, or
3-20 status as a beneficiary under, a life insurance policy. This Act
3-21 is not intended to alter or modify the meaning of, or law relating
3-22 to, former Section 4, Chapter 113, Acts of the 53rd Legislature,
3-23 Regular Session, 1953 (Article 3.49-1, Vernon's Texas Insurance
3-24 Code), as that section existed immediately before the effective
3-25 date of this Act.
3-26 SECTION 3. This Act takes effect September 1, 1999, and
4-1 applies only to an insurance policy delivered, issued for delivery,
4-2 or renewed on or after January 1, 2000. A policy delivered, issued
4-3 for delivery, or renewed before January 1, 2000, is governed by the
4-4 law as it existed immediately before the effective date of this
4-5 Act, and that law is continued in effect for that purpose.
4-6 SECTION 4. The importance of this legislation and the
4-7 crowded condition of the calendars in both houses create an
4-8 emergency and an imperative public necessity that the
4-9 constitutional rule requiring bills to be read on three several
4-10 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1196 passed the Senate on
April 19, 1999, by the following vote: Yeas 30, Nays 0; and that
the Senate concurred in House amendment on May 18, 1999, by a
viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1196 passed the House, with
amendment, on May 11, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor