1-1 By: Shapiro S.B. No. 1196
1-2 (In the Senate - Filed March 10, 1999; March 11, 1999, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 9, 1999, reported favorably by the following vote: Yeas 6,
1-5 Nays 0; April 9, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to consent to the purchase or application for, and
1-9 designation of owners or beneficiaries of, certain life insurance
1-10 policies.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Chapter 113, Acts of the 53rd Legislature,
1-13 Regular Session, 1953 (Article 3.49-1, Vernon's Texas Insurance
1-14 Code), is amended to read as follows:
1-15 Sec. 1. Any person of legal age may apply for insurance on
1-16 his life in any legal reserve or mutual assessment life insurance
1-17 company and in such application designate in writing any person,
1-18 persons, partnership, association, corporation or other legal
1-19 entity, or any combination thereof, as the beneficiary or
1-20 beneficiaries, or the absolute or partial owner or owners, or both
1-21 beneficiary and owner, of any policy or policies issued in
1-22 connection with such application; and with respect to any such
1-23 policy or policies any such beneficiary or owner so designated
1-24 shall at all times thereafter have an insurable interest in the
1-25 life of such person, except as provided in Section 4 of this Act [3
1-26 hereof].
1-27 Sec. 2. Any person of legal age whose life is insured under
1-28 any existing or future policy of insurance by any legal reserve or
1-29 mutual assessment life insurance company may, in the manner and to
1-30 the extent permitted by the policy, designate in writing as the
1-31 beneficiary or beneficiaries thereof any person, persons,
1-32 partnership, association, corporation or other legal entity, or any
1-33 combination thereof, and in addition, in any manner and to any
1-34 extent not prohibited by the terms of the policy, may transfer or
1-35 assign in writing any such policy or any interest, benefit, right
1-36 or title therein to any person, persons, partnership, association,
1-37 corporation or other legal entity, or any combination thereof, and
1-38 with respect to any such policy any such beneficiary, transferee or
1-39 assignee shall at all times thereafter have an insurable interest
1-40 in the life of such person, except as provided in Section 4 of this
1-41 Act [3 hereof].
1-42 Sec. 3. Any person of legal age may consent in writing to
1-43 the purchase of or the application for an individual or group
1-44 insurance policy or policies issued by any legal reserve or mutual
1-45 assessment life insurance company by a third party or parties and
1-46 in such written document consent to or designate any person,
1-47 persons, partnership, association, corporation or other legal
1-48 entity, or any combination thereof, as the absolute or partial
1-49 owner or owners or beneficiary, or any combination thereof, of any
1-50 policy or policies issued in connection with such consent or
1-51 designation; and with respect to any such policy or policies any
1-52 such owner or beneficiary shall at all times thereafter have an
1-53 insurable interest in the life of such person, except as provided
1-54 in Section 4 of this Act.
1-55 Sec. 4. Notwithstanding the provisions thereof, no person,
1-56 persons, partnership, association, corporation or other legal
1-57 entity, or any combination thereof, directly or indirectly engaged
1-58 in the business of burying the dead shall have or obtain, directly
1-59 or indirectly, any insurable interest in the life of any person by
1-60 virtue of Sections 1, [or] 2, or 3 of this Act [hereof], or shall
1-61 have an insurable interest in the life of any person unless such
1-62 insurable interest be established under and by virtue of other
1-63 applicable statutory or common law.
1-64 Sec. 5[4]. The provisions of this Act are cumulative of
2-1 existing law in Texas, statutory and otherwise, on the question of
2-2 insurable interest. This Act is enacted in specific recognition of
2-3 the provisions of Article 21.23 of the Texas Insurance Code, 1951,
2-4 that the interest of any beneficiary in a life insurance policy is
2-5 forfeited if the beneficiary is the principal or an accomplice in
2-6 bringing about the death of the insured.
2-7 This Act shall be liberally construed to effectuate its
2-8 purposes, and its provisions are not to be limited or restricted by
2-9 previous declarations or holdings of the Courts of Texas defining
2-10 the term insurable interest.
2-11 SECTION 2. This Act takes effect September 1, 1999, and
2-12 applies only to an insurance policy delivered, issued for delivery,
2-13 or renewed on or after January 1, 2000. A policy delivered, issued
2-14 for delivery, or renewed before January 1, 2000, is governed by the
2-15 law as it existed immediately before the effective date of this
2-16 Act, and that law is continued in effect for that purpose.
2-17 SECTION 3. The importance of this legislation and the
2-18 crowded condition of the calendars in both houses create an
2-19 emergency and an imperative public necessity that the
2-20 constitutional rule requiring bills to be read on three several
2-21 days in each house be suspended, and this rule is hereby suspended.
2-22 * * * * *