§ 15-5-114 — Insurable interest of trustee - definition

(1) In this section,
settlor means a person who executes a trust instrument. The term includes a
person for which a fiduciary or agent is acting.

(2) A trustee of a trust has an insurable interest in the life of an individual
insured under a life insurance policy that is owned by the trustee of the trust acting
in a fiduciary capacity or that designates the trust itself as the owner if, on the date
the policy issued:

(a) The insured is:

(I) A settlor of the trust; or

(II) An individual in whom a settlor of the trust has, or would have had if living
at the time the policy was issued, an insurable interest; and

(b) The life insurance proceeds are primarily for the benefit of one or more
trust beneficiaries that have:

(I) An insurable interest in the life of the insured; or

(II) A substantial interest engendered by love and affection in the
continuation of the life of the insured and, if not already included pursuant to
subsection (2)(b)(I) of this section, who are:

(A) Related within the fifth degree or closer, as measured by the civil law
system of determining degrees of relation, either by blood or law, to the insured;

(B) Stepchildren of the insured or their descendants; or

(C) Individuals who are designated as beneficiaries of insurance policies for
life insurance coverage on the life of the insured under a designated beneficiary
agreement executed pursuant to article 22 of this title 15.

(3) This section does not limit or abridge any insurable interest or right to
insure under the common law or any other statute.

Legislative History

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1152, � 1, effective January 1, 2019.