§ 26.1-33-44 — Life insurance policy ownership or retention by trust - Duties of trustee

Notwithstanding any other provision of law, the duties of a trustee regarding the acquisition,
retention, or ownership of a life insurance policy upon the life of any one or more of the grantor
of the trust, the grantor's spouse, children, grandchildren, or parents include a duty of loyalty
and fair dealing, but, except as provided below, do not include a duty to:
1. Determine whether any life insurance policy in the trust is or remains a proper
investment;
2. Exercise a policy option, right, or privilege available under a life insurance policy; or
3. Diversify the investment.
A trustee is not liable to the beneficiaries under the trust instrument or to any other person for a
loss that is claimed to result from the absence of these duties, except if a trustee acquires a
replacement policy for the trust which replaces an existing policy owned by the trust or
previously owned by the trust. The trustee's exoneration from duty provided in this section does
not apply to the replacement policy and only applies to a policy transferred to a trust by the
grantor or some other party other than the trustee or acquired by the trustee of a trust which
before the acquisition of the policy had never owned any such life insurance policy.