376.531. Life insurance policies, consent of insured required, exceptions--employers have insurable interest in employees, when, effects.
Life insurance policies, consent of insured required,exceptions--employers have insurable interest in employees, when,effects.
376.531. 1. No life insurance contract upon an individual,except a contract of group life insurance, shall be made oreffectuated unless at the time of the making of the contract theindividual insured, being competent and of legal capacity tocontract, applies therefor or has consented thereto in writing,except in the following cases:
(1) Any person having an insurable interest in the life ofa minor, or any person upon whom a minor is dependent for supportand maintenance, may effectuate insurance upon the life of, orpertaining to, the minor;
(2) Family policies may be issued insuring any two or moremembers of a family on an application signed by either parent,stepparent, or by a husband or wife.
2. An employer, or a trust which is sponsored by anemployer for the benefit of its employees, shall have aninsurable interest in each of the lives of the employer'semployees, directors or retired employees. Notwithstanding theprovisions of section 376.691, the employer or trust may insuresuch employees', directors' or retired employees' lives for suchemployer's or trust's benefit on an individual or group basiswith the consent of the insured. The consent requirement shallbe deemed to be satisfied if:
(1) The employee, director or retired employee is providedwith a written notice that the employer or trust intends toobtain life insurance coverage with respect to such person'slife; and
(2) The employee, director or retired employee fails toprovide written notification to the employer or trust, withinthirty days from the date that the notice was transmitted, thatsuch person does not consent to the employer obtaining lifeinsurance coverage on such person's life. It shall be unlawfulfor the employer or trust to retaliate against any person forrefusing to consent to the issuance of life insurance on suchperson's life.
3. The employer's or trust's insurable interest innonmanagement and retired employees shall be limited to an amountof aggregate projected death benefits commensurate with theaggregate projected liabilities to such employees under allemployee welfare benefit plans, as defined in 29 U.S.C. 1002(1).Calculations of life insurance benefits and welfare benefitliabilities shall be made in accordance with generally acceptedactuarial principles. Matching of life insurance benefits andwelfare benefit liabilities may be done on a cash flow, presentvalue or other appropriate basis.
4. For purposes of this section, the term "employer" meansany individual, sole proprietorship, partnership, limitedliability company, corporation or any other entity that islegally doing business in this state. The term shall alsoinclude all entities or persons which are controlled by oraffiliated with any of the foregoing entities. The determinationof whether any entity or person is controlled by or affiliatedwith another shall be made by applying the principles set forthin subsection (b) or (c) of section 414 of the Internal RevenueCode of 1986, as in effect on January 1, 1993, except that allreferences therein to eighty percent shall be changed tofifty-one percent.
5. This section shall not be interpreted to limit otherinsurable interests which may exist by statute or at common law.The provisions of this section shall apply to all insurancecontracts in force on or after August 28, 1994.
6. Determination of the existence and extent of theinsurable interest under any life insurance policy shall be madeat the time the contract of insurance becomes effective but neednot exist at the time the loss occurs.
(L. 1992 H.B. 1574 § 14, A.L. 1994 S.B. 732)