§ 58-58-75. Insurable interest in life and physical ability of employee or agent.
§ 58‑58‑75. Insurable interest in life and physical ability of employee or agent.
(a) An employer,whether a partnership, joint venture, business trust, mutual association,corporation, any other form of business organization, or one or moreindividuals, or any religious, educational, or charitable corporation,institution or body, has an insurable interest in and the right to insure thephysical ability or the life, or both the physical ability and the life, of anemployee for the benefit of such employer. Any principal shall have a lifeinsurable interest in and the right to insure the physical ability or the life,or both the physical ability and the life, of an agent for the benefit of suchprincipal.
(b) An employeedescribed in subsection (a) of this section shall be insured for the benefit ofan employer described in subsection (a) of this section only if the employeereceives written notification from the insurer of the existence of the coverageor that coverage will be purchased. The notice shall be provided to theemployee in connection with the application for coverage or within 30 daysafter the effective date of the coverage and shall include a statement that theemployer may maintain the life insurance coverage on the employee even afteremployment is terminated.
(c) For nonkey ornonmanagerial employees, the aggregate amount of coverage shall be reasonablyrelated to the benefits provided to the employees in the aggregate.
(d) With respect toemployer‑provided pension and welfare plans, the life insurance coveragepurchased to finance the plans may only cover the lives of those employees andretirees who, at the time their lives were first insured under the plan, eitherare participants, or would be eligible to participate, upon the satisfaction ofage, service, or similar eligibility criteria in the plan. (1951, c. 283, s. 1; 1957, c.1086; 2005‑234, s. 2.)