H-3616.1 _______________________________________________
HOUSE BILL 2306
_______________________________________________
State of Washington 52nd Legislature 1992 Regular Session
By Representative Inslee
Read first time 01/14/92. Referred to Committee on Financial Institutions & Insurance.
AN ACT Relating to life insurance for the benefit of certain tax exempt organizations; amending RCW 48.18.030; and adding a new section to chapter 48.18 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. RCW 48.18.030 and 1973 1st ex.s. c 89 s 3 are each amended to read as follows:
(1) Any individual of competent legal capacity may procure or effect an insurance contract upon his own life or body for the benefit of any person. But no person shall procure or cause to be procured any insurance contract upon the life or body of another individual unless the benefits under such contract are payable to the individual insured or his personal representatives, or to a person having, at the time when such contract was made, an insurable interest in the individual insured.
(2) If the beneficiary, assignee or other payee under any contract made in violation of this section receives from the insurer any benefits thereunder accruing upon the death, disablement or injury of the individual insured, the individual insured or his executor or administrator, as the case may be, may maintain an action to recover such benefits from the person so receiving them.
(3) "Insurable interest" as used in this section and in RCW 48.18.060 includes only interests as follows:
(a) In the case of individuals related closely by blood or by law, a substantial interest engendered by love and affection; and
(b) in the case of other persons, a lawful and substantial economic interest in having the life, health or bodily safety of the individual insured continue, as distinguished from an interest which would arise only by, or would be enhanced in value by, the death, disablement or injury of the individual insured.
(c) An individual heretofore or hereafter party to a contract or option for the purchase or sale of an interest in a business partnership or firm, or of shares of stock of a close corporation or of an interest in such shares, has an insurable interest in the life of each individual party to such contract and for the purposes of such contract only, in addition to any insurable interest which may otherwise exist as to the life of such individual.
(d) A guardian, trustee or other fiduciary has an insurable interest in the life of any person for whose benefit the fiduciary holds property, and in the life of any other individual in whose life such person has an insurable interest.
(e) An organization described in section 501(c)(3), 501(e), or 501(f) of the internal revenue code has an insurable interest in the life of an insured if the organization (i) purchases or receives by assignment life insurance on an insured and the person insured consents in writing to the purchase or assignment, or (ii) the person insured purchases the insurance contract and designates irrevocably the organization as beneficiary.
NEW SECTION. Sec. 2. A new section is added to chapter 48.18 RCW to read as follows:
The provisions of RCW 48.18.030 apply to all insurance contracts entered into under this chapter.