S-3378.1 _______________________________________________
SENATE BILL 6206
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State of Washington 52nd Legislature 1992 Regular Session
By Senator West
Read first time 01/21/92. Referred to Committee on Financial Institutions & Insurance.
AN ACT Relating to insurable interests of employers; and amending RCW 48.18.030.
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 employer has an insurable interest in, and may, with the consent of the insured in accordance with the provisions of RCW 48.18.060, insure on an individual or group basis for its benefit or for the benefit of an employer-sponsored trust for the benefit of its employees, the lives of its directors, officers, managers, employees, and its retired employees. An employer may insure the lives of the persons under this subsection (3)(e) only if the coverage is limited to an amount reasonably commensurate with the employer's projected unfunded liabilities to the persons for employee welfare benefit plans, calculated according to accepted actuarial principles. An employer may not retaliate in any manner against an employee or a retired employee for refusing consent to be insured. The proceeds of a policy or certificate issued under this subsection (3)(e) is exempt from the claims of a creditor or dependent of the insured. As used in this subsection (3)(e), "employer" means an individual, sole proprietorship, partnership, firm, corporation, association, or other legal entity, that has one or more employees and is legally doing business in this state. As used under this subsection (3)(e), "employee welfare benefit plan" means a plan, fund, or program under which an employer provides participants or their beneficiaries, through the purchase of insurance or otherwise, medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, or death.