CHAPTER 173
H.P. 1086 - L.D. 1481
An Act To Clarify Provisions Governing Corporate-owned Life Insurance Policies
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 24-A MRSA §2404, sub-§3, as amended by PL 1993, c. 320, §§1 and 2 and affected by §4, is further amended to read:
3. "Insurable interest" as to such personal insurance means that every individual has an insurable interest in the individual's own life, body, and health of himself, and of other persons that a person has an insurable interest in other individuals as follows:
A. In the case of individuals related closely by blood or by law, a substantial interest engendered by love and affection;
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. A party to a contract or option for the purchase or sale, including a redemption, of an interest in a business proprietorship, partnership or firm, or of shares of stock of a corporation or of an interest in these shares, has an insurable interest in the life, body and health of each individual party to that contract or option, and for the purposes of that contract or option only, in addition to any insurable interest that may otherwise exist as to that individual;
D. A corporation has an insurable interest in the lives of its employees, former employees and retirees for the purpose of funding, in the aggregate, all or part of the corporation's cost for preretirement and postretirement medical, death, disability and pension benefits to its employees, former employees, retirees or their beneficiaries, provided that an insurance program used to finance these employee benefits includes former employees, retirees or a broad class of employees selected by objective standards related to age, service, sex or category of employment and that the proceeds created by that insurance program are used for the sole purpose of funding the corporations's preretirement or postretirement benefit programs covering at least a broad class of employees; and
E. Any revocable or irrevocable trust has an insurable interest, provided any settlor or any beneficiary of the trust has an insurable interest as provided in paragraph A, B, or C or D. A partnership has an insurable interest provided any partner has an insurable interest.
Effective September 13, 2003, unless otherwise indicated.
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