The bill amends Sections 27-14-3 and 27-15-8 of the Code of Alabama 1975 to correct internal citations and clarify provisions regarding insurable interest in personal insurance. Notable insertions include the specification that a corporation has an insurable interest in the life or ability of its directors, officers, and employees, as well as the trustee of a trust established by a corporation. The bill also retroactively applies certain provisions regarding insurable interest for preneed contract purchasers and beneficiaries, ensuring that life insurance policies purchased by trusts are used solely for the benefit of the designated parties. Additionally, it clarifies that charitable organizations can own life insurance on individuals who consent to such ownership.

The bill also updates the language in Section 27-15-8 regarding policies with cash surrender value, mandating that insurers shall advance loans against the policy's value under specified conditions. It replaces the term "will" with "shall" to emphasize the obligation of insurers. Furthermore, it clarifies the conditions under which a policy may terminate due to indebtedness and establishes the insurer's right to defer loan granting for six months after application. The act is set to take effect on June 1, 2025.

Statutes affected:
Introduced: 27-14-3, 27-15-8
Enrolled: 27-14-3, 27-15-8