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 meeting specific criteria have an insurable interest in individuals who consent to the ownership of life insurance.

The bill also updates the language in Section 27-15-8 regarding policies with cash surrender value, changing the wording from "will" to "shall" in relation to the insurer's obligation to advance loan amounts on the policy. It specifies that the loan value must be at least equal to the cash surrender value and outlines the conditions under which a policy may terminate due to indebtedness. 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