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 and life insurance policies. Notable insertions include the specification that a trustee of a trust established by a certificate holder has an insurable interest in the life of a preneed contract purchaser or beneficiary, retroactively applying this to policies issued before May 6, 2008. Additionally, the bill clarifies that a charitable organization meeting the requirements of 26 U.S.C. § 501(c)(3) can own or purchase life insurance on an individual who consents, establishing that the organization has a substantial interest in the insured individual.

The bill also updates the language regarding the cash surrender value of insurance policies, specifying that insurers shall advance loans against policies with cash surrender value, and outlines the conditions under which policies may terminate due to indebtedness. The amendments replace outdated references, such as changing "Chapter 17A" to "Article 5 of Chapter 13 of Title 34," and ensure that the provisions apply to policies issued on or after the operative date of the amended section. 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