PART II.  LIFE INSURANCE AND ANNUITIES

SUBPART A.  LIFE INSURANCE AND ANNUITIES IN GENERAL

§901.  Insurable interest required; personal insurance; intentional acts exclusion

A.  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; however, 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.

B.  If the beneficiary, assignee, or other payee under any contract made in violation of this Section receives from the insurer any benefits under the contract 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 receiving them.

C.  "Insurable interest" as used in this Section and in R.S. 22:856 includes only interest as follows:

(1)  In the case of individuals related closely by blood or by law, a substantial interest engendered by love and affection.

(2)  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.

(3)  A person party to an agreement, contract, or option for the purchase or sale of a business or a firm or immovable property owned by a business or firm, or an interest therein or of shares of stock of a closed corporation or of an interest in such shares, has an insurable interest in the life of each individual party to such agreement, contract, or option, each individual shareholder of such closed corporation or each individual shareholder of a corporation, individual partner of a partnership, or individual member of a limited liability company owning such property, business, firm, or shares of stock for the purposes of such agreement, contract, or option, only, in addition to any insurable interest which may otherwise exist as to the life of such individual party or individual shareholder.

D.(1)  No beneficiary, assignee, or other payee under any personal insurance contract shall receive from the insurer any benefits under the contract  accruing upon the death, disablement, or injury of the individual insured when the beneficiary, assignee, or other payee is either:

(a)  Held by a final judgment of a court of competent jurisdiction to be criminally responsible for the death, disablement, or injury of the individual insured.

(b)  Judicially determined to have participated in the intentional, unjustified killing of the individual insured.

(2)  Where such a disqualification exists, the policy proceeds shall be payable to the secondary or contingent beneficiary, unless similarly disqualified, or, if no secondary or contingent beneficiary exists, to the estate of the insured.  Nothing contained in this Section shall prohibit payment pursuant to an assignment of the policy proceeds where such payment defrays the cost and expenses of the insured's funeral or expense incurred in connection with medical treatment of the insured.  Nothing contained in this Section shall prohibit payment of insurance proceeds pursuant to a facility of payment clause, so long as such payment is not made to a beneficiary, assignee, or other payee disqualified by this Section.

(3)  An executive pardon of any beneficiary, assignee, or other payee disqualified under this Subsection shall not affect the disqualification.

Acts 1958, No. 125; Amended by Acts 1979, No. 246, §1; Acts 1987, No. 743, §1; Acts 1995, No. 1244, §1; Redesignated from R.S. 22:613 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2011, No. 94, §1, eff. Jan. 1, 2012.

NOTE:  Former R.S. 22:901 redesignated as R.S. 22:768 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.