NO. 20. AN ACT RELATING TO CHARITABLE GIFTS OF LIFE INSURANCE AND BYLAWS OF COOPERATIVE INSURANCE CORPORATIONS.
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 8 V.S.A. § 3711 is added to read:
§ 3711. CHARITABLE LIFE GIFTS
(a) A life insurance contract may be entered into in which a person paying the consideration for such insurance has no insurable interest in the life of the individual insured, provided that a charitable, benevolent, educational, or religious institution or its agency or any other organization that qualifies under Section 501(c)(3) of the Internal Revenue Code is irrevocably designated as the owner and beneficiary of the contract.
(b) In making such a contract, both the owner and the insured shall make and sign the joint application. The person paying the premium shall irrevocably designate a charitable, benevolent, educational, or religious institution, or an agency of such an institution or any other organization that qualifies under Section 501(c)(3) of the Internal Revenue Code, as the irrevocable owner and beneficiary of such contract.
(c) If a prospective insured applies jointly for a life insurance policy which irrevocably names a 501(c)(3) organization or nonprofit as owner and beneficiary then, at the time of such joint application, an insurable interest is created for the entity in the prospective insured’s life. Before an application may be made for such a policy, the insurer shall provide the prospective insured with a written disclosure to remind the prospective insured to consider his or her current state of health and to consult with a tax advisor or estate planner.
(d) Nothing in this section shall prohibit any combination of the applicant, premium payer, owner, and beneficiary from being the same person.
(e) This section does not alter the insurable interest requirements of any other law.
Sec. 2. 8 V.S.A. § 3925(1) and (8) are amended to read:
The corporate powers of such corporation shall be exercised by a board of
directors, who shall be not less than
six five in number. Such
directors shall be divided into classes and a portion only elected each year.
They shall be elected for a term of not more than four years each and shall
choose from their number a president, secretary and such other officers as may
be deemed necessary. After the first year, the directors shall be chosen at an
annual meeting to be held on the second Tuesday of January, unless some other
day is designated in such bylaws, at which meeting each person insured shall
have one vote and may be entitled to vote by proxy under such rules and
regulations as may be prescribed by the bylaws;
The bylaws of such corporation may be amended at any time
, subject to the
written approval of the commissioner.
Approved: May 13, 2003