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CONNECTICUT - Insurable Interest Laws

As of August 1, 2007
Most recent legislation changes:  October 1, 2004

§ 38a-450. Certain corporations and associations may be made beneficiaries.

Any life insurance company doing business within the state may issue policies of insurance predicated upon the life or lives of any person or persons, payable at maturity to any educational, ecclesiastical, benevolent, charitable or eleemosynary corporation which can legally take and receive testamentary legacies, irrespective of a financial interest on the part of such corporation in the life of the person or persons insured.

§ 38a-451. Trustee as beneficiary of policy.

    (a) Unless prohibited by the policy there may be designated, as beneficiary of any policy issued by any life insurance company, the trustee of a trust to be created in and by the last will of the insured or in and by an inter vivos trust. Such designation may direct payment to such trustee as may qualify and be appointed for such trust. Upon the death of the insured and the qualification of the trustee of such testamentary or inter vivos trust, such life insurance company shall pay to such trustee the proceeds of the policy and other sums, if any, due the beneficiary thereunder. If (1) the insured dies intestate, or (2) no inter vivos trust is created or no such trust is created in the will of the insured duly admitted to probate, or (3) if such trust is so created but no trustee thereof qualifies as such within one year after the death of the insured or if the inter vivos trust has been terminated, such life insurance company shall pay such proceeds and other sums, if any, to such contingent beneficiary, if any, as may have been designated for that one of such contingencies (1), (2) or (3) as has occurred, and, if none was so designated, to the executors or administrators of the insured.

(b) This section shall apply to all such designations of beneficiary by an insured dying after June 15, 1965, whether or not a trustee shall be identified by name in the policy.

§ 38a-291. Life insurance owned by an employer or trust. Provisions and prohibitions. Construction.

    (a)(1)(A) The trustee of any voluntary employees' beneficiary association trust, as defined in Section 501(c)(9) of the Internal Revenue Code of 1986, as from time to time amended, to provide life, health or similar benefits to employees or retired employees and acting in a fiduciary capacity with respect to those employees or retired employees may procure insurance on the lives of those employees or retired employees; (B) an employer or a trustee of a trust, other than a voluntary employees' beneficiary association trust, providing life, health, disability, retirement or similar benefits to the employer's employees or retired employees may procure insurance on the lives of those employees or retired employees; and (C) prior to procuring insurance on the lives of employees or retired employees pursuant to subparagraph (A) or (B) of this subdivision, the employer or trustee shall obtain the written consent of each employee or retired employee proposed for coverage, and such consent shall include an acknowledgment from the employee that the employer or trustee may maintain the life insurance coverage after the employee's employment has terminated.

(2) No person may retaliate against any employee or retired employee for refusing to consent to the issuance of insurance on the life of such employee.

(3) For nonkey or nonmanagerial employees, the amount of coverage shall be reasonably related to the benefits provided to those employees in the aggregate. For purposes of this section, "nonkey or nonmanagerial employees" means those employees who do not meet the criteria set forth in 29 CFR 541.1, 29 CFR 541.2 or 29 CFR 541.3.

(4) Life insurance coverage purchased to finance employer-provided pension and welfare benefit plans shall be allowed only on the lives of those employees and retirees who are eligible to participate in the plan at the time their lives are first insured under the plan.

(b) The provisions of this section shall apply to policies or contracts delivered or issued for delivery in this state.

(c) This section shall not be construed to affect or prohibit any person, trust or corporation from procuring insurance upon the life or health of another person in whom it has an insurable interest at common law.

This information does not constitute legal advice by the Insurance Barometer LLC and should not be relied upon as such. Every effort has been made to provide correct and accurate information but the reader should verify state laws prior to implementing an insurance program.