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MISSOURI  - Insurable Interest Laws

As of August 1, 2007
Most recent legislation changes:  1997

§ 376.531. Life insurance policies, consent of insured required, exceptions--employers have insurable interest in employees, when, effects

1. No life insurance contract upon an individual, except a contract of group life insurance, shall be made or effectuated unless at the time of the making of the contract the individual insured, being competent and of legal capacity to contract, applies therefor or has consented thereto in writing, except in the following cases:

        (1) Any person having an insurable interest in the life of a minor, or any person upon whom a minor is dependent for support and maintenance, may effectuate insurance upon the life of, or pertaining to, the minor;

        (2) Family policies may be issued insuring any two or more members of a family on an application signed by either parent, stepparent, or by a husband or wife.

2. An employer, or a trust which is sponsored by an employer for the benefit of its employees, shall have an insurable interest in each of the lives of the employer's employees, directors or retired employees. Notwithstanding the provisions of section 376.691, the employer or trust may insure such employees', directors' or retired employees' lives for such employer's or trust's benefit on an individual or group basis with the consent of the insured. The consent requirement shall be deemed to be satisfied if:

        (1) The employee, director or retired employee is provided with a written notice that the employer or trust intends to obtain life insurance coverage with respect to such person's life; and

        (2) The employee, director or retired employee fails to provide written notification to the employer or trust, within thirty days from the date that the notice was transmitted, that such person does not consent to the employer obtaining life insurance coverage on such person's life. It shall be unlawful for the employer or trust to retaliate against any person for refusing to consent to the issuance of life insurance on such person's life.

3. The employer's or trust's insurable interest in nonmanagement and retired employees shall be limited to an amount of aggregate projected death benefits commensurate with the aggregate projected liabilities to such employees under all employee welfare benefit plans, as defined in 29 U.S.C. 1002(1). Calculations of life insurance benefits and welfare benefit liabilities shall be made in accordance with generally accepted actuarial principles. Matching of life insurance benefits and welfare benefit liabilities may be done on a cash flow, present value or other appropriate basis.

4. For purposes of this section, the term "employer" means any individual, sole proprietorship, partnership, limited liability company, corporation or any other entity that is legally doing business in this state. The term shall also include all entities or persons which are controlled by or affiliated with any of the foregoing entities. The determination of whether any entity or person is controlled by or affiliated with another shall be made by applying the principles set forth in subsection (b) or (c) of section 414 of the Internal Revenue Code of 1986, as in effect on January 1, 1993, except that all references therein to eighty percent shall be changed to fifty-one percent.

5. This section shall not be interpreted to limit other insurable interests which may exist by statute or at common law. The provisions of this section shall apply to all insurance contracts in force on or after August 28, 1994.

6. Determination of the existence and extent of the insurable interest under any life insurance policy shall be made at the time the contract of insurance becomes effective but need not exist at the time the loss occurs.

§ 376.562. Charitable, benevolent, educational and religious organizations may be beneficiary or owner of policy, life insurance, when--fraud or coercion, exception

It shall be lawful for any charitable, benevolent, educational or religious institution qualified pursuant to section 501(c) (3) of the Internal Revenue Code, as amended, to solicit, procure and enforce, in the absence of any fraud or coercion, the payment of proceeds of:

(1) An assignment or designation as beneficiary, a gift or assignment of an interest in life insurance in the life of a donor or assignor; or

(2) An ownership of an interest in life insurance on the life of an insured if the charitable, benevolent, educational or religious institution has obtained the consent of the person whose life is being insured, as required by section 376.531.

§ 377.080. Limitations on the issuance of policies -- charitable, benevolent, educational and religious organizations have insurable interest -- fraud or coercion, exception

1. No corporation doing business pursuant to sections 377.010 to 377.190 shall issue a certificate or policy upon the life of any person who at nearest birthday is more than sixty years of age, nor upon any life in which the beneficiary named has no insurable interest, nor as an endowment to any insured person while living, and every call for payments by the policy or certificate holders shall distinctly state the purposes of the same.

2. Any assignment of a policy or certificate to a person having no insurable interest in the insured life shall render such assignments void and of no effect.

3. A charitable, benevolent, educational or religious institution qualified pursuant to section 501(c) (3) of the federal Internal Revenue Code, as amended, shall be deemed to have an insurable interest in the life of an insured individual if, in the absence of any fraud or coercion:

        (1) The individual has designated the institution as a beneficiary;

        (2) The individual has made a gift or an assignment of an interest in life insurance on the life of such insured individual; or

        (3) The life insurance is owned by such charitable, benevolent, educational or religious institution and such institution has obtained the consent of the person whose life is being insured, as required by section 376.531, RSMo.

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.