South Carolina General Assembly
107th Session, 1987-1988

Bill 1084


                    Current Status

Bill Number:               1084
Ratification Number:       313
Act Number                 305
Introducing Body:          Senate
Subject:                   Protection of life insurance policy
View additional legislative information at the LPITS web site.


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(A305, R313, S1084)

AN ACT TO AMEND SECTION 38-63-40, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE PROTECTION OF AN INDIVIDUAL LIFE INSURANCE POLICY FOR A MARRIED INDIVIDUAL AND CHILDREN FROM CLAIMS OF CREDITORS AND TO AMEND SECTION 38-65-90, RELATING TO THE PROTECTION OF A GROUP LIFE INSURANCE POLICY FOR A MARRIED INDIVIDUAL AND CHILDREN FROM CLAIMS OF CREDITORS, SO AS TO INCREASE THE MAXIMUM AMOUNT OF LIFE INSURANCE COVERED BY THESE SECTIONS FROM TWENTY-FIVE THOUSAND TO FIFTY THOUSAND DOLLARS AND TO REMOVE THE PROTECTION PROVIDED FOR A MARRIED INDIVIDUAL AND CHILDREN IN THESE SECTIONS WHEN THE POLICY WAS OBTAINED WITH THE INTENT TO DEFRAUD CREDITORS OR THE CREDITOR OR REPRESENTATIVE POSSESSES A VALID ASSIGNMENT OF THE CASH SURRENDER VALUE OF THE POLICY FROM THE POLICYHOLDER ON A SEPARATE FORM.

Be it enacted by the General Assembly of the State of South Carolina:

Policy for married individual, children;

maximum protection for creditors, exceptions

SECTION 1. Section 38-63-40 of the 1976 Code is amended to read:

"Section 38-63-40. The proceeds and cash surrender value of life insurance in the aggregate amount of not more than fifty thousand dollars upon the life of an individual, which has already been or may be taken out, in which it is expressed to be for the primary benefit of the insured's spouse, children, or dependents inure to the use and benefit of the individual or individuals for whose use and benefit it is expressed to be taken out, and the sum or net amount of the insurance becoming due and payable by the terms of the policy is payable to the individual or individuals as stated in this section, free and discharged from the claims of the representatives of the insured or of any of the insured's creditors or a person claiming by, through, or under him or them or any of them unless:

(1) the policy was obtained with the intent to defraud creditors; or

(2) the creditor or representative possesses a valid assignment of the cash surrender value of the policy from the policyholder on a separate form.

In these two instances, the creditor may recover from either the cash surrender value or the proceeds of the life insurance policy of the amount secured by the assignment."

Policy for married individual, children; maximum protection for creditors, exceptions

SECTION 2. Section 38-65-90 of the 1976 Code is amended to read:

"Section 38-65-go. The proceeds and cash surrender value of life insurance in the aggregate amount of not more than fifty thousand dollars upon the life of an individual, which has already been or may be taken out, in which it is expressed to be for the primary benefit of the insured's spouse, children, or dependents inure to the use and benefit of the individual or individuals for whose use and benefit it is expressed to be taken out, and the sum or net amount of the insurance becoming due and payable by the terms of the policy is payable to the individual or individuals as stated in this section, free and discharged from the claims of the representatives of the insured or of any of the insured's creditors or a person claiming by, through, or under him or them or any of them unless:

(1) the policy was obtained with the intent to defraud creditors; or

(2) the creditor or representative possesses a valid assignment of the cash surrender value of the policy from the policyholder on a separate form. In these two instances, the creditor may recover from either the cash surrender value or the proceeds of the life insurance policy of the amount secured by the assignment."

Time effective

SECTION 3. This act takes effect upon approval by the Governor.