South Carolina General Assembly
109th Session, 1991-1992

Bill 3242


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Introducing Body:               House
Bill Number:                    3242
Primary Sponsor:                Boan
Committee Number:               02
Type of Legislation:            GB
Subject:                        Life insurance creditors'
                                rights
Residing Body:                  Senate
Current Committee:              Banking and Insurance
Companion Bill Number:          405
Computer Document Number:       NO5/7053.BD
Introduced Date:                Jan 17, 1991
Date of Last Amendment:         Apr 10, 1991
Last History Body:              Senate
Last History Date:              Apr 16, 1991
Last History Type:              Introduced, read first time,
                                referred to Committee
Scope of Legislation:           Statewide
All Sponsors:                   Boan
                                McElveen
Type of Legislation:            General Bill



History


 Bill  Body    Date          Action Description              CMN
 ----  ------  ------------  ------------------------------  ---
 3242  Senate  Apr 16, 1991  Introduced, read first time,    02
                             referred to Committee
 3242  House   Apr 10, 1991  Amended, read third time,
                             sent to Senate
 3242  House   Apr 04, 1991  Debate adjourned until
                             Wednesday, April 10
 3242  House   Apr 03, 1991  Read second time
 3242  House   Mar 28, 1991  Debate adjourned until
                             Wednesday, April 3
 3242  House   Mar 26, 1991  Debate adjourned until
                             Wednesday, March 27
 3242  House   Mar 19, 1991  Debate adjourned until
                             Tuesday, March 26
 3242  House   Mar 05, 1991  Debate adjourned until
                             Tuesday, March 12
 3242  House   Feb 26, 1991  Debate adjourned until
                             Tuesday, March 5
 3242  House   Feb 20, 1991  Committee Report: Favorable     26
 3242  House   Jan 17, 1991  Introduced, read first time,    26
                             referred to Committee

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Indicates Matter Stricken
Indicates New Matter

AMENDED AND NOT PRINTED BY THE HOUSE--APRIL 10, 1991

Done 1/13/92

February 20, 1991

H. 3242

Introduced by REPS. Boan and McElveen

S. Printed 2/20/91--H.

Read the first time January 17, 1991.

A BILL

TO AMEND SECTION 38-63-40, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO LIFE INSURANCE FOR AN INSURED'S SPOUSE, CHILDREN, AND DEPENDENTS AND CLAIMS OF THE INSURED'S CREDITORS, SO AS TO REVISE THE PROVISIONS FOR THE CREDITORS' RIGHTS UNDER LIFE INSURANCE POLICIES AND PROVIDE FOR THE CLAIMS OF CREDITORS OF THE INSURED UNDER VARIOUS OTHER INSURANCE CONTRACTS.

Amend Title To Conform

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

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

"Section 38-63-40. The proceeds (A) Proceeds, avails, and cash surrender value values 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 , and not more than four thousand dollars of the cash surrender value of a life insurance policy if the insured or applicant has filed a petition in bankruptcy within two years of purchasing the insurance, payable to a beneficiary or assignee other than the insured or applicant are exempt from creditors or a person claiming by, through, or under him or them or any of them unless:

(1) the policy was obtained of the insured or applicant whether or not the right to change the beneficiary is reserved and whether or not the policy is payable to the insured if the beneficiary dies first. Premiums paid 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, with interest, are subject to their claims out of the proceeds.

(B) Proceeds of insurance or annuity contracts, by agreement, may be held by the insurer exempt from claims of the beneficiary's creditors. (C) Proceeds of group insurance contracts are exempt from claims of the creditors of the insured. (D) Benefits of accident and disability contracts are exempt from claims of the creditors of the insured."

SECTION 2. This act takes effect upon approval by the Governor.

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