06 LC 28
3052S
The
Senate Insurance and Labor Committee offered the following substitute to HB
1304:
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Title 33 of the Official Code of Georgia Annotated, relating to insurance,
so as to provide that neither the cash surrender values nor the proceeds of life
insurance policies and annuity contracts shall be liable to attachment,
garnishment, or legal process in favor of any creditor of the person for whose
use or benefit the policy or contract was executed; to provide that the proceeds
of life insurance policies that are payable to the
insured́s
estate or executor, administrator, or assign shall become a part of the
insured́s
estate to be administered as all other estate assets; to provide for the
discharge from liability for any insurer for payments in accordance with such
provisions; to provide for related matters; to provide an effective date; to
repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Title
33 of the Official Code of Georgia Annotated, relating to insurance, is amended
by striking Code Section 33-25-11, relating to right of beneficiaries and
assignees of insurance policies to proceeds of life insurance policies, and
inserting in lieu thereof a new Code Section 33-25-11 to read as
follows:
"33-25-11.
(a)
If a policy
of life insurance is effected by any person on his own life or on another life
in favor of a person other than himself or, except in cases of transfer with
intent to defraud creditors, if a policy of life insurance is assigned or in any
way made payable to any such person, the lawful beneficiary or assignee thereof,
other than the insured or the person so effecting such insurance or executors or
administrators of such insured or the person so effecting the insurance, shall
be entitled to its proceeds and avails as against the creditors and
representatives of the insured and of the person effecting the same, whether or
not the right to change the beneficiary shall be reserved or permitted and
whether or not the policy shall be made payable to the person whose life is
insured if the beneficiary or assignee shall predecease such
person
Whenever any
person residing in the state shall die leaving insurance on his or her life,
such insurance shall inure exclusively to the benefit of the person for whose
use and benefit such insurance is designated in the policy, and the proceeds
thereof shall be exempt from the claims of creditors of the insured unless the
insurance policy or a valid assignment thereof provides otherwise. Whenever the
insurance, by designation or otherwise, is payable to the insured or to the
insured́s
estate or to his or her executors, administrators, or assigns, the insurance
proceeds shall become a part of the
insured́s
estate for all purposes and shall be administered by the personal representative
of the estate of the insured in accordance with the probate laws of the state in
like manner as other assets of the
insured́s
estate.
(b)
Subject to
the statute of limitations, the amount of any premiums for said insurance paid
with intent to defraud creditors with interest thereon shall inure to the
benefit of creditors from the proceeds of the policy; but the insurer shall be
discharged of all liability thereon by payment of its proceeds in accordance
with its terms, unless before the payment the insurer shall have received
written notice, by or in behalf of a creditor, of a claim to recover for
transfer made or premiums paid with intent to defraud creditors, with
specifications of the amount claimed
Payments as
directed in this Code section shall, in every such case, discharge the insurer
from any further liability under the policy, and the insurer shall in no event
be responsible for, or be required to see to, the application of such
payments.
(c)
The cash surrender values of life insurance policies issued upon the lives of
citizens or residents of this state, upon whatever form, shall not in any case
be liable to attachment, garnishment, or legal process in favor of any creditor
of the person whose life is so insured unless the insurance policy was assigned
to or was effected for the benefit of such creditor or unless the purchase,
sale, or transfer of the policy is made with the intent to defraud
creditors."
SECTION
2.
Said
title is further amended by striking Code Section 33-28-7, relating to right of
beneficiaries and assignees to proceeds of annuity, reversionary annuity, and
pure endowment contracts as against creditors and representatives of persons
effecting contracts, and inserting in lieu thereof a new Code Section 33-28-7 to
read as follows:
"33-28-7.
If
an annuity, reversionary annuity, or pure endowment contract shall be effected
by any person, based on his own life or on another life, payable to a person
other than himself, the lawful beneficiary or assignee of the contract, other
than the person effecting the contract or his executors or administrators, shall
be entitled to its proceeds and avails against the creditors and representatives
of the person effecting the contract to the same extent and under the same
conditions provided with reference to the proceeds and avails of insurance
policies in Code Section 33-25-11
The proceeds
of annuity, reversionary annuity, or pure endowment contracts issued to citizens
or residents of this state, upon whatever form, shall not in any case be liable
to attachment, garnishment, or legal process in favor of any creditor of the
person who is the beneficiary of such annuity contract unless the annuity
contract was assigned to or was effected for the benefit of such creditor or
unless the purchase, sale, or transfer of the policy is made with the intent to
defraud
creditors."
SECTION
3.
This
Act shall become effective upon its approval by the Governor or upon its
becoming law without such approval.
SECTION
4.
All
laws and parts of laws in conflict with this Act are repealed.