Sec. 7.8. (a) As used in this chapter, “stranger originated life insurance” means a practice or plan to initiate a life insurance policy for the benefit of a third party investor who, at the time the life insurance policy is originated, has no insurable interest in the insured.

     (b) The term includes the following:

Terms Used In Indiana Code 27-8-19.8-7.8

  • insured: refers to an individual whose life is the subject of insurance under a life insurance policy or contract. See Indiana Code 27-8-19.8-3
  • person: means an individual, an association, a corporation, a limited liability corporation, an estate, a partnership, a trust, or any other business or legal entity. See Indiana Code 27-8-19.8-7
(1) An arrangement under which, at the time of life insurance policy inception:

(A) a life insurance policy is purchased with resources or guarantees from or through a person that is not legally permitted to initiate the life insurance policy; and

(B) a written or verbal arrangement or agreement is made to transfer the ownership of the life insurance policy or policy benefits to a third party.

(2) A trust that is:

(A) created to give an appearance of the existence of an insurable interest; and

(B) used to initiate a life insurance policy for an investor.

As added by P.L.112-2008, SEC.3.

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