South Carolina Legislature


 

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H 3242
Session 109 (1991-1992)


H 3242 General Bill, By Boan and J.T. McElveen
 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.

   01/17/91  House  Introduced and read first time HJ-12
   01/17/91  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-12
   02/20/91  House  Committee report: Favorable Labor, Commerce and
                     Industry HJ-4
   02/26/91  House  Debate adjourned until Tuesday, March 5, 1991 HJ-27
   03/05/91  House  Debate adjourned until Tuesday, March 12, 1991 HJ-2
   03/19/91  House  Debate adjourned until Tuesday, March 26, 1991 HJ-3
   03/26/91  House  Debate adjourned until Wednesday, March 27, 1991 HJ-13
   03/28/91  House  Debate adjourned until Wednesday, April 3, 1991 HJ-20
   04/03/91  House  Read second time HJ-9
   04/04/91  House  Debate adjourned until Wednesday, April 10, 1991 HJ-11
   04/10/91  House  Amended HJ-20
   04/10/91  House  Read third time and sent to Senate HJ-20
   04/16/91  Senate Introduced and read first time SJ-15
   04/16/91  Senate Referred to Committee on Banking and Insurance SJ-1



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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