2023 New Hampshire Revised Statutes › Title XXXVII - Insurance › Chapter 408 - Life Insurance › Section 408:3 - Insurable Interest.

408:3 Insurable Interest. –
I. For the purpose of life insurance and annuities:
(a) An individual has an unlimited insurable interest in his or her own life, body, and health, and may lawfully take out a policy of insurance on his or her own life, body, and health, and have the policy made payable to whomsoever he or she pleases, regardless of whether the beneficiary designated has an insurable interest.
(b) A policyholder has an insurable interest in the life of an individual if such policyholder has a lawful and substantial interest in the continued life of the insured, as distinguished from an interest that would arise only from, or would be enhanced in value by, the death of the individual insured.
(c) An organization which qualifies for a charitable deduction under the Internal Revenue Code has an insurable interest in the life of any person who consents in writing to the organization's ownership or purchase of that insurance.
(d) A life insurance policy or annuity may be issued to a business entity as the owner and beneficiary on the life of a key employee or partner if there exists a reasonable and substantial expectation of pecuniary benefit or advantage, direct or indirect, in the continued life of the other person.
(e) A trustee, sponsor, or custodian of assets held in any plan governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001 et seq., or in any other retirement or employee benefit plan has an insurable interest in the lives of its employees, former employees and retirees for the purpose of funding, in the aggregate, all or part of the entity's cost for preretirement and postretirement medical, death, disability and pension benefits to its employees, former employees, retirees or their beneficiaries, as long as an insurance program used to finance these employee benefits includes former employees, retirees or a broad class of employees selected by objective standards related to service, or category of employment and that the proceeds created by that insurance program are used for the sole purpose of funding the corporation's preretirement or postretirement benefit programs covering at least a broad class of employees.
(1) Employers shall notify eligible employees of their proposed participation in the plan and the employees shall be given an opportunity to refuse to participate. On a prospective basis, employers shall obtain written consent of each individual being insured. Consent shall include an acknowledgment that the employer may maintain the life insurance coverage even after the insured individual's employment has terminated and the employee may not revoke their consent.
(2) An employer shall not retaliate in any manner against an employee or a retired employee for refusing to consent to be insured.
(3) For non-key or non-managerial employees, the amount of coverage shall be reasonably related to the benefits provided to the employees.
(4) With respect to employer provided pension and welfare benefit plans, the life insurance coverage purchased to finance the plans should only be allowed on the lives of those employees and retirees who, at the time their lives are first insured under the plan, would be eligible to participate in the plan.
II. An insurable interest shall exist at the time the policy or contract is issued. No policy or annuity can exist without an insurable interest.
III. No life insurance policy or annuity contract may be issued unless the insured has consented in writing to the issuance of such policy. The insured shall have the right to revoke their consent at any time, except for plans issued as described in subparagraph I(e).
IV. If the beneficiary, assignee, or other payee under any contract made in violation of this section receives from the insurer any benefits thereunder accruing upon the death, disablement, or injury of the individual insured, the individual insured, or his or her executor or administrator, as the case may be, may maintain an action to recover those benefits from the person so receiving them.
V. Any device, scheme, or artifice designed to give the appearance of an insurable interest where there is no legitimate insurable interest violates this title and shall constitute insurance fraud.
Source.
2022, 144:1, eff. Jan. 1, 2023.