SENATE BILL No. 29
DIGEST OF INTRODUCED BILL
Citations Affected: IC 27-1-12-17.1.
Synopsis: Employer purchased insurance. Requires an employee's
written consent to an employer's purchase of life or disability insurance
covering the employee. Limits the amount payable under the life or
disability insurance to the amount of the employee's annual salary.
Effective: July 1, 2012.
January 4, 2012, read first time and referred to Committee on Insurance and Financial
Second Regular Session 117th General Assembly (2012)
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between statutes enacted by the 2011 Regular Session of the General Assembly.
SENATE BILL No. 29
A BILL FOR AN ACT to amend the Indiana Code concerning
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 27-1-12-17.1; (12)IN0029.1.1. -->
SECTION 1. IC 27-1-12-17.1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 17.1. (a) As used in this
section, "employee" includes a director, an officer, a partner, a
manager, a non-management employee, and a retired employee of the
employer or the employer's affiliates.
(b) As used in this section, "employer" means an individual, a
corporation, a partnership, a limited liability company, and any other
legal entity that has at least one (1) employee and is legally doing
business in Indiana. The term includes an association of employers and
the employer's affiliates.
(c) An employer that provides life insurance, health insurance,
disability insurance, retirement benefits, or similar benefits to an
employee of the employer has an insurable interest in the life of the
employee. The trustee of a trust established by an employer for the
benefit of the employer has the same insurable interest as the employer
in the life of an employee. The trustee of a trust established by an
employer that provides life insurance, health insurance, disability
insurance, retirement benefits, or similar benefits to an employee of the
employer and acts in a fiduciary capacity with respect to that employee
or the employee's dependents or beneficiaries has an insurable interest
in the life of the employee for whom benefits are to be provided.
(d) An employer or the trustee of a trust established by the employer
may acquire life or disability insurance upon an employee in whom
the employer or the trustee of the trust has an insurable interest as
determined under subsection (c) if the:
(1) employee consents to be insured; and
(2) total amount payable to the employer or trustee under the
life or disability insurance policy or contract does not exceed
an amount equal to the annual salary of the employee.
An employee consents to be insured if the employee
is provided written
notice of the insurance coverage and does not object provides, to the
employer or trustee, written consent to the life or disability
insurance coverage within thirty (30) days of receipt of the notice
before the life or disability insurance coverage is issued.
(e) An insurable interest must exist at the time the contract of life or
disability insurance becomes effective, but need not exist at the time
the loss occurs.
(f) Proceeds of a policy issued under this section are exempt from
the claims of the employee's creditors or dependents.