HOUSE BILL NO. 427
AS AMENDED BY HOUSE AMENDMENT NO. 2 AND SENATE AMENDMENT NO. 2
AN ACT TO AMEND TITLE 18 RELATING TO CORPORATE OWNED LIFE INSURANCE.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Section 2704(c), Title 18 of the Delaware code by redesignating existing subsection (c)(3) as subsection (c)(4), and by adding thereto a new subsection (c)(3), as follows:
"(3) Exclusive of (2) above, in the case of employees and retirees of a corporation, an interest of such corporation or of a trustee of a trust established by a corporation for such purpose, arising from the participation of such employees or retirees, or their eligibility to participate, in a welfare plan established and maintained by the corporation pursuant to the Federal Employee Retirement Income Security Act of 1974; and".
Section 2. Amend Section 2704, Title 18 of the Delaware Code by adding thereto a new subsection (e), as follows:
"(e) The existence of an insurable interest with respect to an insurance contract Issued for delivery in this State and procured or effected by any corporation incorporated in this State on its employees or retirees, as set forth in subsection (c)(3) above, shall be governed by the provisions of such subsection. An insurance contract so procured or effected, if delivered to the registered agent of the corporation at the address of its registered office in this State, shall be deemed to have been delivered in this State."
Section 3. Amend Section 2708, Title 18 of the Delaware Code by deleting the period (".") at the end of said section, substituting therein the phrase a semi-colon (";"), and adding at the end thereof, the following:
"(4) A corporation may effectuate such insurance upon any employee or retiree of such corporation who is a participant, or is eligible to participate, in a welfare plan established and maintained by such corporation pursuant to the Federal Employee Retirement Income Security Act of 1974. Such welfare or similar plan established by a corporation shall comport with any wellness plan regulations which may be issued by the Commissioner. The Commissioner shall, by regulation, ensure to the extent possible that the proceeds and benefits of such insurance shall be applied for the benefit of the plan participants. A corporation which receives funds as the beneficiary of insurance in connection with such welfare plan, or a trust established by a corporation in connection therewith, shall establish depository arrangements with a Delaware banking institution as may he appropriate with respect to such welfare plan and shall use its best efforts to direct securities transactions relating to such welfare plan, subject to best execution, through a securities agent licensed and located in this State. An insurer shall be entitled to rely upon all statements, declarations and representations made by a corporation relative to such welfare or similar plan comporting with such wellness plan regulations. This subsection shall not apply to corporations with less than 50 employees.
Section 4. Amend Section 4403(c), Title 18 of the Delaware Code by creating a new subsection (5), as follows:
"(5) Any life insurance policy or contract issued to a corporation, under which the corporation is the beneficiary of benefits payable on the lives of its employees or retirees."
Approved February 6, 1990.