State RegulationsGA specificDifficulty 1/5
Under O.C.G.A. § 33-24-3(d), a Georgia corporation may have an insurable interest in an individual's life if the individual:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under O.C.G.A. § 33-24-3(d), a corporation has an insurable interest in individuals holding at least 10% of its issued shares and in its directors, officers, or employees whose death might cause the corporation financial loss. A former employee may be insured only to replace insurance being surrendered — never to add new coverage.
Why the other options are wrong
- A) A long-term employment contract is not the statutory test; the shareholder test and the potential financial loss test govern.
- C) A former employee's coverage may not be increased — it may only replace insurance being surrendered.
- D) Not every current employee qualifies; the death must be one that might cause the corporation financial loss.
Memory hook
Ten percent or a loss-causing role.