State RegulationsGA specificDifficulty 3/5
A Georgia corporation has maintained life coverage on a key employee who has now left the company. Under O.C.G.A. § 33-24-3(d), under what condition may the corporation continue to insure the former employee?
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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's insurable interest in a former employee is sharply limited: the former employee may be insured only to replace insurance being surrendered — that is, only in a continuation-of-coverage context, not to create new coverage. The corporation may not leverage a past employment relationship to write fresh insurance on someone whose death no longer threatens it with financial loss.
Why the other options are wrong
- A) The former-employee insurable interest is limited to replacing surrendered insurance; it is not open-ended.
- C) A consulting contract is not the statutory condition; the statute keys to replacing insurance being surrendered.
- D) Continuation of surrendered coverage is permitted, so an absolute ban overstates the rule.
Memory hook
Former employee: keep the old coverage, never grow new coverage.