Annuity contracts and life insurance policies; exemption from certain creditors' claims. (SB640)

Introduced By

Sen. Bill Stanley (R-Moneta)

Progress

Introduced
Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law

Description

Insurance policies and annuity contracts; exemption from creditors' claims. Provides that the cash surrender value or proceeds of any life insurance policy; the withdrawal value of an optional settlement, annuity contract, or deposit with a life insurance company; or any other benefit from such a policy, contract, or deposit shall not be liable to execution, attachment, garnishment, or other legal process in favor of any creditor of (i) the person whose life is insured by the related policy or contract; (ii) the person who is protected by that contract, deposit, indemnity, policy, or settlement, provided that such person is the insured or owner of the contract, deposit, indemnity, policy, or settlement or the spouse or intended spouse of, a dependent child of, or any other person dependent on the insured or owner of the contract, deposit, indemnity, policy, or settlement; (iii) the person who can, may, or will receive the benefit of such an item, if the person is the insured or owner of the contract, deposit, indemnity, policy, or settlement or the spouse or intended spouse of, a dependent child of, or any other person dependent on the insured or owner of the contract, deposit, indemnity, policy, or settlement; (iv) the person who owns the related contract, deposit, or policy; or (v) the person who effected the related contract, deposit, or policy. These exemptions from creditors' claims apply regardless of whether the right to change the beneficiary thereof is reserved or permitted or the insured person, the annuitant, the owner of the policy or contract, or the person effecting the policy or contract, or any of their estates, is a contingent beneficiary of the policy, contract, or deposit. These provisions do not apply (a) to any claim by a creditor with respect to a life insurance policy, annuity contract, or deposit with an insurance company that was taken out, made, or assigned in writing for the benefit of the creditor; (b) if the policy, contract, or deposit was paid with the intent to defraud creditors; or (c) to a policy, contract, or deposit issued or effected during the six months preceding the date that the person claiming the exemption files a voluntary petition in bankruptcy or is provided similar relief. Read the Bill »

Outcome

Bill Has Passed

History

DateAction
01/18/2016Presented and ordered printed 16103796D
01/18/2016Referred to Committee on Commerce and Labor
01/27/2016Impact statement from SCC (SB640)
02/15/2016Committee substitute printed 16104848D-S1
02/15/2016Reported from Commerce and Labor with substitute (15-Y 0-N) (see vote tally)
02/16/2016Constitutional reading dispensed (38-Y 0-N) (see vote tally)
02/16/2016Read second time
02/16/2016Reading of substitute waived
02/16/2016Committee substitute agreed to 16104848D-S1
02/16/2016Engrossed by Senate - committee substitute SB640S1
02/16/2016Constitutional reading dispensed (39-Y 0-N) (see vote tally)
02/16/2016Passed Senate (37-Y 0-N 2-A) (see vote tally)
02/17/2016Impact statement from SCC (SB640S1)
02/18/2016Placed on Calendar
02/18/2016Read first time
02/18/2016Referred to Committee on Commerce and Labor
02/23/2016Reported from Commerce and Labor (22-Y 0-N) (see vote tally)
02/24/2016Read second time
02/25/2016Read third time
02/25/2016Passed House BLOCK VOTE (99-Y 0-N)
02/25/2016VOTE: BLOCK VOTE PASSAGE (99-Y 0-N) (see vote tally)
02/25/2016Reconsideration of House passage agreed to by House
02/25/2016Passed House BLOCK VOTE (100-Y 0-N)
02/25/2016VOTE: BLOCK VOTE PASSAGE #2 (100-Y 0-N) (see vote tally)
02/26/2016Enrolled
02/26/2016Bill text as passed Senate and House (SB640ER)
02/26/2016Signed by Speaker
02/29/2016Impact statement from SCC (SB640ER)
02/29/2016Signed by President
03/01/2016Enrolled Bill Communicated to Governor on 3/1/16
03/01/2016G Governor's Action Deadline Midnight, March 8, 2016
03/07/2016G Approved by Governor-Chapter 274 (effective 7/1/16)

Video

This bill was discussed on the floor of the General Assembly. Below is all of the video that we have of that discussion, 1 clip in all, totaling 3 minutes.

Transcript

This is a transcript of the video clips in which this bill is discussed.

SENATE BILL 640, A BILL RELATING TO PROCEEDS AND AVAILS OF -- AND ANNUITY CONTRACTS AND LIFE INSURANCE POLICIES, CRIMES OF CREDITORS. REPORTED FROM THE COMMITTEE ON COMMERCE AND LABOR WITH A SUBSTITUTE. THE SENATOR FROM FRANKLIN, SENATOR STANLEY.

Sen. Bill Stanley (R-Moneta): THANK YOU, MR. PRESIDENT. I'M BACK. NOW MOVE THE COMMITTEE SUBSTITUTE BE AGREED TO SIR.

[Unknown]: THE QUESTION IS SHALL THE COMMITTEE SUBSTITUTE BE AGREED TO. ALL THROEFRS OF THE MOTION WILL SAY AYE. THOSE OPPOSED, NO. THE COMMITTEE SUBSTITUTE IS AGREED TO.

Sen. Bill Stanley (R-Moneta): I MOVE MOVE THAT WE ENGROSS AND ADVANCE THE BILL TO THE THIRD CONSTITUTIONAL READING.

Del. Bill Howell (R-Fredericksburg): THE QUESTION IS SHALL THE BILL BE ENGROSSED AND ADVANCED TO ITS THIRD READING ALL IN FAVOR SAY YEA. THOSE OPPOSED, NO. THE AYES HAVE IT. THE SENATOR FROM FRANKLIN. YOU'RE ON A ROLL, SENATOR.

[Unknown]: I'M A ROLL. MR. PRESENT, I NOW MOVE THAT WE DISPENSE WITH THE THIRD CONSTITUTIONAL READING.

Del. Bill Howell (R-Fredericksburg): THE QUESTION IS SHALL THE RULES BE SUSPENDED AND THE THIRD CONSTITUTIONAL READING BE DISSENSED WITH. ALL IN FAVOR OF THE MOTION WILL RECORD THEIR VOTES AYE, THOSE ARE THE SENATORS READY TO VOTE? OPPOSED NO. HAVE ALL THE SENATORS VOTED? DO ANY SENATORS DESIRE TO CHANGE THEIR VOTE? THE CLERK WILL CLOSE THE ROLL.

[Unknown]: AYES 39, NOS 0. AYES 39, NOS 0. THE MOTIONED AGREED TO. THE SENATOR FROM FRANKLIN. MR. PRESIDENT, I NOW MOVE THE BILL PASS AND SPEAKING TO THAT MOTION. THE SENATOR HAS THE FLOOR. MR. PRESIDENT, MEMBERS OF THE SENATE, SENATE BILL 640 RECORDS INSURANCE POLICIES AND THE PROTECTION OF INSURANCE PASSED UNANIMOUSLY OUT OF POLICIES. COMMERCE AND LABOR, AND BASICALLY WHAT THIS BILL DOES IS IT PROTECTS CERTAIN INSURANCE ANNUITIES AND THE CASH VALUE OF LIFE INSURANCE FROM CREDITORS, SO IF A PERSON -- A HUSBAND HAS A HEALTH -- OR LIFE INSURANCE POLICY TO THE BENEFIT OF HIS WIFE AND IF THERE'S ANY JUDGMENT, BUT THE WIFE AS BENEFICIARY, THEN UPON HIS DEATH, IT IS NOT SUBJECT TO TAKING BY A JUDGMENT CREDITOR OR ATTORNEYS OR ANYTHING ELSE, THAT IT PROTECTING CERTAINLY THE SPOUSE WITH THE LIFE INSURANCE POLICY. NOW, IN THAT BILL, IT DOES CARVE OUT EXEMPTIONS, LIKE PEOPLE WHO ARE TRYING TO DEFRAUD CREDITORS OR HAVE DECLARED BANKRUPTCY WITHIN A CERTAIN TIME, SO IT'S IN A VERY LIMITED WAY, WHAT WE'RE DOING IS CREATING A PROTECTED INSURANCE INSTRUMENT TO THE BENEFIT THAT WAS INTENDED IN A CASH VALUE ANNUITY, CASH VALUE LIFE INSURANCE CONTRACT, GOES TO THE PERSON WHO IS -- HAS EARNED IT AND IS NOT SUBJECT TO THE ERRORS OR THE MISDEEDS OF THE PERSON WHO ACTUALLY HAD THAT LIFE INSURANCE POLICY PREVIOUSLY. SO FOR THOSE REASONS, MR. PRESIDENT, I RENEW MY MOTION THAT SENATE BILL 640 PASS.

Del. Bill Howell (R-Fredericksburg): THANK YOU, SENATOR. THE QUESTION IS SHALL SENATE BILL 640 PASS. ALL IN FAVOR OF THE MOTION WILL RECORD THEIR VOTES AYE, THOSE ARE THE SENATORS READY TO VOTE? OPPOSED NO. HAVE ALL THE SENATORS VOTED? DO ANY SENATORS DESIRE TO CHANGE THEIR VOTE? THE CLERK WILL CLOSE THE ROLL.

[Unknown]: AYES 37, NOS 0.