This section gives certain policy beneficiaries, owners, transferees, and assignees an insurable interest, but bars burial-business actors and covered care providers from having one unless an exception applies.
Sec. 1103.053. INSURABLE INTEREST OF BENEFICIARY, OWNER, TRANSFEREE, OR ASSIGNEE. (a) Except as provided by Subsection (b) or (c), a beneficiary or owner of a life insurance policy who is designated in accordance with this subchapter or an entity to which a life insurance policy or an interest, benefit, right, or title in a life insurance policy is transferred or assigned in accordance with this subchapter has, at all times after the designation, an insurable interest in the life of the individual who is insured under the policy. (b) An individual, partnership, association, corporation, or other legal entity that is directly or indirectly engaged in the business of burying the dead does not directly or indirectly have an insurable interest in the life of an individual unless the interest is established under other applicable statutory law or under common law. (c) Notwithstanding Section 1103.051, this subsection applies to a life insurance policy issued under Chapter 1101. A person providing care to an individual with a disability, including an intellectual disability, at a state supported living center, as defined by Section 531.002, Health and Safety Code, an assisted living facility licensed under Chapter 247, Health and Safety Code, an intermediate care facility licensed under Chapter 252, Health and Safety Code, or a group home, as defined by Section 591.003, Health and Safety Code, does not directly or indirectly have an insurable interest in the life of an individual unless the person is a relative of the individual. (d) In this section, "relative" means an individual who is related to the insured within the third degree by consanguinity or affinity as determined under Chapter 573, Government Code. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 2, eff. June 1, 2003. Amended by: Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.0225, eff. September 1, 2005. Acts 2025, 89th Leg., R.S., Ch. 245 (H.B. 1041), Sec. 1, eff. May 29, 2025.