Sec. 7.8. (a) As used in this chapter, "stranger originated life insurance" means a practice or plan to initiate a life insurance policy for the benefit of a third party investor who, at the time the life insurance policy is originated, has no insurable interest in the insured.
(b) The term includes the following:
(1) An arrangement under which, at the time of life insurance policy inception:
(A) a life insurance policy is purchased with resources or guarantees from or through a person that is not legally permitted to initiate the life insurance policy; and
(B) a written or verbal arrangement or agreement is made to transfer the ownership of the life insurance policy or policy benefits to a third party.
(2) A trust that is:
(A) created to give an appearance of the existence of an insurable interest; and
(B) used to initiate a life insurance policy for an investor.
As added by P.L.112-2008, SEC.3.