HB262 Alabama 2025 Session

Updated Feb 22, 2026

Low Interest

Summary

Primary Sponsor: Corley EllisRepresentative
Republican
Session: 2025 Regular Session
Title: Department of Insurance, internal Code of Alabama 1975 citations corrected
Summary: HB262 would fix incorrect internal citations in Alabama’s insurable interest and life insurance loan laws by updating Sections 27-14-3 and 27-15-8 to point to the correct Code of Alabama sections.
What This Bill Does
The bill makes editorial corrections to cross-references in the insurable interest law and the life insurance policy loan law, ensuring the cited Code sections match the actual referenced provisions. It preserves the existing substantive rules about who has an insurable interest (individuals, corporations, trusts, preneed arrangements, and charitable organizations) and how life insurance loans operate. The text includes retroactive language related to preneed contracts and limits on certain trust-held policies, but the overall content of insurable interest and loan provisions remains as currently written.

Who It Affects
Individuals purchasing life, health, or bodily-insurance policies (retains unlimited insurable interest in own life/health; beneficiaries and payees allowed).
Corporations and their directors, officers, employees, and subsidiaries (insurable interest in the life or ability of those individuals as described).
Trusts and trustees connected to corporate or employee benefit arrangements (insurable interest and fiduciary relationships maintained).
Preneed contract purchasers and beneficiaries (trusts or mechanisms established for preneed contracts; retroactive applicability for certain policies).
Charitable organizations that meet 501(c)(3) requirements (may own or purchase life insurance on individuals who consent; treated as having insurable interest).

Key Provisions
Provision 1: Amend Sections 27-14-3 and 27-15-8 to correct internal citations to the appropriate Code of Alabama 1975 sections, aligning references within insurable interest and life insurance loan contexts.
Provision 2: Retain and clarify existing insurable interest rules for individuals, corporations, trusts, preneed contract arrangements, and charitable organizations, including retroactive applicability for pre-2008 policies and related conditions as described in the bill.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Insurance