Whether the owner of a life insurance contract in the state of Georgia can irrevocably
assign rights to the contract to a funeral home for payment of funeral expenses upon
For the reasons stated below, it is our opinion that this is a legal assignment of
a life insurance contract under the laws of the state of Georgia.
According to the information made available to us, on March 3, 2005, Social Security
beneficiary Ellen E. W~ executed an irrevocable "assignment of life insurance certificate
for funeral expenses" in favor of the Towns Funeral Home.
There is minimal statutory and case law on this subject. The relevant statute provides:
It shall be unlawful for any insurer writing any type of life insurance, by whatever
term described, upon the lives and citizens of this state to enter into any contract
with any funeral director or undertaker, providing that such funeral director or undertaker
shall conduct the funeral of persons insured by such insurer.
Ga. Code Ann. § 33-1-11 (2005).
As you noted in your correspondence, it would appear that this Georgia Code provision
would relate to an assignment of life insurance for funeral expenses. We contacted
the Georgia Insurance Commissioner's office for an interpretation of § 33-1-11. On
June 30, 2005, Steve S~, Senior Investigator, Consumer Services Division, responded
to our request regarding the State of Georgia's interpretation of § 33-1-11. In part,
Mr. S~ wrote:
The law is focused on the point at which the policy is applied for by the applicant
and issued to the insured/owner. It is at this point that agreements would likely
be reached between the insurer, insured and funeral provider that could limit the
insured or family members choice. After the policy is issued, however, the insured/owner
of the contract has and should have wide discretion on how the benefits of the contract
will be applied. . . . Nothing under the present code would preclude the owner from
assigning benefits to the funeral home and I am not aware of any law or means of preventing
the owner of making the assignment irrevocable. Certainly, a life insurance contract
is the private property of the insured and should be conferred in whatever manner
the owner of the policy desires. In this instance, the insurer is not and has not
entered into a contract with the funeral home but rather is being directed by their
insured after the policy was issued.
The State of Georgia is concerned with preventing insurance fraud and illegal competition
during the initial sale and execution of life insurance contracts by insurance providers
and funeral home operators. See Blackmon v. Gulf Life Ins. Co., 175 S.E. 798 (1934). After the execution of a life insurance contract, the individual
owner of the contract is allowed under Georgia law to assign the contract as noted
above. Thus, the irrevocable "assignment of life insurance certificate for funeral
expenses" by Ms. W~ to the Towns Funeral Home is valid.
The irrevocable "assignment of life insurance certificate for funeral expenses" by
Ms. W~ to the Towns Funeral Home is valid.
Deana R. E~
Regional Chief Counsel, Region VIII
Thomas S. I~
Assistant Regional Counsel