TN 2 (10-05)
PS 01805.012 Georgia
A. PS 05-251 Irrevocable Assignment of Life Insurance for Funeral Expenses in Georgia
DATE: September 9, 2005
An SSI beneficiary residing in Georgia irrevocably assigned a life insurance contract to a funeral home on March 3,2005. This opinion discusses whether or not Georgia state law permits a life insurance contract to be irrevocably assigned. Relevant Georgia state statute only seeks to prevent insurance fraud and illegal competition between life insurance providers and funeral home operators. Once the contract has been executed Georgia state law permits the owner of the policy to assign the benefits to a funeral home irrevocably. Thus, an irrevocable assignment of a life insurance contract to a funeral home in the state of Georgia is valid.
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 death.
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