Okla. Stat. tit. 36, § 36-3604

A. 1. Any individual of competent legal capacity may procure

or effect an insurance contract upon his or her own life or body for

the benefit of any person. Except as provided in subsection D of

this section, no person shall procure or cause to be procured any

insurance contract upon the life or body of another individual

unless the benefits under the contract are payable to the individual

insured or a personal representatives, or to a person having, at the

time when the contract was made, an insurable interest in the

individual insured.

2. In the absence of an agreement to the contrary, a policy

procured and owned by a corporation, partnership, association,

limited liability company, or other legal entity on the life or body

of an officer, director, manager, member, or employee, other than a

sole proprietor, upon the termination of the insurable interest, the

owner of the policy shall, if permitted by the terms of the policy,

offer to sell, transfer, or assign the policy to the insured in

exchange for the cash surrender value of the policy or, if there is

no cash value, in exchange for an amount equal to the total of any

premiums paid for the policy, minus any dividends received, plus

interest. This offer shall be made in writing to the insured after

termination of the insurable interest. The offer shall state the

time for acceptance which shall not be less than thirty (30) days

after receipt of the offer by the insured. If the insured rejects

the offer or fails to accept the offer in the time provided, the

owner of the policy may continue to own the policy subject to its

terms.

B. If the beneficiary, assignee, or other payee under any

contract made in violation of this section receives from the insurer

any benefits thereunder accruing upon the death, disability, or

injury of the individual insured, the individual insured or an

executor or administrator, as the case may be, may maintain an

action to recover such benefits from the person receiving them.

C. "Insurable interest" with reference to personal insurance

includes only interests as follows:

Oklahoma Statutes - Title 36. Insurance Page 770

1. In the case of individuals related closely by blood or by

law, a substantial interest engendered by love and affection;

2. In the case of other persons, a lawful and substantial

economic interest in having the life, health, or bodily safety of

the individual insured continue, as distinguished from an interest

which would arise only by, or would be enhanced in value by, the

death, disability, or injury of the individual insured;

3. An individual heretofore or hereafter party to a contract or

option for the purchase or sale of an interest in a business

partnership or firm, or of shares of stock of a closed corporation

or of an interest in such shares, has an insurable interest in the

life of each individual party to the contract and for the purposes

of the contract only, in addition to any insurable interest which

may otherwise exist as to the life of the individual;

4. A trustee of a trust, whenever established, shall be deemed

to have an insurable interest in:

a. the individual insured who established the trust,

b. each individual in whose life the owner of the trust

for federal income tax purposes has an insurable

interest, and

c. each individual in whose life a beneficiary of the

trust has an insurable interest; and the proceeds of

the life insurance policy are primarily for the

benefit of the trust beneficiaries having an insurable

interest in the life of the individual insured; and

5. a. An employer, or a trust which is sponsored by an

employer for the benefit of its employees, shall have

an insurable interest in each of the lives of the

employees, directors, or retired employees of the

employer. Notwithstanding paragraph 2 of subsection C

of this section or Section 4101 of this title, and

amendments thereto, the employer or trust may insure
he individual insured; and

5. a. An employer, or a trust which is sponsored by an

employer for the benefit of its employees, shall have

an insurable interest in each of the lives of the

employees, directors, or retired employees of the

employer. Notwithstanding paragraph 2 of subsection C

of this section or Section 4101 of this title, and

amendments thereto, the employer or trust may insure

the life of any employee, director, or retired

employee for the benefit of the employer or trust on

an individual or group basis only with the written

consent of the insured.

b. The consent requirement of Section 3607 of this title

shall be accomplished as follows:

(1) the employer shall notify the employee, director,

or retired employee by a written notice that the

employer or trust would like to obtain life

insurance coverage with respect to the person's

life, and

(2) if the employee, director, or retired employee

fails to provide written consent to the employer

or trust, the employer or trust shall not

purchase or obtain such insurance.

Oklahoma Statutes - Title 36. Insurance Page 771

c. It shall be unlawful for the employer or trust to

retaliate against any person for refusing to consent

to the issuance of insurance on the person.

d. The insurable interest of the employer or trust in

nonmanagement and retired employees shall be limited

to an amount agreed to by the employee or, in the

absence of an agreement, an amount of aggregate

projected death benefits commensurate with the

aggregate projected liabilities to the employee under

all employee welfare benefit plans, as defined in

Section 1002(1) of Title 29 of the United States Code.

Calculations of life insurance benefits and welfare

benefit liabilities shall be made in accordance with

generally accepted actuarial principles. Matching of

life insurance benefits and welfare benefit

liabilities may be done on cash flow, present value,

or other appropriate basis.

e. For purposes of this section:

(1) "employer" means any individual, sole

proprietorship, partnership, limited liability

company, corporation, or other legal entity that

is legally doing business in this state; the term

shall also include all entities or persons which

are controlled by or affiliated with any of the

foregoing. The determination of whether any

entity or person is controlled by or affiliated

with another shall be made by applying the

principles set forth in subsection (b) or (c) of

Section 414 of Title 26 of the United States

Code, as in effect on January 1, 1993, except

that all references therein to eighty percent

(80%) shall be changed to fifty-one percent

(51%), and

(2) “employee” means any common law employee of an

employer.

f. This section shall not be interpreted to limit other

insurable interests which may exist by statute or at

common law.

g. Determination of the existence and extent of the

insurable interest under any life insurance policy

shall be made at the time the contract of insurance

becomes effective, provided however, the insurable

interest need not exist at the time the loss occurs.

D. Life insurance contracts may be entered into in which the

person paying the consideration for the insurance has no insurable

interest in the life of the individual insured, where charitable,

benevolent, educational or religious institutions, or their

Oklahoma Statutes - Title 36. Insurance Page 772

agencies, are designated as the beneficiaries thereof. In no event

shall an individual be named as a beneficiary. In making these

contracts, the person paying the premium shall make and sign the

application therefor as owner and shall designate a charitable,

benevolent, educational, or religious institution, or an agency

thereof, as the beneficiary or beneficiaries of the contract. The

application or any subsequent change of beneficiary designation

shall be signed by the individual whose life is to be insured.
ng these

contracts, the person paying the premium shall make and sign the

application therefor as owner and shall designate a charitable,

benevolent, educational, or religious institution, or an agency

thereof, as the beneficiary or beneficiaries of the contract. The

application or any subsequent change of beneficiary designation

shall be signed by the individual whose life is to be insured.

These contracts shall be valid and binding among the parties,

notwithstanding the absence otherwise of an insurable interest in

the life of the individual insured.

E. Life insurance contracts may be entered into in which the

members of an alumni association of an institution of higher

education accredited by the Oklahoma State Regents for Higher

Education are insured under a group insurance policy and either the

institution is the designated beneficiary thereof or the association

is the designated beneficiary with the stipulation that the

association will use the proceeds of the policies for direct grants

to the institution or for scholarships for students of such

institutions. In no event shall an individual be named as a

beneficiary to such a policy. In making such contracts, the person

paying the premium shall make and sign the application therefor as

owner and shall designate an institution or alumni association as

the beneficiary or beneficiaries of such contract. The application

or any subsequent change of beneficiary designation shall be signed

also by the individual whose life is to be insured. These contracts

shall be valid and binding among the parties thereto,

notwithstanding the absence of an insurable interest in the life of

the individual insured.