Crum v. Jackson National Life Insurance Company ( 2022 )

NOTICE: This opinion is subject to modification resulting from motions for reconsideration under Supreme Court
Rule 27, the Court’s reconsideration, and editorial revisions by the Reporter of Decisions. The version of the
opinion published in the Advance Sheets for the Georgia Reports, designated as the “Final Copy,” will replace any
prior version on the Court’s website and docket. A bound volume of the Georgia Reports will contain the final and
official text of the opinion.
In the Supreme Court of Georgia
Decided: October 25, 2022
S22Q0649. CRUM v. JACKSON NATIONAL LIFE INSURANCE
COMPANY.
PINSON, Justice.
This case comes to us from the United States Court of Appeals
for the Eleventh Circuit, which has certified questions to us about
Georgia life-insurance law. Those questions are set out below in full.
The basic question we need to answer is whether a person can
legally take out an insurance policy on his own life with the intent
to turn around and sell that policy to a third party who has no
“insurable interest” in the policyholder’s life. The person seeking to
recover on the life-insurance policy in this case says that such a
policy is legal if a third party was not involved in causing the policy
to be procured. The insurance company says that with or without
such third-party involvement, such a policy is an illegal wagering
contract and therefore void, relying on some of our case law. But as
it turns out, that case law was interpreting and applying old
statutes. In 1960, our General Assembly repealed those statutes and
replaced them with new statutory language that codified some, but
not all, of the old decisional law. See OCGA § 33-24-3. And the new
language, which remains materially the same today, does not even
hint at the unilateral-intent-based limitation that the insurance
company advances. So we answer the certified questions as follows:
under Georgia law, a life-insurance policy taken out by the insured
on his own life with the intent to sell the policy to a third party with
no insurable interest, but without a third party’s involvement when
the policy was procured, is not void as an illegal wagering contract.
1. Background
In 1999, Kelly Couch applied for a $500,000 life-insurance
policy from Jackson National Life Insurance Company. When he
applied, Couch told Jackson that he was healthy, but that was not
true. In fact, Couch knew that he was HIV-positive, which, in 1999,
meant that he had a greatly diminished life expectancy. He bought
2
the policy with the intent to sell it on the secondary “viatical
settlement” market.1 Eight months later, Couch did just that: a
brokerage agency that specialized in viatical settlements connected
Couch with Sterling Crum, who bought Couch’s insurance policy
knowing that Couch was HIV-positive and likely had only a few
years left to live.
Couch died in 2005, and years later, Crum made a claim to
Jackson for the death benefit under Couch’s policy. Jackson denied
the claim and filed a declaratory-judgment action in the U.S.
District Court for the Northern District of Georgia, seeking a
declaration that the policy was void ab initio under Georgia law as
an illegal human-life wagering contract, and that laches barred
1 A viatical settlement is an arrangement in which a person, usually with
a terminal illness, sells a life insurance policy to a third party for less than its
mature value to obtain funds that the insured can use while alive. Such
settlements were common in the 1980s and 1990s for people who were HIV-
positive. See Jackson Natl. Life Ins. Co. v. Crum, 25 F4th 854, 857 (11th Cir.
2022). Early on, many of these policies were legitimate, because the person had
acquired the policy when healthy, without any fraud. See id. Later, as investor
demand rose, some people who already had HIV worked with insurance
brokers to market policies they procured fraudulently after having received an
HIV diagnosis. See id.
3
Crum’s claim.2
After a bench trial, the district court agreed with Jackson that
the policy was an illegal wagering contract. The court found that
Couch bought the policy without Crum’s involvement, but with the
intent to sell it in the near future to someone without an insurable
interest. See Jackson Natl. Life Ins. Co. v. Crum, No. 1:17-cv-03587-
WMR, 2020 WL 12968089, at *9 (N.D. Ga. Mar. 2, 2020). The court
acknowledged that Georgia’s statute addressing insurable interests
in the context of life insurance did not appear to prohibit such a
policy without the involvement of a third party at the time the policy
was issued. Id. at *5, *7 (citing OCGA § 33-24-3 (b), (i)). But the court
concluded that our case law treated such policies as illegal wagering
contracts, see id. at *6–*7, and so it declared the policy void ab initio.
Crum appealed to the Eleventh Circuit. He contended that the
district court erred in declaring the policy void ab initio based on
2It appears that Jackson could not deny Crum’s claim based on any
“misrepresentation or nondisclosure of a material fact” in Couch’s application
because the policy contained an incontestability clause that allowed denials on
such grounds only for a period of two years from the date the policy went into
force.
4
only Couch’s unilateral intent to sell the policy soon after he bought
it. In Crum’s view, Georgia law requires “the knowing and direct
involvement of an identified third-party beneficiary at the time of
the initial procurement of the policy” to find a policy void ab initio
as an illegal wager on a human life. Jackson Natl. Life Ins. Co. v.
Crum, 25 F4th 854, 856–857 (11th Cir. 2022). The Eleventh Circuit,
however, opined that Georgia case law did not definitively answer
the question these arguments raised. So the Eleventh Circuit
certified the following two questions to this Court:
1. When an insured has purchased a life insurance
policy with the intent to sell the policy to a third party
with no insurable interest, must either the subsequent
purchaser or an intermediary[] be complicit in the
procurement of the policy before the latter can be deemed
to be an illegal wagering contract and thus void ab initio?
2. If the answer to the above question is neither an
absolute “Yes” or “No,” but instead is a response that a
life insurance policy can sometimes be deemed to
constitute an unlawful wagering contract even without
the complicity of the described third party, then we
respectively [sic] seek further guidance as to the
circumstances that determine when the policy is void ab
initio and when it is not.
Id. at 863 (footnote omitted).
5
2. Analysis
We address these certified questions in three steps. We start
by explaining why these questions about whether a life-insurance
policy is an illegal wagering contract are generally resolved by
determining whether they meet the statutory insurable-interest
requirement. Next, we review the statute that imposes that
requirement, the language of which—and this is not disputed—does
not prohibit buying insurance on one’s own life with the unilateral
intent to sell the policy to a third party with no insurable interest.
Finally, we address our cases interpreting prior versions of that
statute, and we conclude that none of that decisional law warrants
a different reading of the current statute.
(a) The first point to square away is that the question whether
a life-insurance policy is an illegal wagering contract is answered by
applying our statutes that govern life-insurance policies. Although
our legislature has deemed “[w]agering contracts” contrary to public
policy and unenforceable as a general matter, OCGA § 13-8-2 (a) (4),
the prohibition against wagering contracts in the context of life
6
insurance has been incorporated into a specific statutory
requirement: the “insurable interest” rule. See OCGA § 33-24-3.
Application of that rule, and not any broader foray into public policy
untethered from this statute, must guide the analysis.
This conclusion follows from the history of insurance-based
gambling and the law’s response to it. Using life-insurance policies
to “wager” on human lives is not a new practice. In the eighteenth
century, it became popular in England to buy insurance on the lives
of strangers—for example, elderly celebrities, or defendants being
tried for capital crimes—as a form of gambling. See PHL Variable
Ins. Co. v. Bank of Utah, 780 F3d 863, 867 (8th Cir. 2015), as
corrected (Mar. 17, 2015) (noting the “popular [18th-century]
English gambling activity” of “using insurance to bet on strangers’
lives”); Peter Nash Swisher, The Insurable Interest Requirement for
Life Insurance: A Critical Reassessment, 53 DRAKE L. REV. 447, 481
(2005). These policies were considered gambling bets, not insurance
against any risk of loss, because those who bought this “insurance”
had no interest in the underlying “asset,” i.e., the life at stake. See,
7
e.g., Conn. Mut. Life Ins. Co. v. Schaefer, 94 U.S. 457, 460 (24 LEd
251) (1877) (defining “mere wager policies” as “policies in which the
insured party has no interest whatever in the matter insured, but
only an interest in its loss or destruction”). See also Hardin v. NBC
Universal, Inc., 283 Ga. 477, 479 (660 SE2d 374) (2008) (defining a
“gambling or wagering contract” as “one in which the parties in
effect stipulate that they shall gain or lose upon the happening of an
. . . event in which they have no interest except that arising from the
possibility of such gain or loss” (quoting Martin v. Citizens’ Bank of
Marshallville, 177 Ga. 871, 874 (171 SE 711) (1933))).
Disapproval of these human-life wagers goes back almost as
far. Describing the practice of selling insurance on lives in which the
insured had no interest as having “introduced a mischievous Kind
of Gaming,” the British Parliament passed a law in 1774 to
“[r]emedy” the problem. Life Assurance Act, 1774, 14 Geo. 3, c. 48,
Preamble, § 1 (Eng.). That remedy was straightforward: the law
forbade anyone from taking out insurance on a life if the person “for
whose Use, Benefit, or on whose Account such Policy or Policies shall
8
be made” had no “[i]nterest” in the life, and it declared “null and
void” any policy that violated that rule. Id. at § 1.3 Put simply, if
someone wanted to take out insurance on another person’s life, she
had to have an interest of some sort in that life beyond the payout
she would get at its end.
That rule is now known as the “insurable interest” rule, and it
has become central to modern insurance, including life insurance in
Georgia. See Ga. Farm Bureaus Mut. Ins. Co. v. Franks, 320 Ga.
App. 131, 134 (1) (a) (739 SE2d 427) (2013) (citing Woods v. Indep.
Fire Ins. Co., 749 F2d 1493, 1496 (11th Cir. 1985)). See also J.
3The statute read in relevant part as follows:
Whereas it hath been found by Experience, that the making
Insurances on Lives, or other Events, wherein the Assured shall
have no Interest, hath introduced a mischievous Kind of Gaming:
For Remedy whereof, be it enacted by the King’s most Excellent
Majesty, by and with the Advice and Consent of the Lords Spiritual
and Temporal, and Commons, in this present Parliament
assembled, and by the Authority of the same, That from and after
the passing of this Act, no Insurance shall be made by any Person
or Persons, Bodies Politick or Corporate, on the Life or Lives of any
Person or Persons . . . wherein the Person or Persons for whose
Use, Benefit, or on whose Account such Policy or Policies shall be
made, shall have no Interest, or by way of Gaming or Wagering;
and that every Assurance made, contrary to the true Intent and
Meaning hereof, shall be null and void, to all Intents and Purposes
whatsoever.
Life Assurance Act, 1774, 14 Geo. 3, c. 48, Preamble, § 1 (Eng.)
9
STEPHEN BERRY, GEORGIA PROPERTY AND LIABILITY INSURANCE LAW
§ 3.1 (Aug. 2022 update). The general idea behind this rule is that a
valid life-insurance policy needs some “reasonable ground . . . to
expect some benefit or advantage from the continuance of the life of
the assured,” or else the contract is “a mere wager, by which the
party taking the policy is directly interested in the early death of the
assured.” Warnock v. Davis, 104 U.S. 775, 779 (26 LEd 924) (1882).
See also Franks, 320 Ga. App. at 134 (1) (a) (“Insurable interest is a
keystone of the concept of insurance, safeguarding the insurer
against the risk that arises if one who will receive the monetary
benefit from loss of the insured property (or life, [in the case of life
insurance]) has no interest in the property not being destroyed.”
(quoting Woods, 749 F2d at 1496)).
For our purposes, the key takeaway is that, in Georgia as
elsewhere, “[t]he statutory requirement of insurable interest was
intended to prevent wagering on human lives.” Wood v. N.Y. Life
Ins. Co., 255 Ga. 300, 303 (336 SE2d 806) (1985) (citation omitted).
See also Equitable Life Assur. Co. of U. S. v. Paterson, 41 Ga. 338,
10
363 (1870) (“The law prohibiting the insurance of a life by another,
who has no interest in the continuance of that life, is founded in a
sound public policy. It is intended to prevent gaming policies, and to
avoid that inducement to crime which would exist if it were
permitted.” (citing Irvin’s Code Rev. 1868 § 2776)). In other words,
in the life-insurance context, our law generally relies on the
insurable interest to distinguish between valid life-insurance
policies and illegal wagering contracts. See Paterson, 41 Ga. at 363;
Hodge v. Ellis, 76 Ga. 272, 277 (1886) (having an “insurable interest
in the life . . . drew from that interest in the policy the sting of a
wagering policy or an appearance of something like it”); Natl. Life &
Acc. Ins. Co. v. Hankerson, 49 Ga. App. 350, 351 (175 SE 590) (1934)
(rejecting argument that “no insurable interest in the plaintiff being
shown, the policy was a wagering contract” because the beneficiary
in question was a second cousin, which was enough to show an
insurable interest). See also Warnock, 104 U.S. at 779 (describing an
“insurable interest” as something that “take[s] the contract out of
the class of wager policies”); Schaefer, 94 U.S. at 460 (describing an
11
insurable interest as “necessary, in order to take a policy out of the
category of mere wager”). That means questions about whether a
life-insurance policy is an illegal wagering contract, like those
certified to us here, are addressed by turning to the relevant
insurable-interest statute.
(b) In the context of life insurance, Georgia has had a statutory
insurable-interest rule in one form or another dating back to the
nineteenth century. See Code Ann. 1933 § 56-901; Code Ann. 1926
§ 2496; Code Ann. 1910 § 2496; Code Ann. 1895 § 2114; Code Ann.
1882 § 2818; Irvin’s Code 2d ed. 1873 § 2818; Irvin’s Rev. Code 1868
§ 2776; Irvin’s Rev. Code 1867 § 2776; Code Ann. 1860 § 2768. The
relevant statute in effect at the time the policy was taken out
generally defines an insurable interest in a life as “an interest based
upon a reasonable expectation of pecuniary advantage through the
continued life . . . of another person and consequent loss by reason
of such person’s death . . . or a substantial interest engendered by
love and affection in the case of individuals closely related by blood
12
or by law.” OCGA § 33-24-3 (a) (1995).4 Put more simply, a person
has an insurable interest in the life of another if he can reasonably
expect to be better off financially if the life continues, and worse off
if it ends (or, in the case of close relations, if he has an interest in
the life continuing based on love and affection). Further, “an
individual has an unlimited insurable interest in his or her own life.”
Id. § 33-24-3 (b).
The statute also sets the rules about who must have insurable
interests, and when. First, the rules about who: If a person takes out
a policy on his own life, that person’s “unlimited insurable interest”
in his own life is enough; that person “may lawfully take out a policy
of insurance on his own life . . . and have the policy made payable to
whomsoever such individual pleases, regardless of whether the
beneficiary designated has an insurable interest” too. Id. § 33-24-3
(b) (1995). On the other hand, if a life-insurance policy is “procured
4 The current version of OCGA § 33-24-3 is materially the same in all
respects relevant to the certified questions here. This statute covers all
“personal insurance,” but we train our attention here and throughout this
opinion on the language specific to life insurance, which is included as a subset
of personal insurance in this article of the Code.
13
or caused to be procured upon another individual,” the person to
whom “the benefits under the contract are payable” must have “an
insurable interest in the individual insured,” or the policy is “void.”
Id. § 33-24-3 (e) (1995).5 Second, the rules about when: The insurable
interest “must exist at the time the contract of [life] insurance
becomes effective but need not exist at the time the loss occurs.” Id.
§ 33-24-3 (d) (1995). And it follows from this timing rule that a life-
insurance policy that meets the above insurable-interest rules at the
time it becomes effective may be assigned later to someone without
an insurable interest, subject to the policy’s terms. See OCGA § 33-
24-17.
(c) We can now turn to the certified questions. For reasons we
5 In full, OCGA § 33-24-3 (e) (1995) (now OCGA § 33-24-3 (i)) says:
Any personal insurance contract procured or caused to be procured
upon another individual is void unless the benefits under the
contract are payable to the individual insured or such individual's
personal representative or to a person having, at the time when
the contract was made, an insurable interest in the individual
insured. In the case of a void contract, the insurer shall not be
liable on the contract but shall be liable to repay to the person or
persons who have paid the premiums all premium payments
without interest.
14
will note below, we reframe the main question as follows: is a life-
insurance policy an illegal wagering contract if the insured takes out
the policy on his own life with the intent to sell the policy to a third
party with no insurable interest, but without a third party’s
involvement in causing the policy to be procured? To answer this
question, we look to the language of the insurable-interest statute
in effect at the time the policy was issued and the context of that
statute, which here includes statutory history and the decisional law
interpreting prior versions of the statutory insurable-interest rule.
See Seals v. State, 311 Ga. 739, 740 (1) (860 SE2d 419) (2021) (“The
primary determinant of a text’s meaning is its context, which
includes the structure and history of the text and the broader
context in which that text was enacted, including statutory and
decisional law that forms the legal background of the written text.”
(citation and punctuation omitted)).
(i) We start with the text of OCGA § 33-24-3 (1995). As the
Eleventh Circuit recognized, nothing in the language of that statute,
which we just reviewed, prohibits a policy taken out by an insured
15
with the unilateral intent at that time to sell it to someone without
an insurable interest. The statute is clear that a person “may
lawfully take out a policy of insurance on his own life” because a
person has an “unlimited insurable interest in his or her own life.”
Id. § 33-24-3 (b) (1995). Nothing in this language excludes from that
broad approval a person who secretly “intends” to turn around and
sell the policy to someone without an insurable interest. To the
contrary, the statute allows a person taking out a policy on his own
life to designate as a beneficiary “whomsoever such individual
pleases, regardless of whether the beneficiary designated has an
insurable interest,” id., even though the person taking out such a
policy would necessarily have an “intent” to designate that
beneficiary at the time he or she took out the policy.
Nor does the language of the statute’s prohibition against
policies taken out on the life of another have anything to say about
someone with the unilateral intent to sell a policy on their own life
to a third party. Under OCGA § 33-24-3 (e) (1995), a life-insurance
policy “procured or caused to be procured upon another individual is
16
void unless the benefits under the contract are payable to” someone
with an insurable interest in the life. But if no third party was
involved when the policy was taken out, the policy could not have
been “procured or caused to be procured upon another individual.”
Id. (emphasis added).
(ii) Jackson does not even try to argue that the language of the
insurable-interest statute applies. Instead, it relies on case law that
predates the current insurable-interest statute. Jackson calls this
case law “longstanding common law,” and it says that this “common
law” independently prohibits, as illegal wagering contracts, policies
taken out by someone on his own life with the intent to sell them to
a third party who has no insurable interest in the life.
Jackson is mistaken about the nature and import of this case
law. The cases Jackson cites are not part of the body of common law
from England that our General Assembly adopted in the late
eighteenth century. See Lathrop v. Deal, 301 Ga. 408, 412 n.9 (II)
(A) (801 SE2d 867) (2017) (“In 1784, our General Assembly adopted
the statutes and common law of England as of May 14, 1776, except
17
to the extent that they were displaced by our own constitutional or
statutory law. That adoption of English statutory and common law
remains in force today.” (citations omitted)). Instead, they are part
of a body of decisional law that interprets and applies Georgia
statutes dealing with insurable interests. See, e.g., Chapman v.
Lipscomb-Ellis Co., 194 Ga. 640, 643 (22 SE2d 393) (1942)
(interpreting Code Ann. 1933 § 56-901 and § 56-903); Ancient Ord.
United Workers v. Brown, 112 Ga. 545, 548–549 (37 SE 890) (1901)
(citing Union Fraternal League v. Walton, 109 Ga. 1, 3 (34 SE 317)
(1899), in interpreting Code Ann. 1895 § 2114 and § 2116); Walton,
109 Ga. at 3 (interpreting Code Ann. 1895 § 2114 and § 2116); Exch.
Bank v. Loh, 104 Ga. 446, 466 (31 SE 459) (1898) (interpreting Code
Ann. 1895 § 2114).
This distinction is significant in light of the statutory history
of the insurable-interest rules for life insurance. From the late
nineteenth century until 1960, two Georgia statutes touched on
insurable interests for life insurance: one statute, which defined a
contract of life insurance, imposed the basic insurable-interest rule
18
from the English common law. See Code Ann. 1895 § 2114 (defining
a life-insurance contract as “a contract by which the insurer, for a
stipulated sum, engages to pay a certain amount of money if another
dies within the time limited by the policy,” and explaining that “[t]he
life may be that of the assured, or of another in whose continuance
the assured has an interest” (emphasis added)); Code Ann. 1910
§ 2496 (same); Code Ann. 1926 § 2496 (same); Code Ann. 1933 § 56-
901 (same). Another said that a person who took out a policy on his
own life could make it payable “to his personal representative, or to
his widow, or to his children, or to his assignee.” Code. Ann. 1895
§ 2116. See Code Ann. 1910 § 2498 (same); Code Ann. 1926 § 2498
(same); Code Ann. 1933 § 56-903 (same). The language of these
statutes remained materially the same over this period, and cases
came to us that required us to apply and interpret that language.
The resulting decisional law from our Court filled in the contours of
these basic rules.
But then, in 1960, the statutes that this decisional law had
interpreted and applied—and indeed all statutes addressing life
19
insurance—were “repealed in their entirety.” Ga. L. 1960, pp. 754–
764, § 2. In their place, the General Assembly passed a new and
comprehensive Insurance Code “to revise, classify, consolidate, and
supersede the present laws relating to insurance and to establish[]
new laws relating thereto.” Id. at p. 289. For the statutes dealing
with insurable interests for life insurance, this was no mere
consolidation or restyling effort. After repealing the old statutes, the
General Assembly did not reenact the same or materially identical
language from those statutes. Instead, it replaced the basic
insurable-interest rules from the prior statutes with expanded rules
that codified some of our Court’s decisional law interpreting and
applying those rules—much of which had been cited in annotations
accompanying the old statutes. Compare, e.g., Rylander v. Allen, 125
Ga. 206, 209 (53 SE 1032) (1906) (“Beyond all controversy a man has
an insurable interest in his own life, and we fail to see, when having
that interest he enters into a contract with an insurer. . . why he
who is most interested, whether actuated by ties of relationship,
motives of friendship, gratitude, sympathy or love, may not make
20
the object of his consideration the recipient of his own bounty.”);
Turner v. Davidson, 188 Ga. 736, 739 (4 SE2d 814) (1939) (“As a
general rule, a reasonable expectation of pecuniary gain or
advantage through the continued life of another person, and
consequent loss by reason of his death, creates an insurable interest
in the life of such person.”); and Wimbush v. Lyons, 203 Ga. 273, 273
(1) (46 SE2d 138) (1948) (“A man has an unlimited insurable interest
in his own life, and may ordinarily take out a policy of insurance
upon his own life and make it payable to whomsoever he pleases,
regardless of whether the beneficiary has an insurable interest in
his life.”) with OCGA § 33-24-3 (a) (1995) (“An insurable interest,
with reference to personal insurance, is an interest based upon a
reasonable expectation of pecuniary advantage through the
continued life, health, or bodily safety of another person and
consequent loss by reason of such person’s death or disability or a
substantial interest engendered by love and affection in the case of
individuals closely related by blood or by law.”); id. § 33-24-3 (b)
(1995) (“An individual has an unlimited insurable interest in his or
21
her own life, health, and bodily safety and may lawfully take out a
policy of insurance on his own life, health, or bodily safety and have
the policy made payable to whomsoever such individual pleases,
regardless of whether the beneficiary designated has an insurable
interest.”). The result was the statutory framework for insurable
interests that now appears at OCGA § 33-24-3.6
This statutory history tells us how to address the decisional
law interpreting the old insurable-interest statutes. Because the
General Assembly repealed those statutes and chose not to reenact
materially similar language, we cannot read the new statutes as
having incorporated the body of decisional law that interpreted the
old statutory language, at least not wholesale. Cf. Olevik v. State,
302 Ga. 228, 236–237 (2) (c) (i) (806 SE2d 505) (2017) (in the context
6 The version of OCGA § 33-24-3 that was in force in 1999 is materially
the same, in all respects relevant to the questions here, as the version of that
statute enacted as part of the Insurance Code of 1960. Compare Ga. L. 1960,
pp. 657–658, § 56-2404, with OCGA § 33-24-3 (1995). The provisions of the
current statute that define insurable interests in specific contexts, such as with
respect to trustees, corporations, shareholders of corporations, non-corporation
business associations, and charitable institutions, were added after 1999. See
OCGA § 33-24-3 (c), (d), (f), (g), (j).
22
of constitutional interpretation, applying the prior-construction
canon, which says that when language is enacted that had received
an authoritative or definitive construction by a jurisdiction’s court
of last resort, that language is understood according to the prior
construction (citing ANTONIN SCALIA & BRYAN A. GARNER, READING
LAW: THE INTERPRETATION OF LEGAL TEXTS 322–326 (2012))). To the
contrary, we must presume that the significant changes to this
statutory language connote a change in meaning. See Jones v. Peach
Trader Inc., 302 Ga. 504, 514 (III) (807 SE2d 840) (2017) (“[C]hanges
in statutory language generally indicate an intent to change the
meaning of the statute.” (citation and punctuation omitted)); SCALIA
& GARNER 256–257 (explaining the reenactment canon, which
provides that “a change in the language of a prior statute
presumably connotes a change in meaning” where the changes are
not merely “stylistic or nonsubstantive”). Further, we presume that
the legislature enacted the new statute “with full knowledge of” the
extant body of decisional law. Dove v. Dove, 285 Ga. 647, 649 (680
SE2d 839) (2009). So, in these particular circumstances—where the
23
General Assembly, in a comprehensive effort, stitched together a
new statutory scheme using only pieces of the extant body of
decisional law on the subject—the most reasonable inference is that
the legislature accepted the rules of decisional law that it codified
and rejected those rules it did not. See Johns v. Suzuki Motor of
America, Inc., 310 Ga. 159, 164 (3) (850 SE2d 59) (2020) (“There is
no question that statutes can displace decisional law.”); Betts v.
Brown, 219 Ga. 782, 787 (136 SE2d 365) (1964) (declining to follow
decisional law “entered into prior to the effective date of the Georgia
Insurance Code” because “what was there held as to the insured’s
lack of interest in that contract and consequent inability to sue the
insurer for breach thereof was not with the aid of the above
mentioned Insurance Code provisions, which recognize the interest
of the insured in the credit life insurance contract”). In short, if any
of our body of decisional law interpreting the old statutes informs
the meaning of the new Code, it is because a rule from particular
decisional law was codified in the new Code.
(iii) So, we are back where we started: the language of OCGA
24
§ 33-24-3 (1995). We have already explained (and again, no one
disputes) that the statute’s language on its face does not contain the
intent-based limitation that Jackson asks us to recognize—that is,
that a policy taken out by someone on her own life with the intent to
sell it to a third party who has no insurable interest in the life is void
as an illegal wagering contract.
Moreover, a comparison of the decisional law on which Jackson
relies with the statute confirms that this limitation, if it ever
existed, did not survive the 1960 Insurance Code. That decisional
law comprises a line of cases that dealt with questions about when
someone could take out a policy on his own life and either assign it
to or name as beneficiary someone without an insurable interest.
The rule those cases settled on was, in short, that someone who
procured insurance on his own life could assign the policy to another,
who had no insurable interest in the life of the insured, “provided it
be not done by way of cover for a wager policy.” Rylander, 125 Ga. at214–215 (citation omitted). See Clements v. Terrell, 167 Ga. 237, 243
(145 SE 78) (1928); Quillian v. Johnson, 122 Ga. 49, 56–57 (49 SE
25801) (1905); Walton, 109 Ga. at 6; Loh, 104 Ga. at 465. The parties
dispute how broad the “cover for a wager policy” proviso to this rule
was. Crum says the cases prohibited only a kind of strawman
scheme, in which the insured takes out the policy on his own life as
a strawman for a third party who was the true beneficiary from the
outset. See Walton, 109 Ga. at 4–5, 7 (“The true rule . . . is[] that one
may insure his life and make the amount of the policy payable to
whom he pleases, provided the contract is not made at the expense
and for the benefit of the person designated as the beneficiary, as a
cover for a mere wagering contract”; “a policy issued to one upon his
own life, if he be merely the agent of another who is without interest,
for whose benefit the insurance is thus taken, although upon the
face of it it is payable to such person, is void”; “[b]ut if the insurance
is effected by some other person, it is essential that he have a
pecuniary interest in the life of the assured.” (citations omitted;
emphasis added)); Rylander, 125 Ga. at 211, 216–217 (explaining
the “cover for a wager policy” proviso as preventing one from “do[ing]
indirectly what the law prohibits him from doing directly”; because
26
it was “unlawful for a person to effect insurance upon the life of
another in the continuance of whose life he has no interest, . . . the
issue of a policy to one who has an insurable interest, and its
immediate assignment, pursuant to a preconceived intent, to one
without such interest, who undertakes to pay the premiums for his
chance of profit upon his investment, is ineffective, and such an
assignment is void” (emphasis added)). Jackson says the cases also
prohibited taking out a policy on one’s own life even with the
unilateral intent to turn around and sell it to an as-yet-unidentified
third party. See Clements, 167 Ga. at 243 (“A person may in good
faith and without fraud, collusion, or an intent to enter into a
wagering contract, lawfully take out a policy of insurance on his own
life and make the same payable to whomsoever he pleases, either
himself or his estate or a third person, regardless of whether or not
the latter has an insurable interest.” (quoting 37 C.J. 389, § 53b;
emphasis added)). Crum’s view is more firmly grounded in the
decisional law than Jackson’s, which places great weight on what
appears to be dicta and language taken out of context. See Crum, 25
27
F4th at 860 (describing language in Clements as “dictum”).
But we need not decide who is right. Whatever the breadth of
the “no cover for a wager policy” proviso in that decisional law, the
broader version that Jackson relies on finds no purchase in the
language of the current statute. Indeed, the language of OCGA § 33-
24-3 (b) (1995) looks a lot like the language of the rule as set out in
Jackson’s key case, Clements, 167 Ga. 237—but without the
language Jackson says supports its version of the rule. Compare id.
at 243 (“A person may in good faith, and without fraud, collusion, or
an intent to enter into a wagering contract, lawfully take out a policy
of insurance on his own life and make the same payable to
whomsoever he pleases, either himself or his estate or a third
person, regardless of whether or not the latter has an insurable
interest; insured has an unlimited insurable interest in his own life
which is sufficient to support the policy.” (emphasis added; citation
omitted)) with OCGA § 33-24-3 (b) (1995) (“An individual has an
unlimited insurable interest in his or her own life, health, and bodily
safety and may lawfully take out a policy of insurance on his own
28
life, health, or bodily safety and have the policy made payable to
whomsoever such individual pleases, regardless of whether the
beneficiary designated has an insurable interest.”).7 And the
language of subsection (e) indicates that the new statute carried
forward nothing more broad than the “strawman” version of the
“cover for a wager policy” proviso, because that subsection
necessarily implies the existence of a third party who has “procured
or caused to be procured” a policy on “another individual.” OCGA
§ 33-24-3 (e) (1995) (deeming “void” any life insurance contract
“procured or caused to be procured upon another individual” if the
benefits under the policy are not payable to the individual insured
or someone with an insurable interest (emphasis added)).8 See also
7 In addition to relying on the decisional law’s language about the
insured’s “intent,” Jackson suggests that its intent-based restriction is implicit
in the decisional law’s references to “good faith.” But OCGA § 33-24-3 (1995)
does not carry forward any reference to “good faith.” And the new Insurance
Code also failed to carry forward earlier statutory language imposing on the
insured a requirement that “[e]very application for insurance must be made in
the utmost good faith.” Ga. L. 1867, p. 530, § 2760. See Code Ann. 1933 § 56-
820 (same); Code Ann. 1926 § 2479 (same); Code Ann. 1910 § 2479 (same); Code
Ann. 1895 § 2097 (same).
8 This provision, written in passive voice, does not distinguish between
an intermediary—such as a viatical settlement broker—and a subsequent
29
PHL Variable Ins. Co. v. Price Dawe 2006 Ins. Tr., ex rel. Christiana
Bank & Tr. Co., 28 A3d 1059, 1076 (II) (E) (Del. 2011) (interpreting
a materially identical provision and concluding that the “relevant
inquiry” was not “the insured’s subjective intent for procuring a life
insurance policy” but “who procured the policy and whether or not
that person meets the insurable interest requirements”). In these
circumstances—where the legislature repealed the old statutes that
the body of decisional law had interpreted, codified some of that
decisional law, and omitted from the new statutes any mention of
the broader prohibition that Jackson seeks to rely on—we must
reject the argument that Jackson’s preferred rule survived the
enactment of the 1960 Insurance Code. Cf. Lathrop, 301 Ga. at 440–
441 (III) (C) (considering past decisional law addressing official
immunity as “important context for a proper understanding” of
constitutional amendment codifying official immunity where that
purchaser. Anyone who “caused” the policy to be procured on the life of another
would be subject to OCGA § 33-24-3 (e) (1995). See Crum, 25 F4th at 863 n.11
(noting that our “answer concerning an intermediary” could be relevant to
other issues in the federal court case).
30
provision “look[ed] a lot like that body of extant decisional law”);
Atlantic Specialty Ins. Co. v. City of College Park, 313 Ga. 294, 300–
301 (2) (869 SE2d 492) (2022) (explaining that a statutory
amendment creating an automatic waiver of sovereign immunity up
to a specified amount necessarily displaced prior law about waivers
up to that specified amount, but did not displace decisional and
statutory law for waivers above the specified amount).
3. Conclusion
For the reasons set out above, we answer the certified
questions as follows: under Georgia law, a life-insurance policy
taken out by the insured on his own life with the intent to sell the
policy to a third party with no insurable interest, but without a third
party’s involvement when the policy was procured, is not void as an
illegal wagering contract.9 In light of this answer, we need not
9 We note that implicit in the Eleventh Circuit’s first certified question
as originally posed is the suggestion that a policy would be void as an illegal
wagering contract if, at the time the policy was procured, a third party was
“complicit in the procurement of the policy.” Crum, 25 F4th at 863. Under the
plain language of OCGA § 33-24-3 (e) (1995), that generally would be true if a
third party has “caused” the insured to procure a policy on his own life and
31
answer the second certified question.
Certified questions answered. All the Justices concur.
name as beneficiary someone without an insurable interest. It is not as clear,
however, whether a policy would be void if a third party “causes” an insured to
procure a policy on his own life that names the insured himself as beneficiary,
and the insured then turns around and immediately sells it to the third party
or someone else without an insurable interest. Because neither the certified
questions nor the parties’ briefing directly address that separate and more
difficult question, we do not answer it here.
32