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Can you summarize SDAR Chapter 20:07:18?
BANKING (LABOR AND REGULATION) > Purchase of life insurance.
Short Summary
This legal document governs the authority of banks to purchase and hold cash value life insurance policies. Banks are allowed to purchase and hold an interest in cash value life insurance policies on the life of its key persons and borrowers. They can also purchase cash value life insurance in connection with benefit plans on employees, officers, and directors, subject to certain limitations. However, banks are prohibited from purchasing cash value life insurance if the insurable interest is primarily based on a key person’s status as a shareholder of the bank or bank holding company. The funding for life insurance premium payments of employees, officers, or directors as part of a benefit plan can be split jointly between the bank and the individual. Banks are also permitted to purchase individual or group life insurance in connection with deferred compensation agreements entered into with its officers, employees, and directors. No specific penalties are mentioned in this document.
Whom does it apply to?
Banks
What does it govern?
Authority of banks to purchase and hold cash value life insurance policies
What are exemptions?
No specific exemptions are mentioned in this document.
What are the Penalties?
No specific penalties are mentioned in this document.
Jurisdiction
South Dakota