Agency rules for LGBTQ+ as insurance beneficiaries

Any person who secures an insurance policy on his or her own life may designate anyone as beneficiary whether he is male, female, lesbian, gay, bisexual, transgender or queer (LGBTQ+).

This was the legal opinion of Insurance Commissioner Dennis Funa, who reminded insurance firms that their unwritten policy of refusing to register nonrelatives as beneficiaries of the insured may be deemed illegal.

“Insofar as the Amended lnsurance Code is concerned, there are no restrictions as to who may be designated as beneficiary in a life insurance policy,” Funa said in Legal Opinion No. 2020-2 issued on March 4.

Guidelines sought

Funa issued the opinion in response to law professor E. Leo D. Battad, program director of University of the Philippines College of Law Gender Law and Policy, who asked for guidelines on the right of LGBTQ+ members to designate their domestic partners as the beneficiaries of their life insurance policies.

“The IC affirms your position that the insured who secures a life insurance policy on his or her own life may designate any individual as beneficiary, subject only to the exceptions provided in Article 2012 in relation to Article 739 of the Civil Code,” Funa told Battad.

Nullified donations

Article 2012 states “Any person who is forbidden from receiving any donation under Article 739 cannot be named beneficiary of a life insurance policy by the person who cannot make any donation to him, according to said article.”

Article 739 nullified donations made between persons who were guilty of adultery or concubinage at the time of the donation, between persons found guilty of the same crime and those made to public officers or his wife, descendants and ascendants, by reason of his office.

Funa cited that the Amended Insurance Code provided that “the insured shall have the right to change the beneficiary he designated in the policy, unless he has expressly waived this right in said policy.”

The Insurance Commission earlier acknowledged that members of the LGBTQ+ community had been unable to designate their partners as beneficiaries because insurance companies claim that a beneficiary must have an “insurable interest” in the life of the insured.

Apparent confusion

But Funa said “there appears to be an apparent confusion in the application of the concept of ‘insurable interest’ on the designation of beneficiary in a life insurance policy.”

“Unlike in the case of property insurance, where the beneficiary must have an insurable interest in the property insured, there is no equivalent provision in the case of life insurance,” Funa explained.

“[As far] as life insurance is concerned, it suffices that the person securing the life insurance policy has an insurable interest in the life being insured. And in cases where the insured secures a life insurance policy on his or her own life, it is immaterial whether the individual designated as beneficiary has an insurable interest in the life of the insured,” the commissioner said.