W. Reserve Life Assurance Co. of Ohio v. ADM Assocs., LLC
Annotate this CaseAn investment scheme exploiting the complexities of certain variable annuity policies led to litigation in the United States Court of Appeals for the First Circuit. The First Circuit certified to the Rhode Island Supreme Court two questions, and the Court accepted those questions pursuant to the discretionary authority provided to it in Article I, Rule 6 of the Supreme Court Rules of Appellate Procedure. The Supreme Court answered (1) an annuity is not infirm for want of an insurable interest when the owner and beneficiary of an annuity with a death benefit is a stranger to the annuitant; and (2) a clause in an annuity that purports to make the annuity incontestable from the date of its issuance precludes the maintenance of an action based on the lack of an insurable interest.
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