Insurance Companies, Agents, Brokers, Policies

SENATE BILL 1106
By Kyle

HOUSE BILL 1045
By Shaw

HB1045
003107
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AN ACT to amend Tennessee Code Annotated, Title 56,
relative to creditor claims to insurance proceeds.

WHEREAS, the Tennessee Supreme Court has repeatedly advised that "each word in a
statute has a specific purpose and meaning" in cases such as State v. Gevedon, 671 S.W.3d
537 (Tenn. 2023), Arden v. Kozawa, 466 S.W.3d 758 (Tenn. 2015), Cunningham v. Williamson
Cnty. Hosp. Dist., 405 S.W.3d 41 (Tenn. 2013), and Lee Med., Inc. v. Beecher, 312 S.W.3d 515
(Tenn. 2010); and
WHEREAS, certain members of the Tennessee bar and judiciary have questioned the
meaning of the phrase "for the benefit of" and, if this conduct continues, retirees will be
discouraged from moving into Tennessee; and
WHEREAS, the phrase "for the benefit of" is used to indicate that something is done for
the advantage of someone or something. In financial and legal contexts, FBO stands for "for
the benefit of" and is often used in living trust documents or accounts with beneficiary
designations; and
WHEREAS, per the Merriam-Webster dictionary, the plain definition of the word
"beneficiary" is "the person named (as in an insurance policy or annuity) to receive the proceeds
or benefits"; and
WHEREAS, the definition of the word "all" has been questioned and restricted by certain
members of the Tennessee bar and judiciary, despite the clear directive of the Tennessee
Supreme Court to use the plain meaning of each word in a statute without restriction in
decisions such as Lind v. Beaman Dodge, Inc., 356 S.W.3d 889 (Tenn. 2011), and if this
conduct continues, retirees will be discouraged from moving into Tennessee; and

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WHEREAS, per the Merriam-Webster dictionary, the plain definition of the word "all": as
an adjective, is "the whole amount, quantity, or extent of; as much as possible; every member or
individual component of; the whole number or sum of; every, any whatever, completely taken up
with, given to, or absorbed by"; as a pronoun, is "the whole number, quantity or amount; totality,
everybody, everything"; and as a noun, is "the whole of one's possessions, resources or
energy"; and
WHEREAS, Black's Law Dictionary defines "all" as "the whole of – used with a singular
noun or pronoun, and referring to the amount, quantity, extent, duration, quality or degree. The
whole number or sum of – used collectively, with a plural noun or pronoun expressing an
aggregate. Every member of an individual of (sic) individual component of; each one of – used
with a plural noun. In this sense, all is used generically and distributively (sic). 'All' refers rather
to the aggregate under which the individuals are subsumed than to the individuals themselves.";
and
WHEREAS, Tennessee Code Annotated, Section 56-7-203, was introduced in 1925 and
last modified in 1932, prior to the introduction of the "Personal Property Owner's Rights and
Garnishment Act of 1978", compiled in Tennessee Code Annotated, Title 26, Chapter 2, Part 1;
and
WHEREAS, these questions bring uncertainty to Tennesseans trying to plan for
retirement and may be a deciding factor among those seeking retirement in the Southeast when
choosing a state to which to retire; now, therefore,
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 56-7-203, is amended by deleting the
section and substituting:
The net amount payable under any policy of life insurance or under any annuity
contract upon the life of any person made for the benefit of, or assigned to, the spouse

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or children, or dependent relatives of the persons, is exempt from all claims of the
creditors, including execution, attachment, seizure, and garnishment, of the person
arising out of or based upon any obligation created after January 1, 1932, whether or not
the right to change the named beneficiary is reserved by or permitted to that person.
Use of exempt funds does not change the classification of the funds used from exempt
to nonexempt.
SECTION 2. This act takes effect July 1, 2025, the public welfare requiring it.