Supreme Court of Georgia

Crum v. Jackson National Life Insurance Company

S22Q06490 citations·Filed October 25, 2022

Summary of the case Crum v. Jackson National Life Insurance Company

The Supreme Court of Georgia addressed certified questions from the Eleventh Circuit regarding whether a life insurance policy taken out by an insured on their own life with the intent to sell to a third party without an insurable interest is void as an illegal wagering contract. The court concluded that under Georgia law, such a policy is not void if no third party was involved in procuring the policy.

Key Issues of the case Crum v. Jackson National Life Insurance Company

Legality of life insurance policy with intent to sell to third party without insurable interest
Interpretation of Georgia's insurable interest statute

Key Facts of the case Crum v. Jackson National Life Insurance Company

Kelly Couch applied for a $500,000 life insurance policy from Jackson National Life Insurance Company in 1999.
Couch intended to sell the policy on the viatical settlement market and did so eight months later to Sterling Crum.

Decision of the case Crum v. Jackson National Life Insurance Company

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.

Impact of the case Crum v. Jackson National Life Insurance Company

Clarifies the application of Georgia's insurable interest statute, allowing policies taken out with intent to sell to third parties without insurable interest, provided no third party was involved in procurement.

Opinions

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

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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).

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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

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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,

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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.

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.

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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. at

214–215 (citation omitted). See Clements v. Terrell, 167 Ga. 237, 243

(145 SE 78) (1928); Quillian v. Johnson, 122 Ga. 49, 56–57 (49 SE

25
801) (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.

---

315 Ga. 67
FINAL COPY

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

the policy with the intent to sell it on the secondary “viatical

2
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 Crum’s claim.2

After a bench trial, the district court agreed with Jackson that

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 Nat. 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.
2 It appears that Jackson could not deny Crum’s claim based on any

3
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 Nat. Life Ins. Co. v. Crum, No. 1:17-cv-03857-

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

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

“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
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 Nat. 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?

Id. at 863.

2. Analysis