Chap. 371.—An ACT to amend the Code of Virginia by adding thence a new

section numbered 4219-a, protecting the rights, title, interests and property of

beneficiaries under certain policies of life insurance and supplemental con-

tracts. [H 234]
Approved March 31, 1944

Be it enacted by the General Assembly of Virginia:

!. That the Code of Virginia be amended by adding a new section
numbered forty-two hundred nineteen-a, as follows:

Section 4219-a. Rights of Beneficiaries When Proceeds Under Policy
or Supplemental Contract Retained; When Payments Not Subject to
Debts, Et Cetera—(a) If under the terms of any policy of life insur-
ance or under any written agreement supplemental thereto, issued by any
life insurance company, the proceeds are retained by the company at
maturity or otherwise, no person entitled to any part of the proceeds, or
to any installment of interest due or becoming due, shall be permitted
to commute, anticipate, encumber, alienate or assign same, or any part
thereof, if such permission is expressly withheld by the terms of the
policy or supplemental agreement; and if the policy or supplemental
agreement so provides, no payments of interest or of principal shall be in
any way subject to such person's debts, contracts or engagements, nor
to any judicial processes to levy upon or attach same for payment thereof.

(b) No such insurance company shall be required to segregate such
funds but may hold them as a part of its general corporate funds.
(c) The foregoing provisions of subsection (a) of this section shall
not apply as to that proportionate part, if any, of the proceeds of any
such policy or supplemental contract arising or resulting from premiums
paid by the beneficiary, such proportionate part of the proceeds to be
determined by comparing the total premiums paid, without interest, with
the premiums, without interest, paid by the beneficiary. Notwithstanding
the provisions of this paragraph, (1) a life insurance company not having
written notice of any claim that premiums have been paid by the bene-
ficiary and in the absence of written notice of an adverse claim of any
other character under this section shall be protected in making or with-
holding payments pursuant to the terms of a policy or supplemental
agreement and (2) upon acceptance by a life insurance company of proof
that premiums have been paid by the beneficiary and payment by such
company of the corresponding proportionate part of the proceeds of any
such policy or supplemental agreement such payment shall constitute
full release of the company from all liability with respect to such pro-
portionate part of the proceeds of such policy or supplemental agreement.

(d) The foregoing exemption from the debts of the beneficiary
under both this section and section fifty-one hundred and fifty-seven
of the Code of Virginia shall not exceed in the aggregate the amount
prescribed in section fifty-one hundred and fifty-seven. The beneficiary
shall make an election as to the manner in which the exemptions shall
be applied as between the proceeds of life insurance policies and estates
in trust, and the election of the beneficiary shall be binding as against
all creditors. In the absence of notice of an adverse claim under this
paragraph, a life insurance company shall be protected in making or with-
holding payments pursuant to the terms of a policy or supplemental agree-
ment referred to in the preceding three paragraphs.