55-5-17. Duties of trustee with respect to life insurance--Notice to settlor. (a) Unless otherwise required by the terms of the trust instrument or court order, no trustee of a trust, with respect to acquiring, retaining, or disposing of a contract of insurance or holding one or more insurance contracts upon the life of the settlor, or the lives of the settlor and the settlor's spouse, has the following duties:

(1) To determine whether any such contract is or remains a proper investment;

(2) To investigate the financial strength or changes in the financial strength of the life insurance company;

(3) To make a determination of whether to exercise any policy options available under any such contract;

(4) To make a determination of whether to diversify any such contract relative to one another or to other assets, if any, administered by the trustee;

(5) To inquire about changes in the health or financial condition of the insured or insured's relative to any such contract; or

(6) To vote, or give proxies to vote, on corporate matters.

A trustee of a revocable or an irrevocable trust, or of either a directed trust pursuant to chapter 55-1B or a delegated trust pursuant to § 55-5-16, is not liable to the beneficiaries of the trust or to any other party for any loss arising from the absence of those duties upon the trustee.

(b) The trustee of a trust described under subsection (a) of this section which was established prior to the effective date of this section, shall notify the settlor in writing that, unless the settlor provides written notice to the contrary to the trustee within sixty days of the trustee's notice, the provisions of subsection (a) of this section shall apply to the trust. Subsection (a) of this section does not apply if, within sixty days of the trustee's notice, the settlor notifies the trustee that subsection (a) does not apply.

Source: SL 2010, ch 232, § 15; SL 2012, ch 233, § 27; SL 2014, ch 226, § 5.