The Tennessee Supreme Court finds that a power of attorney grants the attorney-in-fact the authority to change the beneficiary designation on a life insurance policy. Tennessee Farmers Life Reassurance Company v. Rose(Tenn., No. E2005-00006-SC-R11-CV, Oct. 2, 2007).
Brenda Langley purchased a life insurance policy from Tennessee Farmers Life Reassurance Company, and she named her children and grandchild as beneficiaries. Later Ms. Langley executed a durable power of attorney, naming her sister, Linda Rose, as her attorney-in-fact. The power of attorney gave Ms. Rose the authority to "transact all insurance business" on Ms. Langley's behalf. Ms. Rose, acting as attorney-in-fact, changed the beneficiary designation on the life insurance policy to name herself as the sole beneficiary.
After Ms. Langley died, the insurance company asked the court to determine the proper beneficiary. The beneficiaries claimed state law prohibited an attorney-in-fact from changing the beneficiary designation on an insurance policy without specific authority. The trial court agreed, and the appeals court affirmed. Ms. Rose appealed.
The Supreme Court of Tennessee reverses, holding that because the attorney-in-fact had authority to "transact all insurance business," she had the authority to change the beneficiary designation. According to the court, the power of attorney did not specifically incorporate by reference the powers listed in state law, so the state law prohibition on changing a beneficiary designation without a specific authority does not apply.
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