Under California Insurance Code §10110.1, insurable interest in another's life is generally found in all of the following relationships EXCEPT:

Explanation

California Insurance Code §10110.1 codifies insurable interest categories: (1) close family by blood or law (spouse, domestic partner, parent, child, blood-related dependents) — based on relationship; and (2) parties with a 'lawful and substantial economic interest' in the continued life of another (creditors, business partners, key employees) — based on financial dependency. Strangers who pool money to buy policies on each other for speculative gain LACK insurable interest, and such arrangements are 'stranger-originated life insurance' (STOLI) — invalid and against public policy. Spouses and domestic partners, and parents, children or close blood relatives dependent on the insured for support, all fall squarely in the family category, while the business partner with a financial interest in a co-partner's continued life for buy-sell purposes has the required economic interest. The two strangers who agree in writing to buy policies on each other in exchange for cash payments describe the speculative STOLI arrangement specifically prohibited under §10110.1(d), which is why that relationship is the EXCEPTION.