MEMORANDUM OPINION

Keith L. Phillips, United States Bankruptcy Judge.

Roy M. Terry, Jr., the Chapter 7 trustee (the "Trustee"), has objected to the exemption claimed by the debtor, Sharon Lynn Bowman (the "Debtor"), in the cash value of her life insurance policy. The Debtor bases her claim that the policy is exempt on Va. Code Ann. § 38.2-3122(F), which protects the cash value of a life insurance policy against creditor claims "regardless of whether (i) the right to change the beneficiary thereof is reserved or permitted . ..." However, because the policy includes a provision reserving the Debtor's right to change the beneficiary, the Trustee argues that another statute, Va. Code Ann. § 38.2-3123, is applicable. Va. Code Ann. § 38.2-3123 provides that if a life insurance policy contains terms reserving the right to change the beneficiary, its cash surrender value is not protected by § 38.2-3122. Having determined that the two statutes cannot reasonably be harmonized, the Court will overrule the Trustee's objection and allow the Debtor's exemption.

Background

The facts are not in dispute. The Debtor filed a voluntary chapter 7 petition in this Court on June 29, 2017. On Schedule B, the Debtor listed a Transamerica Variable Annuity Life Insurance policy (the "Policy") with a surrender or refund value of $11,289.96. The Policy designates the Debtor as owner and annuitant. It lists Howard M. Bowman, III, and Tabatha L. Gray as beneficiaries; however, neither of them is designated as an "Irrevocable Beneficiary." The Debtor has claimed the full cash or refund value of the Policy as exempt on Schedule C pursuant to Va. Code Ann. § 38.2-3122.1

On October 4, 2017, the Trustee filed the objection currently before this Court. The Trustee asserts that the cash value of the Policy is not entitled to the protection afforded by § 38.2-3122 because the Policy includes a provision reserving the Debtor's right to change the beneficiary. He claims that the liquidation of the Policy's cash surrender value would provide a dividend to creditors.

The Debtor argues in response that Va. Code Ann. § 38.2-3123, the provision relied upon by the Trustee to disallow the exemption, was effectively repealed by a revision to § 38.2-3122. Therefore, the Debtor argues that the entire cash surrender value of the Policy is exempt.

Discussion

Va. Code Ann § 38.2-3122 generally protects the proceeds of life insurance policies and annuity contracts from creditor claims. Subsection A defines "protected insurance item" to include "[t]he cash surrender value" and "proceeds" of a life insurance policy or annuity.2 Subsection B states that "[i]n no case whatsoever shall any protected insurance item be liable to execution, attachment, garnishment, or other legal process in favor of any creditor of ... [t]he person whose life is insured by the related policy or contract; ... [or] [t]he person who owns the related contract... or policy. ..."

In 2016, the Virginia General Assembly amended § 38.2-3122 and added subsection F.3 Subsection F specifically states that "[t]he exemption established by this section shall apply to a protected insurance item regardless of whether ... the right to change the beneficiary thereof is reserved or permitted. ..." Prior to the 2016 amendment, § 38.2-3122(3) generally protected an "assignee or lawful beneficiary" from the insured's creditors claims to the proceeds of an insurance policy in instances where "[t]he right to change the beneficiary may or may not have been reserved or permitted."

In direct conflict with Va. Code Ann. § 38.2-3122(F), § 38.2-3123 states that "[i]n the case of policies under the terms of which the right to change the beneficiary is reserved and as to which the case surrender or loan value of the policy is claimed by the creditors, the insurance shall not be entitled to the protection afforded by § 38.2-3122." The most recent amendment to this statute occurred in 1990, when the legislature eliminated a householder's right to exempt up to $10,000.00 of the cash surrender value of a life insurance policy pursuant to § 38.2-3122.4

The salient portions of §§ 38.2-3122 and 3123 were originally enacted by the Virginia General Assembly in 1986.5 In 2001, this Court opined that the two statutes, "the second of which not only immediately follows the first, but expressly refers to it — are clearly intended to be read together. Thus, ... the plain language of § 38.2-3123 precludes any exemption of the cash surrender value or loan value of a policy by a policy holder who has retained the right to change beneficiaries." In re Watkins, 267 B.R. 703, 706-07 (Bankr. E.D. Va. 2001).6

Legislative history relating to §§ 38.2-3122 and 3123 is scant; however, the 2016 introduction of Senate Bill 640, the proposed amendment to § 38.2-3122, was accompanied by a summary that is consistent with the language of the amended statute. The summary states that "[t]hese exemptions from creditors' claims apply regardless of whether the right to change the beneficiary thereof is reserved or permitted or the insured person, the annuitant, the owner of the policy or contract, or the person effecting the policy or contract, or any of their estates, is a contingent beneficiary of the policy, contract, or deposit."7 Although the General Assembly clearly intended to eliminate the restriction on § 38.2-3122 imposed by § 38.2-3123, there is no explanation for why it failed to address § 38.2-3123.8

Having been left with a contradiction in the language of the two statutes as a result of the 2016 amendment to § 38.2-3122, the Court must reconcile two conflicting statutes. In re Watkins offers no guidance, since it is no longer clear that the statutes are intended to be read together.

Conflicting statutes should be harmonized if possible. See Boynton v. Kilgore, 271 Va. 220, 623 S.E.2d 922, 927 (2006) ("When faced with apparently conflicting statutes, this Court applies `a well-established principle of statutory construction. If possible, we must harmonize apparently conflicting statutes to give effect to both.'") (quoting Phipps v. Liddle, 267 Va. 344, 593 S.E.2d 193, 195 (2004)); see also Kirkpatrick v. Bd. of Supervisors, 146 Va. 113, 136 S.E. 186, 190 (1926) ("where two statutes are in apparent conflict they should be construed, if reasonably possible, so as to allow both to stand and to give force and effect to each"). As a result of the 2016 amendment to § 38.2-3122, it can no longer be harmonized with § 38.2-3123. The pertinent language of the two statutes cannot be read together in such as way as to eliminate the conflict while at the same time preserving the meaning and effect of both statutes. Because the statutes cannot be harmonized, the Court must turn to other tools of statutory construction, such as an examination of the legislative history and the timing of the enactments.

In this case, the timing of its enactments demonstrates the General Assembly's intent when amending § 38.2-3122, which must have been to eliminate the earlier restrictions imposed by § 38.2-3123. The most recent expression of the General Assembly's intent is reflected by the 2016 amendment to § 38.2-3122. Achievement of that legislative intent can be accomplished only by deeming § 38.2-3123 to have been repealed by implication.9 Under Virginia principles of statutory construction, the newer law must prevail. Gaines' Adm'r v. Marye, 94 Va. 225, 26 S.E. 511, 513 (1897) ("If they are inconsistent, and cannot stand together, the original statutes and the respective dates of their enactment may be examined to see what was the last expression of the will of the legislature on the subject. And this last expression of the legislative will, when ascertained, if it be embodied in the revision, must prevail in construing inconsistent and repugnant parts of the law as revised."); Bldg. Supplies Corp. v. Willcox, 284 F. 113, 116 (4th Cir. 1922) ("However that may be, the general rule of law is (and necessarily so) that the provisions contained in the act of latest passage control as indicating the last intention of the Legislature.").

The Trustee has asserted that the language of § 38.2-3123 is more specific than the language of § 38.2-3122 and for that reason its language must prevail. See Daniels v. Warden of the Red Onion State Prison, 266 Va. 399, 588 S.E.2d 382, 384 (2003) ("[W]hen one statute speaks to a subject in a general way and another deals with a part of the same subject in a more specific manner, the two should be harmonized, if possible, and where they conflict, the latter prevails.") (citation omitted). The Trustee is incorrect. The pertinent language of both statutes is equally specific, and the language of § 38.2-3122(F) implicitly repeals § 38.2-3123.

Allowance of the exemption adheres to the principle that under the Bankruptcy Code and Virginia law, exemption statutes should be liberally construed in favor of the debtor. See In re Apfel, 565 B.R. 349, 353 (Bankr. E.D. Va. 2017). Allowing the exemption is also consistent with the expressed purpose of §§ 38.2-3122 and 3123, which is "to confer additional rights, privileges and benefits upon beneficiaries and assignees of policies." Va. Code Ann. § 38.2-3125.10

The Debtor's interest in the cash value of the Policy is exempt pursuant to Va. Code Ann. § 38.2-3122, notwithstanding the language of Va. Code Ann. § 38.2-3123. Therefore, the Trustee's objection to the Debtor's exemption will be overruled.11

A separate order will be entered consistent with this opinion.