376.691. Group life policies, eligible groups authorized for issue--premiums, how paid.
Group life policies, eligible groups authorized for issue--premiums,how paid.
376.691. Except as provided in section 376.693, no policy of group lifeinsurance shall be delivered in this state unless it is one of the following:
(1) A policy issued to an employer, or to the trustees of a fundestablished by an employer, which employer or trustees shall be deemed thepolicyholder, to insure employees of the employer for the benefit of personsother than the employer, subject to the following requirements:
(a) The employees eligible for insurance under the policy shall be allof the employees of the employer, or all of any class or classes of suchemployees. The policy may provide that the term "employees" shall include theemployees of one or more subsidiary corporations, and the employees,individual proprietors, and partners of one or more affiliated corporations,proprietorships, or partnerships if the business of the employer and of suchaffiliated corporations, proprietorships, or partnerships is under commoncontrol. The policy may also provide that the term "employees" shall includethe individual proprietor or partners if the employer is an individualproprietorship or partnership. The policy may also provide that the term"employees" shall include retired employees and directors of a corporateemployer. A policy issued to insure the employees of a public body mayprovide that the term "employees" shall include elected or appointedofficials;
(b) The premium for the policy shall be paid either from the employer'sfunds or from funds contributed by the insured employees, or from both.Except as provided in paragraph (c) of this subdivision, a policy on which nopart of the premium is to be derived from funds contributed by the insuredemployees must insure all eligible employees, except those who reject suchcoverage in writing; and
(c) An insurer may exclude or limit the coverage on any person as towhom evidence of individual insurability is not satisfactory to the insurer;
(2) A policy issued to a creditor, its parent holding company, or to atrustee or agent designated by two or more creditors, which creditor, holdingcompany, affiliate, trustee, or agent shall be deemed the policyholder, toinsure debtors of the creditor, or creditors, subject to the followingrequirements:
(a) The debtors eligible for insurance under the policy shall be all ofthe debtors of the creditor, or creditors, or all of any class or classes ofsuch debtors. The policy may provide that the term "debtors" shall include:
a. Borrowers of money or purchasers or lessees of goods, services, orproperty for which payment is arranged through a credit transaction;
b. The debtors of one or more subsidiary corporations; and
c. The debtors of one or more affiliated corporations, proprietorships,or partnerships if the business of the policyholder and of such affiliatedcorporations, proprietorships, or partnerships is under common control;
(b) The premium for the policy shall be paid either from the creditor'sfunds or from charges collected from the insured debtors, or from both.Except as provided in paragraph (c) of this subdivision, a policy on which nopart of the premium is to be derived from the funds contributed by insureddebtors specifically for their insurance must insure all eligible debtors;
(c) An insurer may exclude any debtors as to whom evidence of individualinsurability is not satisfactory to the insurer;
(d) The amount of the insurance on the life of any debtor shall at notime exceed the scheduled amount of indebtedness to the creditor;
(e) The insurance may be payable to the creditor or any successor to theright, title, and interest of the creditor. Such payment shall reduce orextinguish the unpaid indebtedness of the debtor to the extent of suchpayment. Any excess insurance above the scheduled amount shall be payable tothe second beneficiary; if there is no second beneficiary, the insured'sestate;
(f) Notwithstanding the provisions of the above paragraphs of thissubdivision, insurance on agricultural credit transaction commitments may bewritten up to the amount of the loan commitment on a nondecreasing or levelterm plan. Insurance on educational credit transaction commitments may bewritten up to the amount of the loan commitment less the amount of anyrepayments made on the loan. Insurance on residential real estate securedcredit transaction commitments may be written up to the amount of the loancommitment;
(3) A policy issued to a labor union or similar employee organization,which shall be deemed to be the policyholder, to insure members of such unionor organization for the benefit of persons other than the union ororganization or any of its officials, representatives, or agents, subject tothe following requirements:
(a) The members eligible for insurance under the policy shall be all ofthe members of the union or organization, or all of any class or classes ofsuch members;
(b) The premium for the policy shall be paid either from funds of theunion or organization or from funds contributed by the insured membersspecifically for their insurance, or from both. Except as provided in thissubdivision, a policy on which no part of the premium is to be derived fromfunds contributed by the insured members specifically for their insurance mustinsure all eligible members, except those who reject such coverage in writing;
(c) An insurer may exclude or limit the coverage on any person as towhom evidence of individual insurability is not satisfactory to the insurer;
(4) A policy issued to a trust or to the trustee of a fund establishedby two or more employers, or by one or more labor unions or similar employeeorganizations, or by one or more employers and one or more labor unions orsimilar employee organizations, which trust or trustee shall be deemed thepolicyholder, to insure employees of the employers or members of the unions ororganizations for the benefit of persons other than the employers or theunions or organizations, subject to the following requirements:
(a) The persons eligible for insurance shall be all of the employees ofthe employers or all of the members of the unions or organizations, or all ofany class or classes of such employees or members. The policy may providethat the term "employees" shall include retired employees, the individualproprietor or partners if an employer is an individual proprietorship or apartnership, and directors of a corporate employer. The policy may alsoprovide that the term "employees" shall include the trustees or theiremployees, or both, if their duties are principally connected with suchtrusteeship;
(b) The premium for the policy shall be paid from funds contributed bythe employer or employers of the insured persons or by the union or unions orsimilar employee organizations, or by both, or from funds contributed by theinsured persons or from both the insured persons and the employer or union orsimilar employee organization. Except as provided in paragraph (c) of thissubdivision, a policy on which no part of the premium is to be derived fromfunds contributed by the insured persons specifically for their insurance mustinsure all eligible persons, except those who reject such coverage in writing;
(c) An insurer may exclude or limit the coverage on any person as towhom evidence of individual insurability is not satisfactory to the insurer;
(5) A policy issued to an association or to a trust or trustee of a fundestablished, created, or maintained for the benefit of members of one or moreassociations. The association or associations shall have at the outset aminimum of one hundred persons or there shall be a minimum of one hundredemployees or* employer members of the association, shall have been organizedand maintained in good faith for purposes other than that of obtaininginsurance, shall have been in active existence for at least two years prior toobtaining a policy of group life insurance, and shall have a constitution andbylaws which provide that: the association shall hold regular meetings notless than annually to further purposes of its members; except for creditunions, the association shall collect dues or solicit contributions frommembers; and the members shall have voting privileges and representation onthe governing board and committees. The policy shall be subject to thefollowing requirements:
(a) The policy may insure members of such association, employees of suchassociation, or employees of members of such association, or any combinationthereof, or all of any class or classes of such members or employees, for thebenefit of persons other than the employee's employer;
(b) The premium for the policy shall be paid from funds contributed bythe association or by employer members, or by both, or from funds contributedby the covered persons, or from both the covered persons and the associationor employer members;
(c) Except as provided in paragraph (d) of this subdivision, a policy onwhich no part of the premium is to be derived from funds contributed by thecovered persons specifically for the insurance must insure all eligiblepersons, except those who reject such coverage in writing;
(d) An insurer may exclude or limit the coverage of any person as towhom evidence of individual insurability is not satisfactory to the insurer;
(6) A policy issued to a credit union or to a trustee or agentdesignated by two or more credit unions, which credit union, trustee or agentshall be deemed the policyholder, to insure members of such credit union forthe benefit of persons other than the credit union, trustee, agent, or any oftheir officials, subject to the following requirements:
(a) The members eligible for insurance shall be all of the members ofthe credit union, or all of any class or classes of such members;
(b) The premium for the policy shall be paid by the policyholder fromthe credit union's funds and, except as provided in paragraph (c) of thissubdivision, must insure all eligible members;
(c) An insurer may exclude or limit the coverage on any member as towhom evidence of individual insurability is not satisfactory to the insurer.
(L. 1982 H.B. 1546 § 1, A.L. 1987 H.B. 510)*Word "of" appears in original rolls.