2005 Nevada Revised Statutes - Chapter 688B — Group Life Insurance

CHAPTER 688B - GROUP LIFE INSURANCE

NRS 688B.010 Shorttitle; scope.

NRS 688B.020 Wholesalelife insurance defined.

NRS 688B.030 Grouplife insurance prohibited unless approved by Commissioner; exempt policies;exclusion or limitation of coverage; applicability.

NRS 688B.040 Provisionsrequired in group contracts.

NRS 688B.050 Graceperiod.

NRS 688B.060 Incontestability.

NRS 688B.070 Provisionsrequired in policy of group life insurance.

NRS 688B.080 Insurability.

NRS 688B.090 Misstatementof age.

NRS 688B.100 Paymentof benefits.

NRS 688B.110 Certificate:Filing; approval.

NRS 688B.120 Conversionon termination of eligibility.

NRS 688B.130 Conversionon termination of policy.

NRS 688B.140 Deathpending conversion.

NRS 688B.150 Informationto debtor.

NRS 688B.160 Noticeas to right of conversion.

NRS 688B.170 Readjustmentof premium.

NRS 688B.180 Applicationof dividends; rate reductions.

NRS 688B.190 Proceedsof benefits to be paid within 30 days after death of insured.

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NRS 688B.010 Shorttitle; scope.

1. This chapter may be known and cited as the GroupLife Insurance Law.

2. This chapter applies only to group life insuranceand wholesale life insurance.

3. This chapter does not apply to any group lifeinsurance contract entered into or issued prior to January 1, 1972, or to anyextensions, renewals or modifications thereof or amendments thereto whenevermade.

(Added to NRS by 1971, 1746)

NRS 688B.020 Wholesalelife insurance defined.

1. As used in this Code, wholesale life insurance isthat plan of life insurance, other than salary savings life insurance orpension trust insurance and annuities, issued to:

(a) Three or more employees of any corporation,copartnership or individual employer or any governmental corporation, agency ordepartment thereof; or

(b) Ten or more members, employees or employees ofmembers of any trade or professional association, or of a labor union, or ofany association of members in the same or related occupations, profession orindustry having had an active existence for at least 2 years, where suchassociation or union has a constitution or bylaws and is formed in good faithfor purposes other than that of obtaining insurance,

where suchpersons, with or without their dependents are issued the same form of anindividual policy on the plan, varying only as to amounts of coverage appliedfor by such persons and under an arrangement whereby the premiums on suchpolicies may be paid to the insurer periodically by the employer, with orwithout payroll deductions, or by the insured or association or union for itsmembers, or by some designated person acting on behalf of such employer,association or union. The term employees as used in this section shall bedeemed to include the officers, managers, employees and retired employees ofthe employer and the individual proprietor or partners if the employer is anindividual or partnership.

2. Each policy issued under this section shall providethat the coverage shall terminate when the insured individual no longerqualifies for such policy under this section; but the policy may provide thatit may be continued in force or be replaced with another policy if the premium,benefits and other relevant factors of the continued or replacement policy arethe same as those of a similar individual policy not issued under or pursuantto this section.

(Added to NRS by 1971, 1746)

NRS 688B.030 Grouplife insurance prohibited unless approved by Commissioner; exempt policies;exclusion or limitation of coverage; applicability.

1. Except as otherwise provided in this section, nopolicy of group life insurance may be delivered or issued for delivery in thisState to a group which was formed for the purpose of purchasing one or morepolicies of group life insurance.

2. A policy of group life insurance may be deliveredto a group described in subsection 1 if the Commissioner approves the issuance.The Commissioner must not grant his approval unless he finds that:

(a) The benefits of the policy are reasonable inrelation to the premiums charged; and

(b) The group to which the policy is issued isorganized and operated in a fiscally sound manner.

3. The provisions of subsection 1 do not apply to apolicy of group life insurance which is delivered or issued for delivery inthis State to a group whose members:

(a) Are related by blood, marriage or legal adoption;

(b) Have a common interest through ownership of abusiness enterprise or a substantial legal interest or equity therein, and whoare actively engaged in the management thereof; or

(c) Otherwise have an insurable interest in eachothers lives.

4. An insurer may exclude or limit the coverage in a policyissued pursuant to this section of any person as to whom evidence ofinsurability is not satisfactory to the insurer.

5. The provisions of this section apply to theoffering in this State of a policy issued in another state.

(Added to NRS by 1971, 1747; A 1987, 118)

NRS 688B.040 Provisionsrequired in group contracts. No policy ofgroup life insurance shall be delivered in this State unless it contains insubstance the provisions set forth in NRS688B.040 to 688B.150, inclusive,or provisions which in the opinion of the Commissioner are more favorable tothe persons insured, or at least as favorable to the persons insured and morefavorable to the policyholder; except:

1. NRS 688B.100to 688B.140, inclusive, do not applyto policies issued to a creditor to insure debtors of such creditor;

2. The standard provisions required for individuallife insurance policies do not apply to group life insurance policies; and

3. If the group life insurance policy is on a plan ofinsurance other than the term plan, it shall contain a nonforfeiture provisionor provisions which in the opinion of the Commissioner is or are equitable tothe insured persons and to the policyholder; but nothing in this subsectionshall be construed to require that group life insurance policies contain thesame nonforfeiture provisions as are required for individual life insurancepolicies.

(Added to NRS by 1971, 1747)

NRS 688B.050 Graceperiod. The group life insurance policy shallcontain a provision that the policyholder is entitled to a grace period of 31days for the payment of any premium due except the first, during which graceperiod the death benefit coverage shall continue in force, unless thepolicyholder has given the insurer written notice of discontinuance in advanceof the date of discontinuance and in accordance with the terms of the policy.The policy may provide that the policyholder shall be liable to the insurer forthe payment of a pro rata premium for the time the policy was in force duringsuch grace period.

(Added to NRS by 1971, 1747)

NRS 688B.060 Incontestability. The group life insurance policy shall contain a provisionthat the validity of the policy shall not be contested, except for nonpaymentof premium, after it has been in force for 2 years from its date of issue; andthat no statement made by any person insured under the policy relating to hisinsurability shall be used in contesting the validity of the insurance withrespect to which such statement was made after such insurance has been in forceprior to the contest for a period of 2 years during such persons lifetime norunless it is contained in a written instrument signed by him.

(Added to NRS by 1971, 1748)

NRS 688B.070 Provisionsrequired in policy of group life insurance. Thegroup life insurance policy shall contain a provision:

1. That a copy of the application, if any, of thepolicyholder shall be attached to the policy when issued and become a part of thecontract;

2. That all statements made by the policyholder or bythe persons insured shall be deemed representations and not warranties; and

3. That no statement made by any person insured shallbe used in any contest unless a copy of the instrument containing the statementis or has been furnished to such person or to his beneficiary.

(Added to NRS by 1971, 1748)

NRS 688B.080 Insurability. The group life insurance policy shall contain a provisionsetting forth the conditions, if any, under which the insurer reserves theright to require a person eligible for insurance to furnish evidence ofindividual insurability satisfactory to the insurer as a condition to part orall of his coverage.

(Added to NRS by 1971, 1748)

NRS 688B.090 Misstatementof age. The group life insurance policy shallcontain a provision specifying an equitable adjustment of premiums or ofbenefits or both to be made if the age of a person insured has been misstated,such provision to contain a clear statement of the method of adjustment to beused.

(Added to NRS by 1971, 1748)

NRS 688B.100 Paymentof benefits. The group life insurance policyshall contain a provision that any sum becoming due by reason of the death ofthe person insured shall be payable to the beneficiary designated by the personinsured, subject to the provision of the policy if there is no designatedbeneficiary, as to all or any part of such sum, living at the death of theperson insured, and subject to any right reserved by the insurer in the policyand set forth in the certificate to pay at its option a part of such sum notexceeding $500 to any person appearing to the insurer to be equitably entitledthereto by reason of having incurred funeral or other expenses incident to thelast illness or death of the person insured.

(Added to NRS by 1971, 1748)

NRS 688B.110 Certificate:Filing; approval.

1. The group life policy shall contain a provisionthat the insurer will issue to the policyholder for delivery to each personinsured a certificate setting forth a statement in summary form of theessential features of the insurance coverage of such employee or member, towhom benefits thereunder are payable, and the rights and conditions set forthin NRS 688B.120, 688B.130 and 688B.140. If dependents are included inthe coverage, only one statement need be issued for each family unit.

2. The Commissioner may, in his discretion, requirethe form of each such certificate proposed to be delivered in this state undera group policy not made under the laws of this state, to be filed with him bythe insurer for informational purposes only.

(Added to NRS by 1971, 1749)

NRS 688B.120 Conversionon termination of eligibility. The group lifeinsurance policy shall contain a provision that if the insurance on a personcovered under the policy ceases because of termination of employment or ofmembership in the class or classes eligible for coverage under the policy, suchperson shall be entitled to have issued to him by the insurer, without evidenceof insurability, an individual policy of life insurance without disability orother supplementary benefits, provided application for the individual policyshall be made, and the first premium paid to the insurer, within 31 days aftersuch termination, and provided further that:

1. The individual policy shall, at the option of suchperson, be on any one of the forms, except term insurance, then customarilyissued by the insurer at the age and for the amount applied for;

2. The individual policy shall be in an amount not inexcess of the amount of life insurance which ceases because of such terminationless the amount of any life insurance for which such person is or becomeseligible under the same or any other group policy within 31 days after suchtermination, but any amount of insurance which has matured on or before thedate of such termination as an endowment payable to the person insured, whetherin one sum or in installments or in the form of an annuity, shall not, for thepurposes of this section, be included in the amount which is considered tocease because of such termination; and

3. The premium on the individual policy shall be atthe insurers then customary rate applicable to the form and amount of theindividual policy, to the class of risk to which such person then belongs, andto his age attained on the effective date of the individual policy.

(Added to NRS by 1971, 1749)

NRS 688B.130 Conversionon termination of policy. The group life insurancepolicy shall contain a provision that if the group policy terminates or isamended so as to terminate the insurance of any class of insured persons, everyperson insured thereunder at the date of such termination whose insuranceterminates and who has been so insured for at least 5 years prior to suchtermination date shall be entitled to have issued to him by the insurer anindividual policy of life insurance, subject to the same conditions andlimitations as are provided by NRS688B.120, except that the group policy may provide that the amount of suchindividual policy shall not exceed the smaller of:

1. The amount of the persons life insuranceprotection ceasing because of the termination or amendment of the group policy,less the amount of any life insurance for which he is or becomes eligible underany group policy issued or reinstated by the same or another insurer within 31days after such termination; and

2. $2,000.

(Added to NRS by 1971, 1750)

NRS 688B.140 Deathpending conversion. The group life insurancepolicy shall contain a provision that if a person insured under the policy diesduring the period within which he would have been entitled to have anindividual policy issued to him in accordance with NRS 688B.120 or 688B.130 and before such an individualpolicy has become effective, the amount of life insurance which he would havebeen entitled to have issued to him under such individual policy shall bepayable as a claim under the group policy, whether or not application for theindividual policy or the payment of the first premium therefor has been made.

(Added to NRS by 1971, 1750)

NRS 688B.150 Informationto debtor. A policy issued to a creditor to insuredebtors of such creditor shall contain a provision that the insurer willfurnish to the policyholder for delivery to each debtor insured under thepolicy a form which will contain a statement that the life of the debtor isinsured under the policy and that any death benefit paid thereunder by reasonof his death shall be applied to reduce or extinguish the indebtedness.

(Added to NRS by 1971, 1750)

NRS 688B.160 Noticeas to right of conversion.

1. If any individual insured under a group lifeinsurance policy delivered in this state after January 1, 1972, becomesentitled under the terms of such policy to have an individual policy of lifeinsurance issued to him without evidence of insurability, subject to the makingof an application and payment of the first premium within the period specifiedin such policy, and if such individual is not given notice of the existence ofsuch right at least 15 days prior to the expiration date of such period, thenthe individual shall have an additional period within which to exercise suchright; but nothing contained in this section shall be construed to continue anyinsurance beyond the period provided in such policy.

2. This additional period shall expire 15 days nextafter the individual is given such notice, but in no event shall suchadditional period extend beyond 60 days next after the expiration date of theperiod provided in such policy.

3. Written notice presented to the individual ormailed by the policyholder to the last known address of the individual ormailed by the insurer to the last known address of the individual as furnishedby the policyholder shall constitute notice for the purpose of this section.

(Added to NRS by 1971, 1750)

NRS 688B.170 Readjustmentof premium. Any group life insurance contractmay provide for a readjustment of the premium rate based upon the experiencethereunder.

(Added to NRS by 1971, 1751)

NRS 688B.180 Applicationof dividends; rate reductions.

1. If a policy dividend is declared after January 1,1972, or a reduction in rate is made after January 1, 1972, or continued forthe first or any subsequent year of insurance under any policy of group lifeinsurance issued before, on or after January 1, 1972, to any policyholder, theexcess, if any, of the aggregate dividends or rate reductions under such apolicy and all other group insurance policies of the policyholder over theaggregate expenditure for insurance under such policies made from moneycontributed by the policyholder, or by an employer of insured persons, or by aunion or association to which the insured persons belong, includingexpenditures made in connection with administration of such policies, must beapplied by the policyholder for the sole benefit of insured employees ormembers.

2. This section does not apply to debtor groups.

(Added to NRS by 1971, 1751; A 1997, 1626)

NRS 688B.190 Proceedsof benefits to be paid within 30 days after death of insured. An insurer shall pay the proceeds of any benefits under agroup life insurance policy not more than 30 days after the death of theinsured. If the proceeds are not paid within this period, the insurer shall payinterest on the proceeds, at a rate that is not less than the current rate ofinterest on death proceeds on deposit with the insurer, from the date of deathof the insured to the date when the proceeds are paid.

(Added to NRS by 1997, 3033)