US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 20
                             GROUP LIFE INSURANCE
    41-2005.  DEBTOR GROUPS. The lives of a group of individuals may be
insured under a policy issued to a creditor, or to a trustee or trustees or
agent designated by two (2) or more creditors, who shall be deemed the
policyholder, to insure debtors of the creditor, subject to the following
requirements:
    (1)  The debtors eligible for insurance under the policy shall be all of
the debtors of the creditor, or all of any class or classes thereof determined
by conditions pertaining to the indebtedness or to the purchase giving rise to
the indebtedness. The policy may provide that the term "debtors" shall include
the debtors of one (1) or more subsidiary corporations, and the debtors of one
(1) or more affiliated corporations, proprietors or partnerships if the
business of the policyholder and of such affiliated corporations, proprietors
or partnerships is under common control through stock ownership, contract, or
otherwise.
    (2)  The premium for the policy shall be paid by the policyholder, either
from the creditor's funds, or from charges collected from the insured debtors,
or from both. A policy on which part or all of the premium is to be derived
from the collection from the insured debtors of identifiable charges not
required of uninsured debtors shall not include, in the class or classes of
debtors eligible for insurance, debtors under obligations outstanding at its
date of issue without evidence of individual insurability unless at least
seventy-five percent (75%) of the then eligible debtors elect to pay the
required charges. A policy on which no part of the premium is to be derived
from the collection of such identifiable charges must insure all eligible
debtors, or all except any as to whom evidence of individual insurability is
not satisfactory to the insurer.
    (3)  The policy may be issued only if the group of eligible debtors is
then receiving new entrants at the rate of at least one hundred (100) persons
yearly, or may reasonably be expected to receive at least one hundred (100)
new entrants during the first policy year, and only if the policy reserves to
the insurer the right to require evidence of individual insurability if less
than seventy-five percent (75%) of the new entrants become insured. The policy
may exclude from the classes eligible for insurance classes of debtors
determined by age.
    (4)  The amount of insurance on the life of a debtor shall at no time
exceed the amount owed by him to the creditor, or one hundred fifty thousand
dollars ($150,000), whichever is less.
    (5)  The insurance shall be payable to the policyholder. Such payment
shall reduce or extinguish the unpaid indebtedness of the debtor to the extent
of such payment.