2019 New Mexico Statutes
Chapter 59A - Insurance Code
Article 21 - Group Life Insurance
Section 59A-21-4 - Employee groups.

A policy of group life insurance may be issued to an employer, or to the trustees of a fund established by an employer, which employer or trustees shall be deemed the policyholder, to insure employees of the employer for the benefit of persons other than the employer, subject to the following requirements:

A. the employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes thereof. The policy may provide that the term "employees" shall include the employees 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 such affiliated corporations, proprietorships or partnerships is under common control. The policy may provide that the term "employees" shall include the individual proprietor or partners if the employer is an individual proprietorship or a partnership. The policy may provide that the term "employees" shall include retired employees and directors of a corporate employer. A policy issued to insure the employees of a public body may provide that the term "employees" shall include elected or appointed officials;

B. the premium for the policy shall be paid either from the employer's funds or from funds contributed to by the insured employees, or from both. Except as provided in Subsection C, below, a policy on which no part of the premium is to be derived from funds contributed by the insured employees must insure all eligible employees, except those who reject such coverage in writing; and

C. the insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.

History: Laws 1982, ch. 127, § 402.

Trust created for purposes violating this section is illegal and unenforceable. Bauer v. Bates Lumber Co., 1972-NMCA-149, 84 N.M. 391, 503 P.2d 1169, cert. denied, 84 N.M. 390, 503 P.2d 1168.

Beneficiary must be one other than employer. — Where under a group life insurance policy, which employer purchased covering its employees, any proceeds from which were used to assist it in paying compensation benefits for which it might become liable to its employees, and a trust never existed except as a bookkeeping entry in the business records of the employer, neither the employer nor the trust is a permitted beneficiary. Bauer v. Bates Lumber Co., 1972-NMCA-149, 84 N.M. 391, 503 P.2d 1169, cert. denied, 84 N.M. 390, 503 P.2d 1168.

Am. Jur. 2d, A.L.R. and C.J.S. references. — Effective date of group life insurance as to individual policies of employees, 66 A.L.R.3d 1175.

Liability of employer to employee in connection with selection or retention of group insurer, 10 A.L.R.4th 1267.

Termination of employee's individual coverage under group policy for nonpayment of premiums, 22 A.L.R.4th 321.