2006 New York Code - Group Life Insurance Policies; Standard Provisions.

 
    §  3220.  Group  life  insurance policies; standard provisions. (a) No
  policy of group life insurance shall be delivered or issued for delivery
  in this state unless it contains in substance the  following  provisions
  or  provisions  which  in  the  opinion  of  the superintendent are more
  favorable to certificate holders or not less  favorable  to  certificate
  holders and more favorable to policyholders:
    (1)  That the policy is incontestable after two years from its date of
  issue, except for non- payment of premiums by the policyholder; and that
  no statement made by any person insured under the policy relating to his
  insurability shall be used in contesting the validity of  the  insurance
  with  respect  to which such statement was made after such insurance has
  been in force prior to the contest for a period of two years during such
  person's lifetime and in no event unless it is in a  written  instrument
  signed  by  him, a copy of which is or has been furnished to such person
  or to his beneficiary.
    (2) That  the  rights  of  the  policyholder  or  of  any  insured  or
  beneficiary thereunder shall not be affected by any provision other than
  one  contained in the policy or the riders or endorsements thereon or in
  the amendments thereto signed by the policyholder and the insurer, or in
  the copy of the policyholder's application attached to the policy or  in
  the individual statements, if any, submitted in connection therewith.
    (3)  For  the  equitable adjustment of the premium or if the amount of
  insurance depends upon  the  age  of  the  insured,  for  the  equitable
  adjustment  of the amount of insurance and the premium in the event of a
  misstatement of the age of the person insured.
    (4) That the insurer will issue to the policyholder  for  delivery  to
  the  person  whose  life  is  insured  under  such  policy a certificate
  containing a statement of  the  insurance  protection  to  which  he  is
  entitled  including  any changes in such protection depending on the age
  of the person whose life is insured  and  the  rights  to  which  he  is
  entitled in accordance with paragraphs six and seven hereof.
    (5)  That  the benefits payable under any such policy shall be payable
  to the beneficiary or beneficiaries designated by  the  insured  except,
  where  the  policy  contains conditions pertaining to family status, the
  beneficiary may be the family member specified by the policy terms,  but
  if there is no such designated or specified beneficiary as to all or any
  part  of  the  insurance  payable  at the death of the insured, then the
  amount of insurance so payable for which there is no such designated  or
  specified  beneficiary  shall  be  payable to the estate of the insured,
  except that the policy may provide that the insurer may in such case, at
  its option, pay such insurance to any  one  or  more  of  the  following
  surviving  relatives:  wife, husband, mother, father, child or children,
  brothers or sisters; and except that the policy  may  provide  that  the
  insurer  may,  in  any case, deduct from the aggregate sum payable under
  such policy on account of the death of the insured,  an  amount  not  to
  exceed  five  hundred  dollars  to  be  paid  to  any  person or persons
  appearing to the insurer to be equitably entitled to same by  reason  of
  having  incurred  expenses  on  behalf  of the insured or for his or her
  burial.   Payment in accordance with any  of  the  foregoing  provisions
  shall  completely  discharge the insurer's liability with respect to the
  amount of insurance so paid.
    (6) That if the insurance on an employee or member covered  under  the
  policy,  other  than  one  issued  in accordance with paragraph three or
  eight of subsection (b) of section four thousand two hundred sixteen  of
  this  chapter, (A) ceases because of termination of (i) employment or of
  membership in the class or  classes  eligible  for  coverage  under  the
  policy,  or  (ii)  the  policy,  or  (B) is reduced (i) in the case of a
  policy covering an employee or union member under a plan arranged by the
  insured person's employer or union, on or after the employee's or  union
  member's  attainment  of  age  sixty  in  any  increment  or  series  of
  increments aggregating twenty percent or more of the amount of  coverage
  in  force before the first reduction on account of such age, (ii) in the
  case of a policy covering any member other than as described in item (i)
  of this subparagraph, at the time of the first reduction  of  insurance,
  (iii)  due  to change in class or (iv) due to an amendment of the policy
  to take effect immediately or at any subsequent date, such  employee  or
  such  member  shall  be  entitled  to have issued to him by the insurer,
  without evidence of insurability, upon application made to  the  insurer
  within  thirty-one days after such termination or reduction of insurance
  and payment of the premium applicable to the class of risk to  which  he
  belongs  and  to  the form and amount of the policy at his then attained
  age, a  policy  of  life  insurance  only,  in  any  one  of  the  forms
  customarily  issued by such insurer, except term insurance, in an amount
  equal to the amount of his protection under such group insurance  policy
  at  the  time  of such termination or reduction, less any amount of life
  insurance remaining in force, except however, in the case of a reduction
  in accordance with item (ii) of subparagraph (B) of this  paragraph,  in
  an  amount  equal to eighty percent of his insurance coverage under such
  group policy immediately prior to such reduction. Under a  group  policy
  issued  pursuant to paragraph twelve, thirteen or fourteen of subsection
  (b) of section four thousand two hundred sixteen  of  this  chapter,  an
  insured  shall  be  entitled  to  convert,  just as if he had terminated
  membership in  the  class  or  classes  eligible  for  coverage,  within
  thirty-one days after notice from the insurer that, in order to continue
  his  coverage  under  the group policy, he must contribute more than one
  hundred thirty-three percent of the net premiums computed  according  to
  the  Commissioners  1960 Standard Group Mortality Table at three percent
  interest.  The  group  policy  may  contain  a  provision  that  if  the
  policyholder  or  insurer shall terminate the policy, the amount of life
  insurance that may be converted shall in no event exceed the  amount  of
  such employee's or member's life insurance protection less any amount of
  life  insurance  for  which  he  may be or may become eligible under any
  group policy issued or reinstated by the same or another insurer  within
  forty-five days after the date of such cessation. However, at the option
  of  such  employee or member, he shall be entitled to have issued to him
  in accordance with the conditions prescribed above,  a  policy  of  life
  insurance only, in any one of such forms, preceded by term insurance for
  a  period  of  one  year  with the premium payable, at the option of the
  employee or member, in any mode customarily offered by the insurer.   In
  addition,  the  group  policy  shall  contain  a  provision  that if the
  coverage of an employee or  member  ceases  because  of  termination  of
  employment  due  to  the  employee's  total  and permanent disability or
  termination of membership  due  to  the  member's  total  and  permanent
  disability,  the  employee  or member, at the option of such employee or
  member, shall be entitled to have  issued  to  him,  a  policy  of  life
  insurance only, in any one of such forms, preceded by term insurance for
  a  period  of  one  year  with the premium payable, at the option of the
  employee or member, in any mode customarily offered by the  insurer,  in
  the  amount  of such employee's or member's life insurance protection in
  effect immediately before termination,  less  the  amount  of  any  life
  insurance  which  is  replaced  with  the same or another insurer within
  forty-five days after cessation of the group life insurance  protection.
  Each  such  group policy shall contain a further provision to the effect
  that upon  the  death  of  any  such  employee  or  member  during  such
  thirty-one  day  period and before any such individual policy has become
  effective, the amount of insurance for which such employee or member was
  entitled to make application shall be payable as a death benefit by  the
  insurer;  provided,  however,  each  such policy may contain a provision
  obligating the policyholder to pay a premium to the insurer for coverage
  extended during such thirty-one day period in the event the extension of
  coverage  is a direct result of the policyholder's voluntary termination
  of the policy and the policyholder replaces coverage  under  the  policy
  within  six  months  of  its termination either with the insurer or with
  another insurer.  The individual conversion policy may provide that  any
  statement  made by the person insured under the group policy relating to
  his insurability under such group policy may be used in  contesting  the
  validity  of the insurance under the individual conversion policy to the
  same extent that such statement could have been used in  contesting  the
  validity  of his insurance under the group policy if his insurance under
  the group policy had not ceased. An individual conversion  policy  shall
  not exclude or restrict liability in the event of suicide of the insured
  after  two years from the date that the insured became covered under the
  group policy. Notwithstanding  the  foregoing,  the  superintendent  may
  require  conversion or continuation of insurance under conditions as set
  forth in a regulation for insureds under a policy issued  in  accordance
  with  paragraph  three  of  subsection  (b) of section four thousand two
  hundred sixteen of this chapter.
    (7) At the option of the employee or member, any converted  policy  or
  policies   shall  provide  coverage  for  the  dependents  or  class  of
  dependents of such employee or member who were insured under  the  group
  policy.  The effective date of the converted policy or policies shall be
  the date of termination of the employee's or  member's  insurance  under
  the  group  policy. The conversion privilege shall be available (A) upon
  termination or reduction of insurance as described in paragraph  six  of
  this  subsection,  (B)  upon  the death of the employee or member to the
  surviving spouse with respect to such spouse and children  as  are  then
  insured  by  the  group  policy,  (C)  to a child upon his attaining the
  limiting age of coverage under the  group  policy  while  insured  as  a
  dependent  thereunder,  and  (D)  upon  the  divorce or annulment of the
  marriage of the employee or member to the spouse  or  former  spouse  of
  such employee or member.
    (8)  That  in  the  event  a  group  life  insurance policy issued for
  delivery in this state  permits  a  certificate  holder  to  convert  to
  another  type  of  life  insurance  within  a  specified  time after the
  happening of an event, such certificate holder shall be notified of such
  privilege and its duration within  fifteen  days  before  or  after  the
  happening  of the event, provided that if such notice be given more than
  fifteen days, but less than ninety days  after  the  happening  of  such
  event, the time allowed for the exercise of such privilege of conversion
  shall  be  extended for forty-five days after the giving of such notice.
  If such notice be not given within ninety days after  the  happening  of
  the  event,  the  time  allowed  for  the  exercise  of  such conversion
  privilege shall expire at the end of such ninety days. Written notice by
  the policyholder given to  the  certificate  holder  or  mailed  to  the
  certificate  holder  at his last known address, or written notice by the
  insurer mailed to the certificate holder at the last  address  furnished
  to the insurer by the policyholder, shall be deemed full compliance with
  the provisions of this paragraph for the giving of notice.
    (9)  That  all new employees of the employer or all new members of the
  labor union or other association or group as defined in this chapter, or
  all new debtors of the vendor or creditor, as the case may  be,  in  the
  groups  or  classes  eligible  for  such insurance must be added to such
  groups or classes for which they are respectively eligible.
    (10) In the case of a policy covering members of  a  labor  union,  or
  other  association  or  group  as  defined in this chapter (other than a
  group as defined in paragraph one or three of subsection (b) of  section
  four  thousand  two  hundred  sixteen  of this chapter, a notice in such
  policy  to the effect that the premium for the renewable term as therein
  provided depends upon the attained ages of the members in the group  and
  increases with advancing ages.
    (11) If the policy is in whole or in part on a plan of insurance other
  than  the  term  plan,  it  shall  contain  a nonforfeiture provision or
  provisions which  in  the  opinion  of  the  superintendent  is  or  are
  equitable  to  the  insured  persons  and  to the policyholder, but this
  paragraph  does  not  require  that  such  policy   contain   the   same
  nonforfeiture   provisions   required   for  individual  life  insurance
  policies.
    (12) In every group plan issued in accordance with paragraph three  of
  subsection  (b)  of  section  four  thousand two hundred sixteen of this
  chapter insuring loans made by production credit associations  organized
  pursuant  to an Act of Congress of the United States, entitled the "Farm
  Credit  Act  of  1933",  approved  June  sixteenth,   nineteen   hundred
  thirty-three as amended, or insuring loans made by a bank, trust company
  or  industrial  bank  to  a borrower engaged in the business of farming,
  crop production or the raising,  breeding,  fattening  or  marketing  of
  livestock for the purpose of such business and other requirements of the
  borrower,  a  provision  that,  upon renewal of the loan commitment each
  year prior to the attainment of age  fifty  by  the  certificate-holder,
  coverage  may  be  renewed  by the certificate-holder without additional
  requirements each year in an amount equal to the loan commitment or  the
  previous  year's  coverage,  whichever is less, unless coverage has been
  previously terminated by action of the certificate-holder,  and  further
  provided  that  the group policy is in full force and effect on the date
  of renewal.
    (b) None of the provisions of subsection  (a)  hereof  relating  to  a
  certificate issued under any group life insurance policy shall be deemed
  applicable  to  any such policy which is issued to a vendor or creditor,
  as defined in section four thousand two hundred sixteen of this  chapter
  and  under the provisions of which no individual certificates are issued
  or are issuable.
    (c) (1) Notwithstanding any provision of law, a person whose  life  is
  insured  under  any  policy of group life insurance, whether or not such
  policy is otherwise subject to this section, is  permitted  to  make  an
  assignment  of  all  or  any  part of his incidents of ownership in such
  insurance, including, without  limitation,  any  right  to  designate  a
  beneficiary  or  beneficiaries  thereunder  and  any  right  to  have an
  individual policy issued upon termination either  of  employment  or  of
  said  policy  of group life insurance, provided that the insurer and the
  group  policyholder  may  prohibit  or  restrict  such   assignment   by
  appropriate policy provisions.
    (2)  This  subsection  shall  be  construed as declaring the law as it
  existed prior to its enactment and not as modifying it.
    (d) The provisions of paragraphs four, five, six, seven,  eight,  nine
  and  ten  of  subsection  (a)  of  this  section  and  paragraph  one of
  subsection (c) of this section shall not apply to policies issued  under
  the  authority  of  subsection (d) of section three thousand two hundred
  five of this article.