There is a newer version of the New York Consolidated Laws
2013 New York Consolidated Laws
ISC - Insurance
Article 42 - (4202 - 4241) LIFE INSURANCE COMPANIES AND ACCIDENT AND HEALTH INSURANCE COMPANIES AND LEGAL SERVICES INSURANCE COMPANIES
4216 - Group life insurance; premium requirements; notice of conversion; filing of compensation.
NY Ins L § 4216 (2012) What's This?
§ 4216. Group life insurance; premium requirements; notice of
conversion; filing of compensation. (a) (1) In this chapter:
(A) "Group life insurance" means that form of life insurance covering
any one of the groups specified in subsection (b) hereof, which is
written under a policy issued to the policyholder as hereinafter
defined, and which in all other respects conforms to the requirements of
subsection (b) hereof.
(B) "Certificate holder," as used in relation to a group life
insurance policy, means the person to whom a certificate evidencing such
insurance is issued under any such policy, as hereinafter provided.
(2) In this section, for the purposes of insurance hereunder:
"employees" may be deemed to include (i) the officers, managers,
employees and retired employees of the employer and of subsidiary or
affiliated corporations of a corporate employer, and the individual
proprietors, partners, employees and retired employees of affiliated
individuals and firms controlled by the employer through stock
ownership, contract or otherwise; (ii) the individual proprietor or
partner if the employer is an individual proprietor or a partnership;
(iii) as used in paragraph one of subsection (b) hereof, the directors
of the employer and of subsidiary or affiliated corporations of a
corporate employer; and (iv) as used in paragraphs four and five of
subsection (b) hereof, the trustees or their employees, or both, if
their duties are principally connected with such trusteeship.
(b) Any life insurance company authorized to do business in this state
may deliver in this state policies of group life insurance only as
follows:
(1) A policy issued to an employer or to a trustee or trustees of a
fund established by an employer, which employer or trustees shall be
deemed the policyholder, insuring with or without evidence of individual
insurability satisfactory to the insurer, employees of such employer,
and insuring, except as hereinafter provided, all of such employees or
all of any class or classes thereof determined by conditions pertaining
to the employment, or by a combination of such conditions and conditions
pertaining to the family status of the employee, for amounts of
insurance on each person insured based upon some plan which will
preclude individual selection. However, such a plan may permit a limited
number of selections by employees if the selections offered utilize a
consistent pattern of grading the amounts of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
The premium for the policy shall be paid by the policyholder, either
wholly from the employer's funds or from funds contributed by the
insured employees, or from funds contributed jointly by the employer and
employees. If all or part of the premium is to be derived from funds
contributed by the insured employees, such policy must insure a minimum
of fifty percent or five of such eligible employees whichever is fewer.
Except as provided in subsection (b) of section four thousand two
hundred thirty-one of this article and in paragraph five of subsection
(a) of section three thousand two hundred twenty of this chapter, such
policy shall provide for payment of all benefits thereunder, to the
person insured or to some beneficiary or beneficiaries other than the
employer, and shall provide for the issuance of a certificate to the
policyholder for delivery to the person insured or to such beneficiary,
as evidence of such insurance.
(2) A policy issued to a labor union, which shall be deemed the
policyholder insuring, with or without evidence of individual
insurability satisfactory to the insurer, not less than twenty-five
members of such union, and insuring, except as hereinafter provided all
of the members of such union or all of any class or classes thereof
determined by conditions pertaining to their employment or membership in
the union, or both, and who are actively engaged in their occupations,
for amounts of insurance on each person insured based upon some plan
which will preclude individual selection. However, such a plan may
permit a limited number of selections by members if the selections
offered utilize a consistent pattern of grading the amounts of insurance
for individual group members so that the resulting pattern of coverage
is reasonable. The premium on such policy may be paid by the union, by
the members, or by the union and its members jointly. If the premium is
paid by the members or by the union and its members jointly such policy
must insure not less than fifty percent of such eligible members or, if
less, fifty or more of such members. Except as provided in paragraph
five of subsection (a) of section three thousand two hundred twenty of
this chapter, such policy shall provide for the payment of benefits to
the person insured or to some beneficiary or beneficiaries, other than
the union or any of its officials, representatives or agents, and shall
provide for the issuance of a certificate to the union for delivery to
the person insured or to such beneficiary, as evidence of such
insurance. Any such policy may vary from the foregoing requirements, as
follows:
(A) if the policy is cancellable at the option of the insurer at the
end of any policy year and if the basis of premium rates may be changed
by the insurer at the beginning of any policy year, all members of such
labor union may be insured thereunder;
(B) if and when members of such union apply for and pay for additional
amounts of insurance, a smaller percentage of such members than fifty
percent may, with evidence of individual insurability satisfactory to
the insurer, be insured thereunder for such additional amounts.
(3) (A) A policy issued to a creditor or vendor, or to a trustee or
agent designated by two or more creditors or vendors, which creditor,
vendor, trustee, or agent shall be deemed the policyholder, except as
hereinafter provided.
(B) The policy shall insure all of the members, but may exclude any as
to whom evidence of individual insurability is not satisfactory to the
insurer, of a group of debtors or vendees, defined as follows:
(i) all of the borrowers, or borrowers and guarantors of borrowers, or
intended borrowers (under a program for defraying the cost of attendance
of a student at a college or university or at an elementary or secondary
school providing education required for minors, which program includes
provision for immediate periodic payments by the parent or guardian of
such student and a loan commitment to such parent and guardian by a
financial institution, or by or on behalf of a college or university or
such an elementary or secondary school to defray the cost of attendance
at such college or university or elementary or secondary school in
excess of the accumulated periodic payments by the parent or guardian)
from one financial institution and its subsidiary or affiliated
companies, or from two or more creditors or vendors so designating such
trustee, trustees or agent, or
(ii) all of the purchasers of securities, merchandise or other
property from one vendor, or from two or more vendors so designating
such trustee or agent, or
(iii) all of any class or classes of such debtors or purchasers
determined by conditions pertaining to the type of indebtedness or
purchase.
(C) The policy may specify the ages to which the insurance provided
shall be limited, provided however that if the insurance terminates at a
particular age, the age at which it terminates shall be prominently
displayed on the application for insurance.
(D) If the agreement provides for repayment in instalments, the
insurance may be continued for the duration of the debt over a period of
not more than thirty-five years from the date the debt is first
incurred; otherwise the insurance may be continued for a period not in
excess of eighteen months except that such insurance may be continued
for an additional period not exceeding six months in the case of
default, extension or recasting of the loan.
(E) Notwithstanding anything in this paragraph to the contrary,
(i) the insurance of borrowers, who incur indebtedness arising from
the granting of policy loans pursuant to policy provisions therefor,
provided under a policy issued to the insurance company granting the
policy loan, may be continued for the duration of the indebtedness,
(ii) under a plan approved by the superintendent the insurance of
debtors with respect to an agreement which does not provide for
repayment in instalments may be continued for the duration of the
indebtedness but not more than seven years from the date the
indebtedness is incurred, and
(iii) the insurance of persons who are tenants or shareholders of a
mutual or other housing corporation (organized pursuant to the
provisions of the private housing finance law and regulated by such
statute as to rent, dividends and profits) under a policy issued with
identifiable charges or fixed amounts of premiums to such corporation or
to a trustee or trustees or agent designated by one or more such
corporations may be continued for the term of the tenant's lease with
such corporation or thirty-six months or whichever is the greater
period, and the amount of insurance with respect to any person insured
under such policy may be a fixed amount not greater than the lesser of
fifty-five thousand dollars or an amount equal to thirty-six times the
monthly instalments due under such lease.
(F) The benefits of any policy authorized under this paragraph shall
be payable to the policyholder; but the amount of any benefit received
by the policyholder thereunder not in excess of the actual indebtedness
shall be applied by the policyholder to the discharge of any obligation
of the person insured, or his personal representative, to the
policyholder, creditor or his assignee and the amount of any benefit
received by the policyholder thereunder in excess of the actual
indebtedness shall be payable to a beneficiary named by the debtor or,
if none, then either to the estate of the debtor or under the provision
of a facility of payment clause.
(G) No such group shall be eligible for insurance hereunder unless the
new entrants to such group number at least twenty-five persons yearly.
(H) The premium for the policy shall be paid by the policyholder,
either from the creditor's or vendor's funds, or from charges collected
from the insured debtors or purchasers, or from both. A policy on which
all or part of the premium to be derived from the collection from the
insured debtors or purchasers of identifiable charges not required of
uninsured debtors or purchasers may be issued only if the policy
reserves to the insurer the right to require evidence of individual
insurability if less than seventy-five percent of the new entrants in
any year become insured and provided that such policy shall not include,
in the class or classes of debtors or purchasers eligible for insurance,
debtors or purchasers under obligations outstanding at its date of issue
without evidence of individual insurability unless at least seventy-five
percent of the then eligible debtors or purchasers elect to pay the
required charges.
(I) The policy may be issued to an assignee to whom such creditor or
vendor has transferred all of its right, title and interest to the
unpaid indebtedness, or to the unpaid purchase price, under all such
agreements made by it.
(J) The amount of insurance on any person insured under a policy shall
not at any time exceed:
(i) in all cases except as hereinafter provided the lesser of
fifty-five thousand dollars and the amount of unpaid indebtedness or the
amount of the purchase price unpaid by such person;
(ii) in the case of a loan commitment pursuant to the hereinabove
program for defraying the cost of attendance of a student at a college
or university or at such an elementary or secondary school, the lesser
of fifty-five thousand dollars and the total of the unpaid balance of
the scheduled periodic payments whether due or not due and the amount of
any outstanding loan commitment pursuant to such a program; or
(iii) in the case of a transaction secured by a real estate mortgage,
the lesser of the sum of two hundred twenty thousand dollars and the
amount of the indebtedness so secured.
(iv) in the case of indebtedness arising from a credit card account
where there is no specific charge for insurance, the lesser of the sum
of one hundred thousand dollars or the amount of unpaid indebtedness.
(K) (i) With respect to loans made by production credit associations
organized pursuant to the federal Farm Credit Act of 1933, 12 U.S.C. §§
1131c - 1138c, and with respect to 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 purposes of such business and other requirements of
the borrower, the amount of insurance may exceed the unpaid indebtedness
and shall not be limited as to amount except that the insurance shall
not exceed the greater of the loan commitment or the outstanding balance
of the loan at the inception of the period for which the borrower is
insured.
(ii) With respect to loans made by Federal Land Banks established
pursuant to an Act of Congress of the United States entitled the
"Federal Farm Loan Act", approved July seventeenth, nineteen hundred
sixteen, as amended, the amount of insurance on any person insured under
the policy shall not at any time exceed the amount of the unpaid
indebtedness at the inception of the period for which premiums are paid,
but shall not otherwise be limited as to amount.
(L) The superintendent shall prescribe from time to time regulations
determining the procedures, terms and conditions applicable to a policy
issued pursuant to this paragraph to the trustee or agent designated by
two or more creditors or vendors.
(M) Each insurer shall file with the superintendent its forms of
policies, certificate statements and applications pertaining to credit
insurance together with its premium rates for such insurance and the
same shall be subject to his approval. The superintendent shall not
approve any such forms if the premium charged is unreasonable in
relation to the benefits provided.
(N) For the purposes of this paragraph: (i) "creditor" includes a
lessor of real or personal property, (ii) "borrower" includes a lessee
of real or personal property, and (iii) "indebtedness" includes rentals
payable under the lease of real or personal property.
(4) A policy issued to a trustee or trustees of a fund established or
participated in by two or more employers or by one or more labor unions,
or by one or more employers and one or more labor unions, which trustee
or trustees shall be deemed the policyholder, to insure employees of the
employers or members of the unions for the benefit of persons other than
the employers or the unions, subject to the following requirements:
(A) The persons eligible for insurance shall be all of the employees
of the employers or all of the members of the unions, or all of any
class or classes thereof determined by conditions pertaining to their
employment, or to membership in the unions, or to both.
(B) The premium for the policy shall be paid by the trustees either
wholly from funds contributed by the employer or employers of the
insured persons or by the union or unions, or by both, or from funds
contributed by the insured persons, or jointly from such funds and funds
contributed by the insured persons specifically for their insurance. A
policy on which no part of the premium is to be derived from funds
contributed by the insured persons specifically for their insurance must
insure all eligible persons, excluding any as to whom evidence of
individual insurability is not satisfactory to the insurer.
(C) The policy shall insure at least fifty persons at date of issue.
(D) The amounts of insurance under the policy shall be based upon some
plan precluding individual selection either by the insured persons or by
the policyholder, employers, or unions. However, such a plan may permit
a limited number of selections by employees or members if the selections
offered utilize a consistent pattern of grading the amounts of insurance
for individual group members so that the resulting pattern of coverage
is reasonable.
(E) With respect to a policy issued to a trustee or trustees of a fund
established by one or more labor unions, or by one or more employers and
one or more labor unions the proposed insured must submit, and the
insurer must obtain, a written certification that a reasonable number of
comparative bids have been obtained from different insurers and that
such bids have been considered by the trustees before making a decision
concerning which bid to accept. Such decision must be made at a
trustees' meeting held on a date certain, and a copy of the minutes of
such meeting must be attached to such certification.
(5) A policy issued to a trustee or trustees of a fund established or
participated in by the employer members of a trade association, which
trustee or trustees shall be deemed the policyholder, to insure
employees of such employers for the benefit of persons other than the
association or the employers, subject to the following requirements:
(A) The policy may be issued only if:
(i) the association has been in existence for at least two years and
was formed for purposes principally other than obtaining insurance, and
(ii) the participating employers, meaning such employer members whose
employees are to be insured, constitute at date of issue at least fifty
percent of the total employers eligible to participate, unless the total
number of persons covered at date of issue exceeds six hundred, in which
event such participating employers must constitute at least twenty-five
percent of such total employers, in either case omitting from
consideration any employer whose employees are already covered for group
life insurance;
(B) The persons eligible for insurance under the policy shall be all
of the employees of the participating employers, or all of any class or
classes thereof determined by conditions pertaining to their employment.
(C) The premium for the policy shall be paid by the trustee or
trustees either wholly from funds contributed by the employers or by the
employees or funds contributed jointly by the employers and the
employees. A policy on which no part of the premium so payable is to be
derived from funds contributed by the insured employees must insure all
eligible employees, excluding any as to whom evidence of individual
insurability is not satisfactory to the insurer;
(D) The policy must cover at least fifty employees at date of issue;
(E) The amounts of insurance under the policy must be based upon some
plan precluding individual selection either by the employees or by the
policyholder or the employer. However, such a plan may permit a limited
number of selections by employees if the selections offered utilize a
consistent pattern of grading the amount of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
(6) A policy issued to a duly organized association of civil service
employees which shall include in its membership not less than five
thousand civil service employees having a common employer, or to a duly
organized association of teachers having a membership of not less than
five thousand, which association, in either event, shall be deemed the
policyholder, and which shall have been formed and is maintained for
purposes other than to effect group life insurance on its members. Such
policy shall insure only members of such association, with or without
evidence of individual insurability satisfactory to the insurer, based
upon a plan which will preclude individual selection. However, such a
plan may permit a limited number of selections by members if the
selections offered utilize a consistent pattern of grading the amounts
of insurance for individual group members so that the resulting pattern
of coverage is reasonable. The premium on such policy may be paid by the
association or by the association and the insured members jointly or by
the insured members alone. Every member of such association in good
standing shall have opportunity to apply for such insurance and not less
than sixty percent of the eligible members in good standing may be so
insured. Such policy shall provide for the payment of benefits, except
policy dividends, to the person insured or to some beneficiary or
beneficiaries, other than the association or any of its officers or
directors, as such, and shall also provide for the issuance of a
certificate to the association for delivery to the person insured or to
such beneficiary, as evidence of such insurance.
(7) A policy insuring the members of one or more troops or units of
the state troopers or state police of any state, issued to the
commanding officer of the state troopers or state police, who shall be
deemed the policyholder, the premium on which is to be paid by the
members insured; or a policy covering the members of one or more duly
incorporated policemen's benevolent associations or of one or more
associations or organizations of uniformed firemen or volunteer
firefighters or volunteer ambulance workers which association or
organization shall have been in existence for at least two years prior
to the issuance of such policy and which shall have twenty-five members
at the time of the issuance of such policy, which shall be issued to
such association or to a trustee or trustees of a fund established, or
participated in, by one or more of such associations or organizations as
the policyholder. If the opportunity to take such insurance is offered
to all eligible members of a unit of such state troopers or state
police, or to all eligible members of such incorporated policemen's
benevolent association or of an association or organization of uniformed
firemen, volunteer firefighters, then not less than fifty percent of
such members or, if less, fifty or more of such members may be so
insured. If the insurance is limited to those eligible members who are
employed as state troopers, policemen, firemen or volunteer ambulance
workers, then not less than sixty percent or five hundred of such
members, whichever is less, may be so insured. Such policy shall provide
for the payment of benefits, except policy dividends, to the person
insured or to some beneficiary or beneficiaries, other than such
commanding officer or such association or any of its officials, as such,
and shall also provide for the issuance of a certificate to the
policyholder for delivery to the person insured or to such beneficiary,
as evidence of such insurance. For the purposes of this paragraph any
association currently holding premium dividends as a result of policies
issued under this section shall be permitted to maintain said dividends
for the general purposes of the entire membership. For the purposes of
this paragraph the term "eligible members of an association of volunteer
firefighters or volunteer ambulance workers" means members who perform
services in fire-fighting duties or members of a volunteer exempt fire
benevolent association who are entitled to benefits from the
expenditures of foreign fire insurance tax moneys, including, inactive
exempt volunteer firefighters as defined by section two hundred of the
general municipal law or in ambulance-related duties, respectively. The
amounts of insurance may be based upon a plan which permits a limited
number of selections by the members if the selections offered utilize a
consistent pattern of grading the amounts of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
(8) (A) A policy issued to a municipal corporation or a public housing
authority, which corporation or authority shall be deemed the
policyholder, insuring, with or without evidence of individual
insurability satisfactory to the insurer, not less than twenty-five
employees of such corporation or authority, except that in each of the
villages of Croton-on-Hudson and Lloyd Harbor not less than ten such
employees, and insuring all of such employees or all of any class or
classes thereof determined by conditions pertaining to the employment,
for amounts of insurance on each person insured based upon some plan
which will preclude individual selection. However, such a plan may
permit a limited number of selections by employees if the selections
offered utilize a consistent pattern of grading the amounts of insurance
for individual group members so that the resulting pattern of coverage
is reasonable.
(B) The premium for the policy may be paid either by the policyholder
or by the insured employees, or both, in the manner provided in section
ninety-three of the general municipal law. If a part of the premium is
to be derived from funds contributed by insured employees, the policy
must insure not less than seventy-five percent of all eligible
employees. Such policy shall provide for the payment of benefits to the
person insured or to some beneficiary or beneficiaries other than the
municipal corporation or the public housing authority, and shall also
provide for the issuance of a certificate to the policyholder for
delivery to the person insured or to such beneficiary, as evidence of
such insurance. A policy on which no part of the premium is to be
derived from funds contributed by the insured employees specifically for
their insurance must insure all eligible employees, or all except any as
to whom evidence of individual insurability is not satisfactory to the
insurer.
(C) Subject to the constitution and general laws of this state, every
municipal corporation or public housing authority is empowered to
contract by its fiscal or disbursing officer with an authorized life
insurance company for group life insurance on the lives of its
employees.
(9) A policy issued to the state covering, with or without evidence of
individual insurability satisfactory to the insurer, persons who are
managerial or confidential employees, or retired managerial or
confidential employees, of governments or public employers for the
purposes of article fourteen of the civil service law. The state shall
be deemed to be the policyholder. With respect to its employees, the
state and each other participating government or public employer shall
be deemed to be the employer. The premiums or subscription charges may
be derived from funds contributed entirely by insured employees and
retired employees or by insured employees and retired employees and the
employer jointly or entirely by the employer. If the premiums or
subscription charges are derived from funds contributed wholly by the
employer, all eligible employees are to be covered. If all or part of
the premiums or subscription charges are to be derived from funds
contributed by insured employees and if the opportunity to take such
insurance is offered to all eligible employees of an employer, then such
policy must cover not less than forty percent of such employees, the
calculation being with respect to each employer individually. The
amounts of insurance may be based upon a plan which permits a limited
number of selections by the employees if the selections offered utilize
a consistent pattern of grading the amounts of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
(10) A policy issued to an association, or to a trustee or trustees of
a fund established, created or maintained for the benefit of members of
one or more associations, all of whose eligible members have the same
profession, trade or occupation, which association or associations have
been organized and maintained in good faith for purposes principally
other than that of obtaining insurance and have been in active existence
for at least two years. The policy shall insure members, or employees of
members, of such association or associations, and except as provided in
paragraph five of subsection (a) of section three thousand two hundred
twenty of this chapter, such policy shall provide for the payment of
benefits to the person insured or some beneficiary or beneficiaries
other than employers and the association or associations, or any
officials, representatives, trustees or agents thereof and shall provide
for the issuance of a certificate to the persons insured or such
beneficiary as evidence of such insurance. The members or employees
eligible for the insurance under the policy shall be all the members who
have not attained any limiting age specified in the policy, or all such
members and their employees, or all of any class or classes thereof
determined by conditions pertaining to their employment or to
association membership or both. The premium for the policy shall be paid
by the association or trustee or trustees either from funds contributed
by the association or by the insured individuals, or from funds
contributed jointly by the association and insured individuals
specifically for their insurance. A policy on which all or part of the
premium is to be derived from funds contributed by the insured
individuals specifically for their insurance must insure at least fifty
percent of the then eligible individuals or a minimum of two hundred
individuals, whichever is less, excluding any as to whom evidence of
individual insurability is not satisfactory to the insurer. A policy on
which no part of the premium is to be derived from funds contributed by
the insured individuals specifically for their insurance must insure all
eligible individuals, excluding any as to whom evidence of individual
insurability is not satisfactory to the insurer. The policy must insure
at least one hundred individuals at date of issue. The amounts of
insurance on employees or members insured under the policy shall be
based upon some plan precluding individual selection. However, such a
plan may permit a limited number of selections by employees or members
if the selections offered utilize a consistent pattern of grading the
amounts of insurance for individual group members so that the resulting
pattern of coverage is reasonable. If a policy dividend is declared or a
reduction in rate is made under such a policy, the excess, if any, of
the aggregate dividends or rate reductions under the policy over the
aggregate expenditure for insurance under such policy made from
association or employer funds, including expenditures made in connection
with administration of such policy, shall be applied by the policyholder
for the sole benefit of the insured individuals.
(11) A policy, covering persons employed pursuant to 32 U.S.C. § 709,
members of the national guard on full-time training duty under
provisions of such title 32, or on active duty or active duty for
training under provisions of title 10 of the United States Code, under
the full-time manning program, issued to the adjutant general, who shall
be deemed the policyholder, or to a trustee or trustees of a fund
established, created, or maintained for the benefit of such individuals
insured, which trustee or trustees shall be deemed the policyholder, the
premium of which is to be paid by the individuals insured either
directly or by deduction from wages or salary. The policy must insure at
least fifty percent or four hundred of the individuals eligible for such
insurance, whichever is less. Such policy shall provide for the payment
of benefits to the individual insured or to some beneficiary or
beneficiaries other than to the aforesaid trustee or trustees or the
adjutant general. The policy shall also provide for the issuance of a
certificate to the policyholder for delivery to the individual insured
or to such beneficiary, as evidence of such insurance. The amounts of
insurance may be based upon a plan which permits a limited number of
selections by the members provided the selections offered utilize a
consistent pattern of grading the amounts of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
(12) A policy issued to an association, or the trustee or trustees of
a trust established, or participated in, by one or more associations, to
insure association members subject to the following:
(A) Each association shall have (i) A minimum of two hundred insured
members at the policy's date of issue;
(ii) Been organized and maintained in good faith for purposes
principally other than that of obtaining insurance;
(iii) Been in active existence for at least two years; and
(iv) A constitution and by-laws which provide that:
(I) The association holds regular meetings not less than annually to
further purposes of the association;
(II) The association collects dues or solicits contributions from
members; and
(III) The members have voting privileges and representation on the
governing board and committees.
(B) The premium for the policy shall be paid by the association or
trustees either wholly from funds contributed by the association or by
the insured individuals, or from funds contributed jointly by the
association and insured individuals. A policy on which no part of the
premium is to be derived from funds contributed by the insured
individuals specifically for their insurance must insure all eligible
individuals excluding any as to whom evidence of individual insurability
is not satisfactory to the insurer.
(C) The amounts of insurance under the policy shall be based upon some
plan precluding individual selection either by the insured persons or by
an association. However, such a plan may permit a number of selections
by the association, if the selections offered utilize a consistent
pattern of grading the amounts of insurance so that the resulting
pattern of coverage is reasonable. Furthermore, such plan may permit a
limited number of selections by members if the selections offered
utilize a consistent pattern of grading the amounts of insurance for
individual group members so that the resulting pattern of coverage is
reasonable.
(D) Except as provided in paragraph five of subsection (a) of section
three thousand two hundred twenty of this chapter, such policy shall
provide for the payment of benefits to the person insured or to some
beneficiary or beneficiaries, other than the association or any
officials, representatives, trustees or agents thereof and shall provide
for the issuance of a certificate to the persons insured or such
beneficiary, as evidence of such insurance.
(E) The premiums charged must be reasonable in relation to the
benefits provided.
(13) A policy issued to any organization, or the trustee or trustees
of a trust established, or participated in, by one or more of such
organizations to insure certain persons subject to the following:
(A) The organization must be:
(i) A bank, retailer or other issuer of a credit card, charge card or
payment card which can be used to buy goods or services, and the policy
must insure holders of that card;
(ii) A bank, savings and loan association, credit union, mutual fund,
money market fund, stockbroker or other similar financial institution
regulated by state or federal law, and the policy must insure the
depositors, account holders or members of that institution.
(B) Except for a credit union where the premium shall be paid entirely
from funds contributed by the credit union, the organization or
organizations shall have a minimum of two hundred insured persons at the
policy's date of issue.
(C) The premium for the policy shall be paid by the organization or
trustees either wholly from funds contributed by the organization or by
the insured individuals, or from funds contributed jointly by the
organization and insured individuals. A policy on which no part of the
premium is to be derived from funds contributed by the insured
individuals specifically for their insurance must cover all eligible
individuals excluding any as to whom evidence of individual insurability
is not satisfactory to the insurer.
(D) The amounts of insurance under the policy shall be based upon some
plan precluding individual selection either by the insured persons or by
the organization. However, such plan may permit a number of selections
by the organization if the selections offered utilize a consistent
pattern of grading the amounts of insurance so that the resulting
pattern of coverage is reasonable. Furthermore, such a plan may permit a
limited number of selections by members if the selections offered
utilize a consistent pattern of grading the amounts of insurance for
individual group members so that the resulting pattern of coverage is
reasonable.
(E) Except as provided in paragraph five of subsection (a) of section
three thousand two hundred twenty of this chapter, such policy shall
provide for the payment of benefits to the persons insured or to some
beneficiary or beneficiaries other than the organization, or any
official, representatives, trustees or agents thereof, and shall provide
for the issuance of a certificate to the persons insured or such
beneficiary, as evidence of such insurance.
(F) The premiums charged must be reasonable in relation to the
benefits provided.
(14) A policy issued to insure any other group approved by the
superintendent upon a finding that:
(A) There is a common enterprise or economic or social affinity or
relationship;
(B) The premiums charged are reasonable in relation to the benefits
provided; and
(C) The issuance of the policy would result in economies of
acquisition or administration, would be actuarially sound, and would not
be contrary to the best interest of the public. The superintendent shall
promulgate regulations setting forth any such groups that have been
accepted as qualifying pursuant to this paragraph.
(c) (1) No domestic, foreign or alien life insurance company shall be
permitted to do business in this state if it hereafter issues, within or
without this state, any policy of group life insurance which on its
issuance does not appear to be self-supporting on reasonable assumptions
as to interest, mortality and expense.
(2) Anything in this chapter to the contrary notwithstanding, any
group life insurance policy issued or delivered in this state may
provide for readjustment of the rate of premium based on the experience
thereunder, at the end of the first year or of any subsequent year of
insurance thereunder, and such readjustment may be made retroactive only
for such policy year. Any such rate readjustment shall be computed on a
basis which is equitable to all group life insurance policies.
(d) In the event a group life insurance policy hereafter 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 subsection for the giving of notice.
(e) Each domestic insurer and each foreign or alien insurer doing
business in this state shall file with the superintendent its schedule
of rates of commissions, compensation and other fees or allowances to
agents and brokers pertaining to the solicitation or sale of group life
insurance and of fees or allowances, exclusive of amounts payable to
persons who are in the regular employ of the insurer other than as
agent, to any individuals, firms or corporations pertaining to the
service or administration of group life insurance, whether transacted
within or without this state. An insurer may revise such schedules from
time to time, and shall file such revised schedules with the
superintendent. No insurer shall pay to an agent, agents, broker or
brokers or any combination of licensees for the solicitation or sale of
a policy of group life insurance or for any other purpose related to
such group insurance any commission, compensation or other fees or
allowances in excess of that determined on the basis of the schedules of
such insurer as then on file with the superintendent; nor shall such
insurer pay for services pertaining to the service or administration
thereof to any individual, firm or corporation any fees, commissions or
allowances in excess of that determined on the basis of the schedules of
such insurer as then on file with the superintendent or for such
services except such as are rendered in behalf of such insurer,
provided, however, nothing contained herein shall apply to or affect the
computation of dividends or experience rating credits.
(f) Any policy of group life insurance may include provisions for the
payment by the insurer of life insurance benefits upon the death of the
spouse of the insured employee or member or his or her child dependent
upon him or her for support and maintenance or any other person
dependent upon the insured employee or member, provided that insurance
upon the life of the spouse or other person shall not exceed the amount
of insurance for which the employee or member is eligible, nor shall the
insurance upon the life of each dependent child so insured exceed
twenty-five thousand dollars. A policy of insurance issued in accordance
with paragraph three of subsection (b) of this section, while it may
provide coverage for a spouse of the insured employee or member, it
shall not, however, provide coverage for a dependent child of the
insured employee or member. An insurer providing group life insurance
for a spouse or dependent children shall require evidence of
insurability sufficient to protect against substantial adverse
selection.
(g) An insurer authorized or licensed to do business in this state may
solicit or make available credit life insurance coverage in this state
as provided for in paragraph three of subsection (b) of this section
under a policy of group life insurance only if the policy is delivered
to policyholders described in and conforming to the definition in
paragraph three of subsection (b) of this section, and with respect to
all credit transactions entered into in this state, the policy fully
complies with the requirements of paragraph twelve of subsection (a) of
section three thousand two hundred twenty of this chapter.
(h)(1) Any dividend hereafter apportioned on any participating group
insurance policy, or any rate reduction hereafter made or continued on
any non-participating group policy for the first or any subsequent year
of insurance under any such policy heretofore or hereafter issued under
paragraph twelve, thirteen or fourteen of subsection (b) of this
section, may be applied to reduce the policyholder's part of the cost of
such policy, except that the excess, if any, of the insured's aggregate
contribution under the policy over the net cost (gross premium less
dividends or rate reductions) of the insurance shall be applied at the
discretion of the insurer either as a cash payment to the insured or to
reduce the insured's premium, unless the insured assigns the dividend or
rate reduction to the policyholder. If a dividend or rate reduction is
payable upon termination of the policy the insurer shall either make
payment to the insured or to the policyholder upon receipt of a
certification from the policyholder that the dividend or rate reduction
will be distributed by the policyholder to the insureds or applied to
reduce the insured's premium.
(2) The provisions of paragraph one of this subsection shall apply to
New York residents insured under a policy issued in any other
jurisdiction to a group which is not of the type described in paragraphs
one through eleven of subsection (b) of this section.
(i) (1) The provisions of subsections (d), (f) and (h) of this section
shall not apply to policies issued under the authority of subsection (d)
of section three thousand two hundred five of this chapter, provided
such policies are issued in compliance with the requirements of
subsection (d) and subsection (e) of section three thousand two hundred
five of this chapter.
(2) Any life insurance company authorized to do business in this state
may deliver in this state policies of group insurance issued to an
employer or to the trustee of a fund established by one or more
employers, or one or more employers and one or more labor unions without
complying with the provisions of paragraphs one and four of subsection
(b) of this section where group insurance is issued under the authority
of subsection (d) or subparagraph (B) of paragraph (1) of subsection (a)
of section three thousand two hundred five of this chapter, provided
that, prior to or at the commencement of coverage on any person under a
policy issued under the authority of such subparagraph:
(A) the employer providing such insurance coverage or causing such
coverage to be issued notifies the prospective insured in writing: (i)
of the intent to insure the employee's life, specifying in such notice
the maximum face amount for which the employee could be insured at the
time the contract is issued; and (ii) that the employer or policyholder
will be a beneficiary of any proceeds payable upon the death of the
employee; and
(B) the prospective insured employee consents in writing to such
coverage.
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