2006 Code of Virginia § 38.2-3521.1 - Group accident and sickness insurance definitions

38.2-3521.1. Group accident and sickness insurance definitions.

Except as provided in 38.2-3522.1, no policy of group accident and sicknessinsurance shall be delivered in this Commonwealth unless it conforms to oneof the following descriptions:

A. A policy issued to an employer, or to the trustees of a fund establishedby an employer, which employer or trustees shall be deemed the policyholder,to insure employees of the employer for the benefit of persons other than theemployer, subject to the following requirements:

1. The employees eligible for insurance under the policy shall be all of theemployees of the employer, or all of any class or classes thereof. The policymay provide that the term "employees" shall include the employees of one ormore subsidiary corporations, and the employees, individual proprietors, andpartners of one or more affiliated corporations, proprietorships orpartnerships if the business of the employer and of such affiliatedcorporations, proprietorships or partnerships is under common control. Thepolicy may provide that the term "employees" shall include retiredemployees, former employees and directors of a corporate employer. A policyissued to insure the employees of a public body may provide that the term"employees" shall include elected or appointed officials.

2. The premium for the policy shall be paid either from the employer's fundsor from funds contributed by the insured employees, or from both. Except asprovided in subdivision 3 of this subsection, a policy on which no part ofthe premium is to be derived from funds contributed by the insured employeesmust insure all eligible employees, except those who reject such coverage inwriting.

3. An insurer may exclude or limit the coverage on any person as to whomevidence of individual insurability is not satisfactory to the insurer,except as otherwise prohibited in this title.

B. A policy which is:

1. Not subject to Chapter 37.1 ( 38.2-3727 et seq.) of this title, and

2. Issued to a creditor or its parent holding company or to a trustee ortrustees or agent designated by two or more creditors, which creditor,holding company, affiliate, trustee, trustees or agent shall be deemed thepolicyholder, to insure debtors of the creditor or creditors with respect totheir indebtedness, subject to the following requirements:

a. The debtors eligible for insurance under the policy shall be all of thedebtors of the creditor or creditors, or all of any class or classes thereof.The policy may provide that the term "debtors" shall include:

(1) Borrowers of money or purchasers or lessees of goods, services, orproperty for which payment is arranged through a credit transaction;

(2) The debtors of one or more subsidiary corporations; and

(3) The debtors of one or more affiliated corporations, proprietorships orpartnerships if the business of the policyholder and of such affiliatedcorporations, proprietorships or partnerships is under common control.

b. The premium for the policy shall be paid either from the creditor's funds,or from charges collected from the insured debtors, or from both. Except asprovided in subdivision 3 of this subsection, a policy on which no part ofthe premium is to be derived from funds contributed by insured debtorsspecifically for their insurance must insure all eligible debtors.

3. An insurer may exclude any debtors as to whom evidence of individualinsurability is not satisfactory to the insurer.

4. The total amount of insurance payable with respect to an indebtednessshall not exceed the greater of the scheduled or actual amount of unpaidindebtedness to the creditor. The insurer may exclude any payments which aredelinquent on the date the debtor becomes disabled as defined in the policy.

5. The insurance may be payable to the creditor or any successor to theright, title, and interest of the creditor. Such payment or payments shallreduce or extinguish the unpaid indebtedness of the debtor to the extent ofeach such payment and any excess of the insurance shall be payable to theinsured or the estate of the insured.

6. Notwithstanding the preceding provisions of this section, insurance onagricultural credit transaction commitments may be written up to the amountof the loan commitment. Insurance on educational credit transactioncommitments may be written up to the amount of the loan commitment less theamount of any repayments made on the loan.

C. A policy issued to a labor union, or similar employee organization, whichlabor union or organization shall be deemed to be the policyholder, to insuremembers of such union or organization for the benefit of persons other thanthe union or organization or any of its officials, representatives, oragents, subject to the following requirements:

1. The members eligible for insurance under the policy shall be all of themembers of the union or organization, or all of any class or classes thereof.

2. The premium for the policy shall be paid either from funds of the union ororganization, or from funds contributed by the insured members specificallyfor their insurance, or from both. Except as provided in subdivision 3 ofthis subsection, a policy on which no part of the premium is to be derivedfrom funds contributed by the insured members specifically for theirinsurance must insure all eligible members, except those who reject suchcoverage in writing.

3. An insurer may exclude or limit the coverage on any person as to whomevidence of individual insurability is not satisfactory to the insurer,except as otherwise prohibited in this title.

D. A policy issued (i) to or for a multiple employer welfare arrangement, arural electric cooperative, or a rural electric telephone cooperative asthese terms are defined in 29 U.S.C. 1002, or (ii) to a trust, or to thetrustees of a fund, established or adopted by or for two or more employers,or by one or more labor unions of similar employee organizations, or by oneor more employers and one or more labor unions or similar employeeorganizations, which trust or trustees shall be deemed the policyholder, toinsure employees of the employers or members of the unions or organizationsfor the benefit of persons other than the employers or the unions ororganizations, subject to the following requirements:

1. The persons eligible for insurance shall be all of the employees of theemployers or all of the members of the unions or organizations, or all of anyclass or classes thereof. The policy may provide that the term "employee"shall include the employees of one or more subsidiary corporations, and theemployees, individual proprietors, and partners of one or more affiliatedcorporations, proprietorships or partnerships if the business of the employerand of such affiliated corporations, proprietorships or partnerships is undercommon control. The policy may provide that the term "employees" shallinclude retired employees, former employees and directors of a corporateemployer. The policy may provide that the term "employees" shall includethe trustees or their employees, or both, if their duties are principallyconnected with such trusteeship.

2. The premium for the policy shall be paid from funds contributed by theemployer or employers of the insured persons, or by the union or unions orsimilar employee organizations, or by both, or from funds contributed by theinsured persons or from both the insured persons and the employers or unionsor similar employee organizations. Except as provided in subdivision 3 ofthis subsection, a policy on which no part of the premium is to be derivedfrom funds contributed by the insured persons specifically for theirinsurance must insure all eligible persons, except those who reject suchcoverage in writing.

3. An insurer may exclude or limit the coverage on any person as to whomevidence of individual insurability is not satisfactory to the insurer,except as otherwise prohibited in this title.

E. 1. A policy issued to an association or to a trust or to the trustees of afund established, created, or maintained for the benefit of members of one ormore associations which association or trust shall be deemed thepolicyholder. The association or associations shall:

a. Have at the outset a minimum of 100 persons;

b. Have been organized and maintained in good faith for purposes other thanthat of obtaining insurance;

c. Have been in active existence for at least five years;

d. Have a constitution and bylaws which provide that (i) the association orassociations hold regular meetings not less than annually to further purposesof the members, (ii) except for credit unions, the association orassociations collect dues or solicit contributions from members, and (iii)the members have voting privileges and representation on the governing boardand committees;

e. Does not condition membership in the association on any healthstatus-related factor relating to an individual (including an employee of anemployer or a dependent of an employee);

f. Makes health insurance coverage offered through the association availableto all members regardless of any health status-related factor relating tosuch members (or individuals eligible for coverage through a member);

g. Does not make health insurance coverage offered through the associationavailable other than in connection with a member of the association; and

h. Meets such additional requirements as may be imposed under the laws ofthis Commonwealth.

2. The policy shall be subject to the following requirements:

a. The policy may insure members of such association or associations,employees thereof or employees of members, or one or more of the preceding orall of any class or classes thereof for the benefit of persons other than theemployee's employer.

b. The premium for the policy shall be paid from funds contributed by theassociation or associations, or by employer members, or by both, or fromfunds contributed by the covered persons or from both the covered persons andthe association, associations, or employer members.

3. Except as provided in subdivision 4 of this subsection, a policy on whichno part of the premium is to be derived from funds contributed by the coveredpersons specifically for their insurance must insure all eligible persons,except those who reject such coverage in writing.

4. An insurer may exclude or limit the coverage on any person as to whomevidence of individual insurability is not satisfactory to the insurer,except as otherwise prohibited in this title.

F. A policy issued to a credit union or to a trustee or trustees or agentdesignated by two or more credit unions, which credit union, trustee,trustees, or agent shall be deemed the policyholder, to insure members ofsuch credit union or credit unions for the benefit of persons other than thecredit union or credit unions, trustee or trustees, or agent or any of theirofficials, subject to the following requirements:

1. The members eligible for insurance shall be all of the members of thecredit union or credit unions, or all of any class or classes thereof.

2. The premium for the policy shall be paid by the policyholder from thecredit union's funds and, except as provided in subdivision 3 of thissubsection, must insure all eligible members.

3. An insurer may exclude or limit the coverage on any person as to whomevidence of individual insurability is not satisfactory to the insurer.

G. A policy issued to a health maintenance organization as provided insubsection B of 38.2-4314.

(1998, c. 154.)