§ 4216 — Group life insurance; premium requirements; notice of conversion; filing of compensation

New York § 4216

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 42: Life Insurance Companies and Accident and Health Insurance Companies and Legal Services Insurance Companies

Text

§ 4216. Group life insurance; premium requirements; notice of\nconversion; filing of compensation. (a) (1) In this chapter:\n (A) "Group life insurance" means that form of life insurance covering\nany one of the groups specified in subsection (b) hereof, which is\nwritten under a policy issued to the policyholder as hereinafter\ndefined, and which in all other respects conforms to the requirements of\nsubsection (b) hereof.\n (B) "Certificate holder," as used in relation to a group life\ninsurance policy, means the person to whom a certificate evidencing such\ninsurance is issued under any such policy, as hereinafter provided.\n (2) In this section, for the purposes of insurance hereunder:\n"employees" may be deemed to include (i) the officers, managers,\nemployees and retired employees of the employer and of subsidiary or\naffiliated corporations of a corporate employer, and the individual\nproprietors, partners, employees and retired employees of affiliated\nindividuals and firms controlled by the employer through stock\nownership, contract or otherwise; (ii) the individual proprietor or\npartner if the employer is an individual proprietor or a partnership;\n(iii) as used in paragraph one of subsection (b) hereof, the directors\nof the employer and of subsidiary or affiliated corporations of a\ncorporate employer; and (iv) as used in paragraphs four and five of\nsubsection (b) hereof, the trustees or their employees, or both, if\ntheir duties are principally connected with such trusteeship.\n (b) Any life insurance company authorized to do business in this state\nmay deliver in this state policies of group life insurance only as\nfollows:\n (1) A policy issued to an employer or to a trustee or trustees of a\nfund established by an employer, which employer or trustees shall be\ndeemed the policyholder, insuring with or without evidence of individual\ninsurability satisfactory to the insurer, employees of such employer,\nand insuring, except as hereinafter provided, all of such employees or\nall of any class or classes thereof determined by conditions pertaining\nto the employment, or by a combination of such conditions and conditions\npertaining to the family status of the employee, for amounts of\ninsurance on each person insured based upon some plan which will\npreclude individual selection. However, such a plan may permit a limited\nnumber of selections by employees if the selections offered utilize a\nconsistent pattern of grading the amounts of insurance for individual\ngroup members so that the resulting pattern of coverage is reasonable.\nThe premium for the policy shall be paid by the policyholder, either\nwholly from the employer's funds or from funds contributed by the\ninsured employees, or from funds contributed jointly by the employer and\nemployees. If all or part of the premium is to be derived from funds\ncontributed by the insured employees, such policy must insure a minimum\nof fifty percent or five of such eligible employees whichever is fewer.\nExcept as provided in subsection (b) of section four thousand two\nhundred thirty-one of this article and in paragraph five of subsection\n(a) of section three thousand two hundred twenty of this chapter, such\npolicy shall provide for payment of all benefits thereunder, to the\nperson insured or to some beneficiary or beneficiaries other than the\nemployer, and shall provide for the issuance of a certificate to the\npolicyholder for delivery to the person insured or to such beneficiary,\nas evidence of such insurance.\n (2) A policy issued to a labor union, which shall be deemed the\npolicyholder insuring, with or without evidence of individual\ninsurability satisfactory to the insurer, not less than twenty-five\nmembers of such union, and insuring, except as hereinafter provided all\nof the members of such union or all of any class or classes thereof\ndetermined by conditions pertaining to their employment or membership in\nthe union, or both, and who are actively engaged in their occupations,\nfor amounts of insurance on each person insured based upon some plan\nwhich will preclude individual selection. However, such a plan may\npermit a limited number of selections by members if the selections\noffered utilize a consistent pattern of grading the amounts of insurance\nfor individual group members so that the resulting pattern of coverage\nis reasonable. The premium on such policy may be paid by the union, by\nthe members, or by the union and its members jointly. If the premium is\npaid by the members or by the union and its members jointly such policy\nmust insure not less than fifty percent of such eligible members or, if\nless, fifty or more of such members. Except as provided in paragraph\nfive of subsection (a) of section three thousand two hundred twenty of\nthis chapter, such policy shall provide for the payment of benefits to\nthe person insured or to some beneficiary or beneficiaries, other than\nthe union or any of its officials, representatives or agents, and shall\nprovide for the issuance of a certificate to the union for delivery to\nthe person insured or to such beneficiary, as evidence of such\ninsurance. Any such policy may vary from the foregoing requirements, as\nfollows:\n (A) if the policy is cancellable at the option of the insurer at the\nend of any policy year and if the basis of premium rates may be changed\nby the insurer at the beginning of any policy year, all members of such\nlabor union may be insured thereunder;\n (B) if and when members of such union apply for and pay for additional\namounts of insurance, a smaller percentage of such members than fifty\npercent may, with evidence of individual insurability satisfactory to\nthe insurer, be insured thereunder for such additional amounts.\n (3) (A) A policy issued to a creditor or vendor, or to a trustee or\nagent designated by two or more creditors or vendors, which creditor,\nvendor, trustee, or agent shall be deemed the policyholder, except as\nhereinafter provided.\n (B) The policy shall insure all of the members, but may exclude any as\nto whom evidence of individual insurability is not satisfactory to the\ninsurer, of a group of debtors or vendees, defined as follows:\n (i) all of the borrowers, or borrowers and guarantors of borrowers, or\nintended borrowers (under a program for defraying the cost of attendance\nof a student at a college or university or at an elementary or secondary\nschool providing education required for minors, which program includes\nprovision for immediate periodic payments by the parent or guardian of\nsuch student and a loan commitment to such parent and guardian by a\nfinancial institution, or by or on behalf of a college or university or\nsuch an elementary or secondary school to defray the cost of attendance\nat such college or university or elementary or secondary school in\nexcess of the accumulated periodic payments by the parent or guardian)\nfrom one financial institution and its subsidiary or affiliated\ncompanies, or from two or more creditors or vendors so designating such\ntrustee, trustees or agent, or\n (ii) all of the purchasers of securities, merchandise or other\nproperty from one vendor, or from two or more vendors so designating\nsuch trustee or agent, or\n (iii) all of any class or classes of such debtors or purchasers\ndetermined by conditions pertaining to the type of indebtedness or\npurchase.\n (C) The policy may specify the ages to which the insurance provided\nshall be limited, provided however that if the insurance terminates at a\nparticular age, the age at which it terminates shall be prominently\ndisplayed on the application for insurance.\n (D) If the agreement provides for repayment in instalments, the\ninsurance may be continued for the duration of the debt over a period of\nnot more than thirty-five years from the date the debt is first\nincurred; otherwise the insurance may be continued for a period not in\nexcess of eighteen months except that such insurance may be continued\nfor an additional period not exceeding six months in the case of\ndefault, extension or recasting of the loan.\n (E) Notwithstanding anything in this paragraph to the contrary,\n (i) the insurance of borrowers, who incur indebtedness arising from\nthe granting of policy loans pursuant to policy provisions therefor,\nprovided under a policy issued to the insurance company granting the\npolicy loan, may be continued for the duration of the indebtedness,\n (ii) under a plan approved by the superintendent the insurance of\ndebtors with respect to an agreement which does not provide for\nrepayment in instalments may be continued for the duration of the\nindebtedness but not more than seven years from the date the\nindebtedness is incurred, and\n (iii) the insurance of persons who are tenants or shareholders of a\nmutual or other housing corporation (organized pursuant to the\nprovisions of the private housing finance law and regulated by such\nstatute as to rent, dividends and profits) under a policy issued with\nidentifiable charges or fixed amounts of premiums to such corporation or\nto a trustee or trustees or agent designated by one or more such\ncorporations may be continued for the term of the tenant's lease with\nsuch corporation or thirty-six months or whichever is the greater\nperiod, and the amount of insurance with respect to any person insured\nunder such policy may be a fixed amount not greater than the lesser of\nfifty-five thousand dollars or an amount equal to thirty-six times the\nmonthly instalments due under such lease.\n (F) The benefits of any policy authorized under this paragraph shall\nbe payable to the policyholder; but the amount of any benefit received\nby the policyholder thereunder not in excess of the actual indebtedness\nshall be applied by the policyholder to the discharge of any obligation\nof the person insured, or his personal representative, to the\npolicyholder, creditor or his assignee and the amount of any benefit\nreceived by the policyholder thereunder in excess of the actual\nindebtedness shall be payable to a beneficiary named by the debtor or,\nif none, then either to the estate of the debtor or under the provision\nof a facility of payment clause.\n (G) No such group shall be eligible for insurance hereunder unless the\nnew entrants to such group number at least twenty-five persons yearly.\n (H) The premium for the policy shall be paid by the policyholder,\neither from the creditor's or vendor's funds, or from charges collected\nfrom the insured debtors or purchasers, or from both. A policy on which\nall or part of the premium to be derived from the collection from the\ninsured debtors or purchasers of identifiable charges not required of\nuninsured debtors or purchasers may be issued only if the policy\nreserves to the insurer the right to require evidence of individual\ninsurability if less than seventy-five percent of the new entrants in\nany year become insured and provided that such policy shall not include,\nin the class or classes of debtors or purchasers eligible for insurance,\ndebtors or purchasers under obligations outstanding at its date of issue\nwithout evidence of individual insurability unless at least seventy-five\npercent of the then eligible debtors or purchasers elect to pay the\nrequired charges.\n (I) The policy may be issued to an assignee to whom such creditor or\nvendor has transferred all of its right, title and interest to the\nunpaid indebtedness, or to the unpaid purchase price, under all such\nagreements made by it.\n (J) The amount of insurance on any person insured under a policy shall\nnot at any time exceed:\n (i) in all cases except as hereinafter provided the lesser of\nfifty-five thousand dollars and the amount of unpaid indebtedness or the\namount of the purchase price unpaid by such person;\n (ii) in the case of a loan commitment pursuant to the hereinabove\nprogram for defraying the cost of attendance of a student at a college\nor university or at such an elementary or secondary school, the lesser\nof fifty-five thousand dollars and the total of the unpaid balance of\nthe scheduled periodic payments whether due or not due and the amount of\nany outstanding loan commitment pursuant to such a program; or\n (iii) in the case of a transaction secured by a real estate mortgage,\nthe lesser of the sum of two hundred twenty thousand dollars and the\namount of the indebtedness so secured.\n (iv) in the case of indebtedness arising from a credit card account\nwhere there is no specific charge for insurance, the lesser of the sum\nof one hundred thousand dollars or the amount of unpaid indebtedness.\n (K) (i) With respect to loans made by production credit associations\norganized pursuant to the federal Farm Credit Act of 1933, 12 U.S.C. §§\n1131c - 1138c, and with respect to loans made by a bank, trust company\nor industrial bank to a borrower engaged in the business of farming,\ncrop production or the raising, breeding, fattening or marketing of\nlivestock for the purposes of such business and other requirements of\nthe borrower, the amount of insurance may exceed the unpaid indebtedness\nand shall not be limited as to amount except that the insurance shall\nnot exceed the greater of the loan commitment or the outstanding balance\nof the loan at the inception of the period for which the borrower is\ninsured.\n (ii) With respect to loans made by Federal Land Banks established\npursuant to an Act of Congress of the United States entitled the\n"Federal Farm Loan Act", approved July seventeenth, nineteen hundred\nsixteen, as amended, the amount of insurance on any person insured under\nthe policy shall not at any time exceed the amount of the unpaid\nindebtedness at the inception of the period for which premiums are paid,\nbut shall not otherwise be limited as to amount.\n (L) The superintendent shall prescribe from time to time regulations\ndetermining the procedures, terms and conditions applicable to a policy\nissued pursuant to this paragraph to the trustee or agent designated by\ntwo or more creditors or vendors.\n (M) Each insurer shall file with the superintendent its forms of\npolicies, certificate statements and applications pertaining to credit\ninsurance together with its premium rates for such insurance and the\nsame shall be subject to his approval. The superintendent shall not\napprove any such forms if the premium charged is unreasonable in\nrelation to the benefits provided.\n (N) For the purposes of this paragraph: (i) "creditor" includes a\nlessor of real or personal property, (ii) "borrower" includes a lessee\nof real or personal property, and (iii) "indebtedness" includes rentals\npayable under the lease of real or personal property.\n (4) A policy issued to a trustee or trustees of a fund established or\nparticipated in by two or more employers or by one or more labor unions,\nor by one or more employers and one or more labor unions, which trustee\nor trustees shall be deemed the policyholder, to insure employees of the\nemployers or members of the unions for the benefit of persons other than\nthe employers or the unions, subject to the following requirements:\n (A) The persons eligible for insurance shall be all of the employees\nof the employers or all of the members of the unions, or all of any\nclass or classes thereof determined by conditions pertaining to their\nemployment, or to membership in the unions, or to both.\n (B) The premium for the policy shall be paid by the trustees either\nwholly from funds contributed by the employer or employers of the\ninsured persons or by the union or unions, or by both, or from funds\ncontributed by the insured persons, or jointly from such funds and funds\ncontributed by the insured persons specifically for their insurance. A\npolicy on which no part of the premium is to be derived from funds\ncontributed by the insured persons specifically for their insurance must\ninsure all eligible persons, excluding any as to whom evidence of\nindividual insurability is not satisfactory to the insurer.\n (C) The policy shall insure at least fifty persons at date of issue.\n (D) The amounts of insurance under the policy shall be based upon some\nplan precluding individual selection either by the insured persons or by\nthe policyholder, employers, or unions. However, such a plan may permit\na limited number of selections by employees or members if the selections\noffered utilize a consistent pattern of grading the amounts of insurance\nfor individual group members so that the resulting pattern of coverage\nis reasonable.\n (E) With respect to a policy issued to a trustee or trustees of a fund\nestablished by one or more labor unions, or by one or more employers and\none or more labor unions the proposed insured must submit, and the\ninsurer must obtain, a written certification that a reasonable number of\ncomparative bids have been obtained from different insurers and that\nsuch bids have been considered by the trustees before making a decision\nconcerning which bid to accept. Such decision must be made at a\ntrustees' meeting held on a date certain, and a copy of the minutes of\nsuch meeting must be attached to such certification.\n (5) A policy issued to a trustee or trustees of a fund established or\nparticipated in by the employer members of a trade association, which\ntrustee or trustees shall be deemed the policyholder, to insure\nemployees of such employers for the benefit of persons other than the\nassociation or the employers, subject to the following requirements:\n (A) The policy may be issued only if:\n (i) the association has been in existence for at least two years and\nwas formed for purposes principally other than obtaining insurance, and\n (ii) the participating employers, meaning such employer members whose\nemployees are to be insured, constitute at date of issue at least fifty\npercent of the total employers eligible to participate, unless the total\nnumber of persons covered at date of issue exceeds six hundred, in which\nevent such participating employers must constitute at least twenty-five\npercent of such total employers, in either case omitting from\nconsideration any employer whose employees are already covered for group\nlife insurance;\n (B) The persons eligible for insurance under the policy shall be all\nof the employees of the participating employers, or all of any class or\nclasses thereof determined by conditions pertaining to their employment.\n (C) The premium for the policy shall be paid by the trustee or\ntrustees either wholly from funds contributed by the employers or by the\nemployees or funds contributed jointly by the employers and the\nemployees. A policy on which no part of the premium so payable is to be\nderived from funds contributed by the insured employees must insure all\neligible employees, excluding any as to whom evidence of individual\ninsurability is not satisfactory to the insurer;\n (D) The policy must cover at least fifty employees at date of issue;\n (E) The amounts of insurance under the policy must be based upon some\nplan precluding individual selection either by the employees or by the\npolicyholder or the employer. However, such a plan may permit a limited\nnumber of selections by employees if the selections offered utilize a\nconsistent pattern of grading the amount of insurance for individual\ngroup members so that the resulting pattern of coverage is reasonable.\n (6) A policy issued to a duly organized association of civil service\nemployees which shall include in its membership not less than five\nthousand civil service employees having a common employer, or to a duly\norganized association of teachers having a membership of not less than\nfive thousand, which association, in either event, shall be deemed the\npolicyholder, and which shall have been formed and is maintained for\npurposes other than to effect group life insurance on its members. Such\npolicy shall insure only members of such association, with or without\nevidence of individual insurability satisfactory to the insurer, based\nupon a plan which will preclude individual selection. However, such a\nplan may permit a limited number of selections by members if the\nselections offered utilize a consistent pattern of grading the amounts\nof insurance for individual group members so that the resulting pattern\nof coverage is reasonable. The premium on such policy may be paid by the\nassociation or by the association and the insured members jointly or by\nthe insured members alone. Every member of such association in good\nstanding shall have opportunity to apply for such insurance and not less\nthan sixty percent of the eligible members in good standing may be so\ninsured. Such policy shall provide for the payment of benefits, except\npolicy dividends, to the person insured or to some beneficiary or\nbeneficiaries, other than the association or any of its officers or\ndirectors, as such, and shall also provide for the issuance of a\ncertificate to the association for delivery to the person insured or to\nsuch beneficiary, as evidence of such insurance.\n (7) A policy insuring the members of one or more troops or units of\nthe state troopers or state police of any state, issued to the\ncommanding officer of the state troopers or state police, who shall be\ndeemed the policyholder, the premium on which is to be paid by the\nmembers insured; or a policy covering the members of one or more duly\nincorporated police officers' benevolent associations or of one or more\nassociations or organizations of uniformed firefighters or volunteer\nfirefighters or volunteer ambulance workers which association or\norganization shall have been in existence for at least two years prior\nto the issuance of such policy and which shall have twenty-five members\nat the time of the issuance of such policy, which shall be issued to\nsuch association or to a trustee or trustees of a fund established, or\nparticipated in, by one or more of such associations or organizations as\nthe policyholder. If the opportunity to take such insurance is offered\nto all eligible members of a unit of such state troopers or state\npolice, or to all eligible members of such incorporated police officers'\nbenevolent association or of an association or organization of uniformed\nfirefighters, volunteer firefighters, then not less than fifty percent\nof such members or, if less, fifty or more of such members may be so\ninsured. If the insurance is limited to those eligible members who are\nemployed as state troopers, police officers, firefighters or volunteer\nambulance workers, then not less than sixty percent or five hundred of\nsuch members, whichever is less, may be so insured. Such policy shall\nprovide for the payment of benefits, except policy dividends, to the\nperson insured or to some beneficiary or beneficiaries, other than such\ncommanding officer or such association or any of its officials, as such,\nand shall also provide for the issuance of a certificate to the\npolicyholder for delivery to the person insured or to such beneficiary,\nas evidence of such insurance. For the purposes of this paragraph any\nassociation currently holding premium dividends as a result of policies\nissued under this section shall be permitted to maintain said dividends\nfor the general purposes of the entire membership. For the purposes of\nthis paragraph the term "eligible members of an association of volunteer\nfirefighters or volunteer ambulance workers" means members who perform\nservices in fire-fighting duties or members of a volunteer exempt fire\nbenevolent association who are entitled to benefits from the\nexpenditures of foreign fire insurance tax moneys, including, inactive\nexempt volunteer firefighters as defined by section two hundred of the\ngeneral municipal law or in ambulance-related duties, respectively. The\namounts of insurance may be based upon a plan which permits a limited\nnumber of selections by the members if the selections offered utilize a\nconsistent pattern of grading the amounts of insurance for individual\ngroup members so that the resulting pattern of coverage is reasonable.\n (8) (A) A policy issued to a municipal corporation or a public housing\nauthority, which corporation or authority shall be deemed the\npolicyholder, insuring, with or without evidence of individual\ninsurability satisfactory to the insurer, not less than twenty-five\nemployees of such corporation or authority, except that in each of the\nvillages of Croton-on-Hudson and Lloyd Harbor not less than ten such\nemployees, and insuring all of such employees or all of any class or\nclasses thereof determined by conditions pertaining to the employment,\nfor amounts of insurance on each person insured based upon some plan\nwhich will preclude individual selection. However, such a plan may\npermit a limited number of selections by employees if the selections\noffered utilize a consistent pattern of grading the amounts of insurance\nfor individual group members so that the resulting pattern of coverage\nis reasonable.\n (B) The premium for the policy may be paid either by the policyholder\nor by the insured employees, or both, in the manner provided in section\nninety-three of the general municipal law. If a part of the premium is\nto be derived from funds contributed by insured employees, the policy\nmust insure not less than seventy-five percent of all eligible\nemployees. Such policy shall provide for the payment of benefits to the\nperson insured or to some beneficiary or beneficiaries other than the\nmunicipal corporation or the public housing authority, and shall also\nprovide for the issuance of a certificate to the policyholder for\ndelivery to the person insured or to such beneficiary, as evidence of\nsuch insurance. A policy on which no part of the premium is to be\nderived from funds contributed by the insured employees specifically for\ntheir insurance must insure all eligible employees, or all except any as\nto whom evidence of individual insurability is not satisfactory to the\ninsurer.\n (C) Subject to the constitution and general laws of this state, every\nmunicipal corporation or public housing authority is empowered to\ncontract by its fiscal or disbursing officer with an authorized life\ninsurance company for group life insurance on the lives of its\nemployees.\n (9) A policy issued to the state covering, with or without evidence of\nindividual insurability satisfactory to the insurer, persons who are\nmanagerial or confidential employees, or retired managerial or\nconfidential employees, of governments or public employers for the\npurposes of article fourteen of the civil service law. The state shall\nbe deemed to be the policyholder. With respect to its employees, the\nstate and each other participating government or public employer shall\nbe deemed to be the employer. The premiums or subscription charges may\nbe derived from funds contributed entirely by insured employees and\nretired employees or by insured employees and retired employees and the\nemployer jointly or entirely by the employer. If the premiums or\nsubscription charges are derived from funds contributed wholly by the\nemployer, all eligible employees are to be covered. If all or part of\nthe premiums or subscription charges are to be derived from funds\ncontributed by insured employees and if the opportunity to take such\ninsurance is offered to all eligible employees of an employer, then such\npolicy must cover not less than forty percent of such employees, the\ncalculation being with respect to each employer individually. The\namounts of insurance may be based upon a plan which permits a limited\nnumber of selections by the employees if the selections offered utilize\na consistent pattern of grading the amounts of insurance for individual\ngroup members so that the resulting pattern of coverage is reasonable.\n (10) A policy issued to an association, or to a trustee or trustees of\na fund established, created or maintained for the benefit of members of\none or more associations, all of whose eligible members have the same\nprofession, trade or occupation, which association or associations have\nbeen organized and maintained in good faith for purposes principally\nother than that of obtaining insurance and have been in active existence\nfor at least two years. The policy shall insure members, or employees of\nmembers, of such association or associations, and except as provided in\nparagraph five of subsection (a) of section three thousand two hundred\ntwenty of this chapter, such policy shall provide for the payment of\nbenefits to the person insured or some beneficiary or beneficiaries\nother than employers and the association or associations, or any\nofficials, representatives, trustees or agents thereof and shall provide\nfor the issuance of a certificate to the persons insured or such\nbeneficiary as evidence of such insurance. The members or employees\neligible for the insurance under the policy shall be all the members who\nhave not attained any limiting age specified in the policy, or all such\nmembers and their employees, or all of any class or classes thereof\ndetermined by conditions pertaining to their employment or to\nassociation membership or both. The premium for the policy shall be paid\nby the association or trustee or trustees either from funds contributed\nby the association or by the insured individuals, or from funds\ncontributed jointly by the association and insured individuals\nspecifically for their insurance. A policy on which all or part of the\npremium is to be derived from funds contributed by the insured\nindividuals specifically for their insurance must insure at least fifty\npercent of the then eligible individuals or a minimum of two hundred\nindividuals, whichever is less, excluding any as to whom evidence of\nindividual insurability is not satisfactory to the insurer. A policy on\nwhich no part of the premium is to be derived from funds contributed by\nthe insured individuals specifically for their insurance must insure all\neligible individuals, excluding any as to whom evidence of individual\ninsurability is not satisfactory to the insurer. The policy must insure\nat least one hundred individuals at date of issue. The amounts of\ninsurance on employees or members insured under the policy shall be\nbased upon some plan precluding individual selection. However, such a\nplan may permit a limited number of selections by employees or members\nif the selections offered utilize a consistent pattern of grading the\namounts of insurance for individual group members so that the resulting\npattern of coverage is reasonable. If a policy dividend is declared or a\nreduction in rate is made under such a policy, the excess, if any, of\nthe aggregate dividends or rate reductions under the policy over the\naggregate expenditure for insurance under such policy made from\nassociation or employer funds, including expenditures made in connection\nwith administration of such policy, shall be applied by the policyholder\nfor the sole benefit of the insured individuals.\n (11) A policy, covering persons employed pursuant to 32 U.S.C. § 709,\nmembers of the national guard on full-time training duty under\nprovisions of such title 32, or on active duty or active duty for\ntraining under provisions of title 10 of the United States Code, under\nthe full-time manning program, issued to the adjutant general, who shall\nbe deemed the policyholder, or to a trustee or trustees of a fund\nestablished, created, or maintained for the benefit of such individuals\ninsured, which trustee or trustees shall be deemed the policyholder, the\npremium of which is to be paid by the individuals insured either\ndirectly or by deduction from wages or salary. The policy must insure at\nleast fifty percent or four hundred of the individuals eligible for such\ninsurance, whichever is less. Such policy shall provide for the payment\nof benefits to the individual insured or to some beneficiary or\nbeneficiaries other than to the aforesaid trustee or trustees or the\nadjutant general. The policy shall also provide for the issuance of a\ncertificate to the policyholder for delivery to the individual insured\nor to such beneficiary, as evidence of such insurance. The amounts of\ninsurance may be based upon a plan which permits a limited number of\nselections by the members provided the selections offered utilize a\nconsistent pattern of grading the amounts of insurance for individual\ngroup members so that the resulting pattern of coverage is reasonable.\n (12) A policy issued to an association, or the trustee or trustees of\na trust established, or participated in, by one or more associations, to\ninsure association members subject to the following:\n (A) Each association shall have (i) A minimum of two hundred insured\nmembers at the policy's date of issue;\n (ii) Been organized and maintained in good faith for purposes\nprincipally other than that of obtaining insurance;\n (iii) Been in active existence for at least two years; and\n (iv) A constitution and by-laws which provide that:\n (I) The association holds regular meetings not less than annually to\nfurther purposes of the association;\n (II) The association collects dues or solicits contributions from\nmembers; and\n (III) The members have voting privileges and representation on the\ngoverning board and committees.\n (B) The premium for the policy shall be paid by the association or\ntrustees either wholly from funds contributed by the association or by\nthe insured individuals, or from funds contributed jointly by the\nassociation and insured individuals. A policy on which no part of the\npremium is to be derived from funds contributed by the insured\nindividuals specifically for their insurance must insure all eligible\nindividuals excluding any as to whom evidence of individual insurability\nis not satisfactory to the insurer.\n (C) The amounts of insurance under the policy shall be based upon some\nplan precluding individual selection either by the insured persons or by\nan association. However, such a plan may permit a number of selections\nby the association, if the selections offered utilize a consistent\npattern of grading the amounts of insurance so that the resulting\npattern of coverage is reasonable. Furthermore, such plan may permit a\nlimited number of selections by members if the selections offered\nutilize a consistent pattern of grading the amounts of insurance for\nindividual group members so that the resulting pattern of coverage is\nreasonable.\n (D) Except as provided in paragraph five of subsection (a) of section\nthree thousand two hundred twenty of this chapter, such policy shall\nprovide for the payment of benefits to the person insured or to some\nbeneficiary or beneficiaries, other than the association or any\nofficials, representatives, trustees or agents thereof and shall provide\nfor the issuance of a certificate to the persons insured or such\nbeneficiary, as evidence of such insurance.\n (E) The premiums charged must be reasonable in relation to the\nbenefits provided.\n (13) A policy issued to any organization, or the trustee or trustees\nof a trust established, or participated in, by one or more of such\norganizations to insure certain persons subject to the following:\n (A) The organization must be:\n (i) A bank, retailer or other issuer of a credit card, charge card or\npayment card which can be used to buy goods or services, and the policy\nmust insure holders of that card;\n (ii) A bank, savings and loan association, credit union, mutual fund,\nmoney market fund, stockbroker or other similar financial institution\nregulated by state or federal law, and the policy must insure the\ndepositors, account holders or members of that institution.\n (B) Except for a credit union where the premium shall be paid entirely\nfrom funds contributed by the credit union, the organization or\norganizations shall have a minimum of two hundred insured persons at the\npolicy's date of issue.\n (C) The premium for the policy shall be paid by the organization or\ntrustees either wholly from funds contributed by the organization or by\nthe insured individuals, or from funds contributed jointly by the\norganization and insured individuals. A policy on which no part of the\npremium is to be derived from funds contributed by the insured\nindividuals specifically for their insurance must cover all eligible\nindividuals excluding any as to whom evidence of individual insurability\nis not satisfactory to the insurer.\n (D) The amounts of insurance under the policy shall be based upon some\nplan precluding individual selection either by the insured persons or by\nthe organization. However, such plan may permit a number of selections\nby the organization if the selections offered utilize a consistent\npattern of grading the amounts of insurance so that the resulting\npattern of coverage is reasonable. Furthermore, such a plan may permit a\nlimited number of selections by members if the selections offered\nutilize a consistent pattern of grading the amounts of insurance for\nindividual group members so that the resulting pattern of coverage is\nreasonable.\n (E) Except as provided in paragraph five of subsection (a) of section\nthree thousand two hundred twenty of this chapter, such policy shall\nprovide for the payment of benefits to the persons insured or to some\nbeneficiary or beneficiaries other than the organization, or any\nofficial, representatives, trustees or agents thereof, and shall provide\nfor the issuance of a certificate to the persons insured or such\nbeneficiary, as evidence of such insurance.\n (F) The premiums charged must be reasonable in relation to the\nbenefits provided.\n (14) A policy issued to insure any other group approved by the\nsuperintendent upon a finding that:\n (A) There is a common enterprise or economic or social affinity or\nrelationship;\n (B) The premiums charged are reasonable in relation to the benefits\nprovided; and\n (C) The issuance of the policy would result in economies of\nacquisition or administration, would be actuarially sound, and would not\nbe contrary to the best interest of the public. The superintendent shall\npromulgate regulations setting forth any such groups that have been\naccepted as qualifying pursuant to this paragraph.\n (c) (1) No domestic, foreign or alien life insurance company shall be\npermitted to do business in this state if it hereafter issues, within or\nwithout this state, any policy of group life insurance which on its\nissuance does not appear to be self-supporting on reasonable assumptions\nas to interest, mortality and expense.\n (2) Anything in this chapter to the contrary notwithstanding, any\ngroup life insurance policy issued or delivered in this state may\nprovide for readjustment of the rate of premium based on the experience\nthereunder, at the end of the first year or of any subsequent year of\ninsurance thereunder, and such readjustment may be made retroactive only\nfor such policy year. Any such rate readjustment shall be computed on a\nbasis which is equitable to all group life insurance policies.\n (d) In the event a group life insurance policy hereafter issued for\ndelivery in this state permits a certificate holder to convert to\nanother type of life insurance within a specified time after the\nhappening of an event, such certificate holder shall be notified of such\nprivilege and its duration within fifteen days before or after the\nhappening of the event, provided that if such notice be given more than\nfifteen days, but less than ninety days after the happening of such\nevent, the time allowed for the exercise of such privilege of conversion\nshall be extended for forty-five days after the giving of such notice.\nIf such notice be not given within ninety days after the happening of\nthe event, the time allowed for the exercise of such conversion\nprivilege shall expire at the end of such ninety days. Written notice by\nthe policyholder given to the certificate holder or mailed to the\ncertificate holder at his last known address, or written notice by the\ninsurer mailed to the certificate holder at the last address furnished\nto the insurer by the policyholder, shall be deemed full compliance with\nthe provisions of this subsection for the giving of notice.\n (e) Each domestic insurer and each foreign or alien insurer doing\nbusiness in this state shall file with the superintendent its schedule\nof rates of commissions, compensation and other fees or allowances to\nagents and brokers pertaining to the solicitation or sale of group life\ninsurance and of fees or allowances, exclusive of amounts payable to\npersons who are in the regular employ of the insurer other than as\nagent, to any individuals, firms or corporations pertaining to the\nservice or administration of group life insurance, whether transacted\nwithin or without this state. An insurer may revise such schedules from\ntime to time, and shall file such revised schedules with the\nsuperintendent. No insurer shall pay to an agent, agents, broker or\nbrokers or any combination of licensees for the solicitation or sale of\na policy of group life insurance or for any other purpose related to\nsuch group insurance any commission, compensation or other fees or\nallowances in excess of that determined on the basis of the schedules of\nsuch insurer as then on file with the superintendent; nor shall such\ninsurer pay for services pertaining to the service or administration\nthereof to any individual, firm or corporation any fees, commissions or\nallowances in excess of that determined on the basis of the schedules of\nsuch insurer as then on file with the superintendent or for such\nservices except such as are rendered in behalf of such insurer,\nprovided, however, nothing contained herein shall apply to or affect the\ncomputation of dividends or experience rating credits.\n (f) Any policy of group life insurance may include provisions for the\npayment by the insurer of life insurance benefits upon the death of the\nspouse of the insured employee or member or his or her child dependent\nupon him or her for support and maintenance or any other person\ndependent upon the insured employee or member, provided that insurance\nupon the life of the spouse or other person shall not exceed the amount\nof insurance for which the employee or member is eligible, nor shall the\ninsurance upon the life of each dependent child so insured exceed\ntwenty-five thousand dollars. A policy of insurance issued in accordance\nwith paragraph three of subsection (b) of this section, while it may\nprovide coverage for a spouse of the insured employee or member, it\nshall not, however, provide coverage for a dependent child of the\ninsured employee or member. An insurer providing group life insurance\nfor a spouse or dependent children shall require evidence of\ninsurability sufficient to protect against substantial adverse\nselection.\n (g) An insurer authorized or licensed to do business in this state may\nsolicit or make available credit life insurance coverage in this state\nas provided for in paragraph three of subsection (b) of this section\nunder a policy of group life insurance only if the policy is delivered\nto policyholders described in and conforming to the definition in\nparagraph three of subsection (b) of this section, and with respect to\nall credit transactions entered into in this state, the policy fully\ncomplies with the requirements of paragraph twelve of subsection (a) of\nsection three thousand two hundred twenty of this chapter.\n (h)(1) Any dividend hereafter apportioned on any participating group\ninsurance policy, or any rate reduction hereafter made or continued on\nany non-participating group policy for the first or any subsequent year\nof insurance under any such policy heretofore or hereafter issued under\nparagraph twelve, thirteen or fourteen of subsection (b) of this\nsection, may be applied to reduce the policyholder's part of the cost of\nsuch policy, except that the excess, if any, of the insured's aggregate\ncontribution under the policy over the net cost (gross premium less\ndividends or rate reductions) of the insurance shall be applied at the\ndiscretion of the insurer either as a cash payment to the insured or to\nreduce the insured's premium, unless the insured assigns the dividend or\nrate reduction to the policyholder. If a dividend or rate reduction is\npayable upon termination of the policy the insurer shall either make\npayment to the insured or to the policyholder upon receipt of a\ncertification from the policyholder that the dividend or rate reduction\nwill be distributed by the policyholder to the insureds or applied to\nreduce the insured's premium.\n (2) The provisions of paragraph one of this subsection shall apply to\nNew York residents insured under a policy issued in any other\njurisdiction to a group which is not of the type described in paragraphs\none through eleven of subsection (b) of this section.\n (i) (1) The provisions of subsections (d), (f) and (h) of this section\nshall not apply to policies issued under the authority of subsection (d)\nof section three thousand two hundred five of this chapter, provided\nsuch policies are issued in compliance with the requirements of\nsubsection (d) and subsection (e) of section three thousand two hundred\nfive of this chapter.\n (2) Any life insurance company authorized to do business in this state\nmay deliver in this state policies of group insurance issued to an\nemployer or to the trustee of a fund established by one or more\nemployers, or one or more employers and one or more labor unions without\ncomplying with the provisions of paragraphs one and four of subsection\n(b) of this section where group insurance is issued under the authority\nof subsection (d) or subparagraph (B) of paragraph (1) of subsection (a)\nof section three thousand two hundred five of this chapter, provided\nthat, prior to or at the commencement of coverage on any person under a\npolicy issued under the authority of such subparagraph:\n (A) the employer providing such insurance coverage or causing such\ncoverage to be issued notifies the prospective insured in writing: (i)\nof the intent to insure the employee's life, specifying in such notice\nthe maximum face amount for which the employee could be insured at the\ntime the contract is issued; and (ii) that the employer or policyholder\nwill be a beneficiary of any proceeds payable upon the death of the\nemployee; and\n (B) the prospective insured employee consents in writing to such\ncoverage.\n