20-1255. Trustee groups
The lives of a group of individuals may be insured under a policy issued to the
trustees of a fund established in this state by two or more employers in the same
industry, if a majority of the employees to be insured of each employer are located
within this state, or to the trustees of a fund established by one or more labor unions,
or by one or more employers in the same industry and one or more labor unions, or by one
or more employers and one or more labor unions whose members are in the same or related
occupations or trades, which 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:
1. 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. The policy may provide that the term "employees" shall include retired
employees, and the individual proprietor or partners if an employer is an individual
proprietor or a partnership. No director of a corporate employer shall be eligible for
insurance under the policy unless such person is otherwise eligible as a bona fide
employee of the corporation by performing services other than the usual duties of a
director. No individual proprietor or partner shall be eligible for insurance under the
policy unless he is actively engaged in and devotes a substantial part of his time to the
conduct of the business of the proprietor or partnership. The policy may provide that
the term "employees" shall include the trustees or their employees, or both, if their
duties are principally connected with such trusteeship.
2. The premium for the policy shall be paid by the trustees, either from funds
contributed by the employer or employers of the insured persons or by the union or
unions, or from the insured persons specifically for their insurance, or from both, or,
except in the case of a policy issued to the trustees of a fund established wholly by two
or more employers, from such funds, or from funds contributed by the insured persons, or
from both. A policy on which no part of the premium is to be derived from funds
contributed by insured persons specifically for their insurance shall insure all eligible
persons, or all except any as to whom evidence of individual insurability is not
satisfactory to the insurer.
3. The policy shall cover at date of issue at least one hundred persons and not
less than an average of five persons, other than individual proprietors or partners, per
employer unit. If the fund is established by the members of an association of employers
the policy may be issued only if either the participating employers constitute at date of
issue at least sixty per cent of those employer members whose employees are not already
covered for group life insurance, or the total number of persons covered at date of issue
exceeds six hundred, and if the policy does not require that, if a participating employer
discontinues membership in the association, the insurance of his employees shall cease
solely by reason of such discontinuance.
4. 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.
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