§431:10A-205  Payment of benefits.  (a) The benefits payable under any policy or contract of group or blanketdisability insurance shall be payable to the insured member of the group or tothe beneficiary designated by the insured member, other than the policyholder,subject to provisions of the policy in the event the claimant is insane orotherwise incompetent, or in the event there is no designated beneficiary as toall or any part of any sum payable at the death of the individual insured;provided, that if the entire cost of the insurance has been borne by theemployer such benefits may be made payable to the employer.

(b)  Any group or blanket disability policy mayprovide that all or any portion of any indemnities provided by the policy onaccount of hospital, nursing, medical, or surgical services may, at theinsurer's option, be paid directly to the hospital or person rendering suchservices, but the policy may not require that the service be rendered by aparticular hospital or person.  Payment so made shall discharge the insurer'sobligation with respect to the amount so paid.

(c)  No group disability income policy shallcontain any provision integrating the benefits of the policy with socialsecurity benefits whereby the amount of the disability benefit actually beingpaid to the disabled person under the terms and conditions of the policy willbe diminished when there occurs an increase in social security benefits eitherby operation of amendments to the Social Security Act or by cost of living adjustmentswhich become effective after the first day the disabled person becomes entitledto benefits. [L 1987, c 347, pt of §2]