§431:10D-202  Employee groups.  (a)  Thelives of a group of individuals may be insured under a policy issued to anemployer, or to the trustees of a fund established by an employer, whichemployer or trustee is deemed the policyholder, insuring employees of theemployer for the benefit of persons other than the employer; provided that ifthe entire cost of the insurance has been borne by the employer and theemployer uses the benefits for the purpose of purchasing employer securitiesdistributed to employees from a pension, profit sharing, stock bonus, oremployee stock ownership plan which has been qualified under section 401 of theInternal Revenue Code, benefits may be made payable to the employer.

(b)  Issuance of group life insurance policiesshall be subject to the following requirements:

(1)  The employees eligible for insurance under thepolicy shall be all of the employees of the employer, or all of any class orclasses thereof determined by conditions pertaining to their employment.  Thepolicy may provide that the term employees shall include:

(A)  The employees of one or more subsidiarycorporations, and the employees, individual proprietors, and partners of one ormore affiliated corporations, proprietorships, or partnerships, if the businessof the employer and of such affiliated corporations, proprietorships, orpartnerships is under common control;

(B)  The individual proprietor or partners, ifthe employer is an individual proprietor or a partnership; and

(C)  Retired employees.

No director of a corporate employer shall beeligible for insurance under the policy unless such person is otherwiseeligible as a bona fide employee of the corporation by performing servicesother than the usual duties of a director.  No individual proprietor or partnershall be eligible for insurance under the policy unless the individual isactively engaged in and devotes a substantial part of the individual's time tothe conduct of the business of the proprietorship or partnership;

(2)  The premium for the policy may be paid entirelyby the employer, or by funds paid entirely by the insured employees, or byfunds contributed by both the employer and the insured employees.  Except asprovided in paragraph (3), a policy on which no part of the premium is to be derivedfrom funds contributed by the insured employees shall insure all eligibleemployees, except those who reject such coverage in writing;

(3)  An insurer may exclude or limit the coverage onany person as to whom evidence of individual insurability is not satisfactoryto the insurer; and

(4)  The amounts of insurance under the policy shallbe based upon some plan precluding individual selection either by the employeror trustees. [L 1987, c 347, pt of §2; am L 1988, c 330, §3; gen ch 1992; am L2004, c 122, §47; am L 2008, c 155, §2]