§431:10D-205  Trustee groups.  The livesof a group of individuals may be insured under a policy issued to the trusteesof a fund established by two or more employers or by one or more labor unions,or by one or more employers and one or more labor unions which trustees shallbe deemed the policyholder, to insure employees of the employers or members ofthe 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 allof the employees of the employers or all of the members of the unions, or allof any class or classes thereof.  The policy may provide that the termemployees 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 the affiliated corporations, proprietorships orpartnerships are under common control;

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

(C)  Retired employees; and

(D)  The trustees or their employees, or both,if their duties are principally connected with the trusteeship.

No director of a corporate employer shall beeligible for insurance under the policy unless the person is otherwise eligibleas a bona fide employee of the corporation by performing services other thanthe usual duties of a director.  No individual proprietor or partner shall beeligible for insurance under the policy unless the individual proprietor orpartner is actively engaged in and devotes a substantial part of the individualproprietor's or partner's time to the conduct of the business of theproprietorship or partnership.

(2)  The premium for the policy shall be paid whollyfrom funds contributed by the employer or employers of the insured persons, orby the union or unions, or by both, or, except in the case of a policy issuedto the trustees of a fund established wholly by two or more employers, partlyfrom those funds and partly from funds contributed by the insured persons.  Nopolicy may be issued to the trustees of a fund established wholly by two ormore employers on which any part of the premium is to be derived from fundscontributed by the insured persons specifically for their insurance.  A policyon which part of the premium is to be derived from funds contributed by theinsured persons specifically for their insurance may be placed in force only ifat least seventy-five per cent of the then eligible persons, excluding any asto whom evidence of insurability is not satisfactory to the insurer, elect tomake the required contributions.  Except as provided in paragraph (3), a policyon which no part of the premium is to be derived from funds contributed by theinsured persons specifically for their insurance must insure all eligiblepersons, except those who reject that 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.

(4)  The policy must cover at date of issue at leasttwenty-five persons and not less than an average of four persons per employerunit; and if the fund is established by the members of an association ofemployers the policy may be issued only if:

(A)  Either:

(i)  The participating employers constitute atdate of issue at least thirty-three and one-third per cent of those employermembers whose employees are not already covered for group life insurance, or

(ii)  The total number of persons covered at dateof issue exceeds two hundred; and

(B)  The policy shall not require that, if aparticipating employer discontinues membership in the association, theinsurance of the employer's employees shall cease solely by reason of thediscontinuance.

(5)  The amounts of insurance under the policy must bebased upon some plan precluding individual selection either by the insuredpersons or by the policyholder, employers, or unions. [L 1987, c 347, pt of §2;am L 1990, c 38, §1]