Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-434.Same; policy provisions required.No policy of group life insurance shall be delivered in this stateunless it contains in substance the following provisions, or provisionswhich in the opinion of the commissioner are more favorable to the personsinsured, or at least as favorable to the persons insured and more favorableto the policyholder: Provided, however, (a) That provisions 6 to 10inclusive, shall not apply to policies issued to a creditor to insuredebtors of such creditor; (b) that the standard provisions required forindividual life insurance policies shall not apply to group life insurancepolicies; and (c) that if the group life insurance policy is on a plan ofinsurance other than the term plan, it shall contain a nonforfeitureprovision or provisions, which in the opinion of the commissioner is or areequitable to the insured persons and to the policyholder, but nothingherein shall be construed to require that group life insurance policiescontain the same nonforfeiture provisions as are required for individuallife insurance policies:
(1) A provision that the policyholder is entitled to a grace period ofthirty-one (31) days for the payment of any premium due except the first,during which grace period the death benefit coverage shall continue inforce, unless the policyholder shall have given the insurer written noticeof discontinuance in advance of the date of discontinuance and inaccordance with the terms of the policy. The policy may provide that thepolicyholder shall be liable to the insurer for the payment of a pro ratapremium for the time the policy was in force during such grace period.
(2) A provision that the validity of the policy shall not be contested,except for nonpayment of premiums, after it has been in force for two (2)years from its date of issue; and that no statement made by any personinsured under the policy relating to his insurability shall be used incontesting the validity of the insurance with respect to which suchstatement was made after such insurance has been in force prior to thecontest for a period of two (2) years during such person's lifetime norunless it is contained in a written instrument signed by him.
(3) A provision that a copy of the application, if any, of thepolicyholder shall be attached to the policy when issued, that allstatements made by the policyholder or by the persons insured shall bedeemed representations and not warranties, and that no statement made byany person insured shall be used in any contest unless a copy of theinstrument containing the statement is or has been furnished to such personor to his beneficiary.
(4) A provision setting forth the conditions, if any, under which theinsurer reserves the right to require a person eligible for insurance tofurnish evidence of individual insurability satisfactory to the insurer asa condition to part or all of his coverage.
(5) A provision specifying an equitable adjustment of premiums or ofbenefits or of both to be made in the event the age of a person insured hasbeen misstated, such provision to contain a clear statement of the methodof adjustment to be used.
(6) A provision that any sum becoming due by reason of the death of theperson insured shall be payable to the beneficiary designated by the personinsured, subject to the provisions of the policy in the event there is nodesignated beneficiary as to all or any part of such sum living at thedeath of the person insured, and subject to any right reserved by theinsurer in the policy and set forth in the certificate to pay at its optiona part of such sum not exceeding two hundred fifty dollars ($250) to anyperson appearing to the insurer to be equitably entitled thereto by reasonof having incurred funeral or other expenses incident to the last illnessor death of the person insured.
(7) A provision that the insurer will issue to the policyholder fordelivery to each person insured an individual certificate setting forth astatement as to the insurance protection to which he is entitled, to whomthe insurance benefits are payable, and the rights and conditions set forthin (8), (9) and (10) following.
(8) A provision that if the insurance, or any portion of it, on a personcovered under the policy ceases because of termination of employment or ofmembership in the class or classes eligible for coverage under the policy,such person shall be entitled to have issued to him by the insurer, withoutevidence of insurability, an individual policy of life insurance withoutdisability or other supplementary benefits: Provided, Application forthe individual policy shall be made, and the first premium paid to theinsurer, within thirty-one (31) days after such termination: And providedfurther, That, (a) the individual policy shall, at the option of suchperson, be on any one of the forms except term insurance, then customarilyissued by the insurer at the age and for the amount applied for; (b) theindividual policy shall be in an amount not in excess of the amount of lifeinsurance which ceases because of such termination less, in the case of aperson whose membership in the class or classes eligible for coverageterminates but who continues in employment in another class, the amount ofany life insurance for which such person is or becomes eligible under anyother group policy within thirty-one (31) days after such termination:Provided, That any amount of insurance which shall have matured on orbefore the date of such termination as an endowment payable to the personinsured, whether in one sum or in installments or in the form of anannuity, shall not, for the purposes of this provision, be included in theamount which is considered to cease because of such termination; and (c)the premium on the individual policy shall be at the insurer's thencustomary rate applicable to the form and amount of the individual policy,to the class of risk to which such person then belongs, and to his ageattained on the effective date of the individual policy.
(9) A provision that if the group policy terminates or is amended so asto terminate the insurance of any class of insured persons, every personinsured thereunder at the date of such termination whose insuranceterminates and who has been so insured for at least five (5) years prior tosuch termination date shall be entitled to have issued to him by theinsurer an individual policy of life insurance, subject to the sameconditions and limitations as are provided by (8) above, except that thegroup policy may provide that the amount of such individual policy shallnot exceed the smaller of (a) the amount of the person's life insuranceprotection ceasing because of the termination or amendment of the grouppolicy, less the amount of any life insurance for which he is or becomeseligible under any group policy issued or reinstated by the same or anotherinsurer within thirty-one (31) days after such termination, and (b) twothousand dollars ($2,000).
(10) A provision that if a person insured under the group policy diesduring the period within which he would have been entitled to have anindividual policy issued to him in accordance with (8) or (9) above andbefore such an individual policy shall have become effective, the amount oflife insurance which he would have been entitled to have issued to himunder such individual policy shall be payable as a claim under the grouppolicy, whether or not application for the individual policy or the paymentof the first premium therefor has been made.
(11) In the case of a policy issued to a creditor to insure debtors ofsuch creditor, a provision that the insurer will furnish to thepolicyholder for delivery to each debtor insured under the policy a formwhich shall contain the name and home office address of the insurer; thename or names of the debtor; the premium paid or the premium payable andmethod of computation thereof, or other amount of payment, if any isrequired of the debtor; a statement specifying when the debtor's insurancebecomes effective and when and under what conditions it shall terminate, orin lieu thereof, the month, day and year the insurance begins andterminates; any exceptions, limitations, or restrictions; and a statementthat the life of the debtor is insured under the policy and that any deathbenefit paid thereunder by reason of his death shall be applied first toreduce or extinguish the indebtedness.
History: L. 1951, ch. 301, § 2; L. 1969, ch. 234, § 1; July 1.
Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-434.Same; policy provisions required.No policy of group life insurance shall be delivered in this stateunless it contains in substance the following provisions, or provisionswhich in the opinion of the commissioner are more favorable to the personsinsured, or at least as favorable to the persons insured and more favorableto the policyholder: Provided, however, (a) That provisions 6 to 10inclusive, shall not apply to policies issued to a creditor to insuredebtors of such creditor; (b) that the standard provisions required forindividual life insurance policies shall not apply to group life insurancepolicies; and (c) that if the group life insurance policy is on a plan ofinsurance other than the term plan, it shall contain a nonforfeitureprovision or provisions, which in the opinion of the commissioner is or areequitable to the insured persons and to the policyholder, but nothingherein shall be construed to require that group life insurance policiescontain the same nonforfeiture provisions as are required for individuallife insurance policies:
(1) A provision that the policyholder is entitled to a grace period ofthirty-one (31) days for the payment of any premium due except the first,during which grace period the death benefit coverage shall continue inforce, unless the policyholder shall have given the insurer written noticeof discontinuance in advance of the date of discontinuance and inaccordance with the terms of the policy. The policy may provide that thepolicyholder shall be liable to the insurer for the payment of a pro ratapremium for the time the policy was in force during such grace period.
(2) A provision that the validity of the policy shall not be contested,except for nonpayment of premiums, after it has been in force for two (2)years from its date of issue; and that no statement made by any personinsured under the policy relating to his insurability shall be used incontesting the validity of the insurance with respect to which suchstatement was made after such insurance has been in force prior to thecontest for a period of two (2) years during such person's lifetime norunless it is contained in a written instrument signed by him.
(3) A provision that a copy of the application, if any, of thepolicyholder shall be attached to the policy when issued, that allstatements made by the policyholder or by the persons insured shall bedeemed representations and not warranties, and that no statement made byany person insured shall be used in any contest unless a copy of theinstrument containing the statement is or has been furnished to such personor to his beneficiary.
(4) A provision setting forth the conditions, if any, under which theinsurer reserves the right to require a person eligible for insurance tofurnish evidence of individual insurability satisfactory to the insurer asa condition to part or all of his coverage.
(5) A provision specifying an equitable adjustment of premiums or ofbenefits or of both to be made in the event the age of a person insured hasbeen misstated, such provision to contain a clear statement of the methodof adjustment to be used.
(6) A provision that any sum becoming due by reason of the death of theperson insured shall be payable to the beneficiary designated by the personinsured, subject to the provisions of the policy in the event there is nodesignated beneficiary as to all or any part of such sum living at thedeath of the person insured, and subject to any right reserved by theinsurer in the policy and set forth in the certificate to pay at its optiona part of such sum not exceeding two hundred fifty dollars ($250) to anyperson appearing to the insurer to be equitably entitled thereto by reasonof having incurred funeral or other expenses incident to the last illnessor death of the person insured.
(7) A provision that the insurer will issue to the policyholder fordelivery to each person insured an individual certificate setting forth astatement as to the insurance protection to which he is entitled, to whomthe insurance benefits are payable, and the rights and conditions set forthin (8), (9) and (10) following.
(8) A provision that if the insurance, or any portion of it, on a personcovered under the policy ceases because of termination of employment or ofmembership in the class or classes eligible for coverage under the policy,such person shall be entitled to have issued to him by the insurer, withoutevidence of insurability, an individual policy of life insurance withoutdisability or other supplementary benefits: Provided, Application forthe individual policy shall be made, and the first premium paid to theinsurer, within thirty-one (31) days after such termination: And providedfurther, That, (a) the individual policy shall, at the option of suchperson, be on any one of the forms except term insurance, then customarilyissued by the insurer at the age and for the amount applied for; (b) theindividual policy shall be in an amount not in excess of the amount of lifeinsurance which ceases because of such termination less, in the case of aperson whose membership in the class or classes eligible for coverageterminates but who continues in employment in another class, the amount ofany life insurance for which such person is or becomes eligible under anyother group policy within thirty-one (31) days after such termination:Provided, That any amount of insurance which shall have matured on orbefore the date of such termination as an endowment payable to the personinsured, whether in one sum or in installments or in the form of anannuity, shall not, for the purposes of this provision, be included in theamount which is considered to cease because of such termination; and (c)the premium on the individual policy shall be at the insurer's thencustomary rate applicable to the form and amount of the individual policy,to the class of risk to which such person then belongs, and to his ageattained on the effective date of the individual policy.
(9) A provision that if the group policy terminates or is amended so asto terminate the insurance of any class of insured persons, every personinsured thereunder at the date of such termination whose insuranceterminates and who has been so insured for at least five (5) years prior tosuch termination date shall be entitled to have issued to him by theinsurer an individual policy of life insurance, subject to the sameconditions and limitations as are provided by (8) above, except that thegroup policy may provide that the amount of such individual policy shallnot exceed the smaller of (a) the amount of the person's life insuranceprotection ceasing because of the termination or amendment of the grouppolicy, less the amount of any life insurance for which he is or becomeseligible under any group policy issued or reinstated by the same or anotherinsurer within thirty-one (31) days after such termination, and (b) twothousand dollars ($2,000).
(10) A provision that if a person insured under the group policy diesduring the period within which he would have been entitled to have anindividual policy issued to him in accordance with (8) or (9) above andbefore such an individual policy shall have become effective, the amount oflife insurance which he would have been entitled to have issued to himunder such individual policy shall be payable as a claim under the grouppolicy, whether or not application for the individual policy or the paymentof the first premium therefor has been made.
(11) In the case of a policy issued to a creditor to insure debtors ofsuch creditor, a provision that the insurer will furnish to thepolicyholder for delivery to each debtor insured under the policy a formwhich shall contain the name and home office address of the insurer; thename or names of the debtor; the premium paid or the premium payable andmethod of computation thereof, or other amount of payment, if any isrequired of the debtor; a statement specifying when the debtor's insurancebecomes effective and when and under what conditions it shall terminate, orin lieu thereof, the month, day and year the insurance begins andterminates; any exceptions, limitations, or restrictions; and a statementthat the life of the debtor is insured under the policy and that any deathbenefit paid thereunder by reason of his death shall be applied first toreduce or extinguish the indebtedness.
History: L. 1951, ch. 301, § 2; L. 1969, ch. 234, § 1; July 1.
Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-434.Same; policy provisions required.No policy of group life insurance shall be delivered in this stateunless it contains in substance the following provisions, or provisionswhich in the opinion of the commissioner are more favorable to the personsinsured, or at least as favorable to the persons insured and more favorableto the policyholder: Provided, however, (a) That provisions 6 to 10inclusive, shall not apply to policies issued to a creditor to insuredebtors of such creditor; (b) that the standard provisions required forindividual life insurance policies shall not apply to group life insurancepolicies; and (c) that if the group life insurance policy is on a plan ofinsurance other than the term plan, it shall contain a nonforfeitureprovision or provisions, which in the opinion of the commissioner is or areequitable to the insured persons and to the policyholder, but nothingherein shall be construed to require that group life insurance policiescontain the same nonforfeiture provisions as are required for individuallife insurance policies:
(1) A provision that the policyholder is entitled to a grace period ofthirty-one (31) days for the payment of any premium due except the first,during which grace period the death benefit coverage shall continue inforce, unless the policyholder shall have given the insurer written noticeof discontinuance in advance of the date of discontinuance and inaccordance with the terms of the policy. The policy may provide that thepolicyholder shall be liable to the insurer for the payment of a pro ratapremium for the time the policy was in force during such grace period.
(2) A provision that the validity of the policy shall not be contested,except for nonpayment of premiums, after it has been in force for two (2)years from its date of issue; and that no statement made by any personinsured under the policy relating to his insurability shall be used incontesting the validity of the insurance with respect to which suchstatement was made after such insurance has been in force prior to thecontest for a period of two (2) years during such person's lifetime norunless it is contained in a written instrument signed by him.
(3) A provision that a copy of the application, if any, of thepolicyholder shall be attached to the policy when issued, that allstatements made by the policyholder or by the persons insured shall bedeemed representations and not warranties, and that no statement made byany person insured shall be used in any contest unless a copy of theinstrument containing the statement is or has been furnished to such personor to his beneficiary.
(4) A provision setting forth the conditions, if any, under which theinsurer reserves the right to require a person eligible for insurance tofurnish evidence of individual insurability satisfactory to the insurer asa condition to part or all of his coverage.
(5) A provision specifying an equitable adjustment of premiums or ofbenefits or of both to be made in the event the age of a person insured hasbeen misstated, such provision to contain a clear statement of the methodof adjustment to be used.
(6) A provision that any sum becoming due by reason of the death of theperson insured shall be payable to the beneficiary designated by the personinsured, subject to the provisions of the policy in the event there is nodesignated beneficiary as to all or any part of such sum living at thedeath of the person insured, and subject to any right reserved by theinsurer in the policy and set forth in the certificate to pay at its optiona part of such sum not exceeding two hundred fifty dollars ($250) to anyperson appearing to the insurer to be equitably entitled thereto by reasonof having incurred funeral or other expenses incident to the last illnessor death of the person insured.
(7) A provision that the insurer will issue to the policyholder fordelivery to each person insured an individual certificate setting forth astatement as to the insurance protection to which he is entitled, to whomthe insurance benefits are payable, and the rights and conditions set forthin (8), (9) and (10) following.
(8) A provision that if the insurance, or any portion of it, on a personcovered under the policy ceases because of termination of employment or ofmembership in the class or classes eligible for coverage under the policy,such person shall be entitled to have issued to him by the insurer, withoutevidence of insurability, an individual policy of life insurance withoutdisability or other supplementary benefits: Provided, Application forthe individual policy shall be made, and the first premium paid to theinsurer, within thirty-one (31) days after such termination: And providedfurther, That, (a) the individual policy shall, at the option of suchperson, be on any one of the forms except term insurance, then customarilyissued by the insurer at the age and for the amount applied for; (b) theindividual policy shall be in an amount not in excess of the amount of lifeinsurance which ceases because of such termination less, in the case of aperson whose membership in the class or classes eligible for coverageterminates but who continues in employment in another class, the amount ofany life insurance for which such person is or becomes eligible under anyother group policy within thirty-one (31) days after such termination:Provided, That any amount of insurance which shall have matured on orbefore the date of such termination as an endowment payable to the personinsured, whether in one sum or in installments or in the form of anannuity, shall not, for the purposes of this provision, be included in theamount which is considered to cease because of such termination; and (c)the premium on the individual policy shall be at the insurer's thencustomary rate applicable to the form and amount of the individual policy,to the class of risk to which such person then belongs, and to his ageattained on the effective date of the individual policy.
(9) A provision that if the group policy terminates or is amended so asto terminate the insurance of any class of insured persons, every personinsured thereunder at the date of such termination whose insuranceterminates and who has been so insured for at least five (5) years prior tosuch termination date shall be entitled to have issued to him by theinsurer an individual policy of life insurance, subject to the sameconditions and limitations as are provided by (8) above, except that thegroup policy may provide that the amount of such individual policy shallnot exceed the smaller of (a) the amount of the person's life insuranceprotection ceasing because of the termination or amendment of the grouppolicy, less the amount of any life insurance for which he is or becomeseligible under any group policy issued or reinstated by the same or anotherinsurer within thirty-one (31) days after such termination, and (b) twothousand dollars ($2,000).
(10) A provision that if a person insured under the group policy diesduring the period within which he would have been entitled to have anindividual policy issued to him in accordance with (8) or (9) above andbefore such an individual policy shall have become effective, the amount oflife insurance which he would have been entitled to have issued to himunder such individual policy shall be payable as a claim under the grouppolicy, whether or not application for the individual policy or the paymentof the first premium therefor has been made.
(11) In the case of a policy issued to a creditor to insure debtors ofsuch creditor, a provision that the insurer will furnish to thepolicyholder for delivery to each debtor insured under the policy a formwhich shall contain the name and home office address of the insurer; thename or names of the debtor; the premium paid or the premium payable andmethod of computation thereof, or other amount of payment, if any isrequired of the debtor; a statement specifying when the debtor's insurancebecomes effective and when and under what conditions it shall terminate, orin lieu thereof, the month, day and year the insurance begins andterminates; any exceptions, limitations, or restrictions; and a statementthat the life of the debtor is insured under the policy and that any deathbenefit paid thereunder by reason of his death shall be applied first toreduce or extinguish the indebtedness.
History: L. 1951, ch. 301, § 2; L. 1969, ch. 234, § 1; July 1.
