Source: https://law.lis.virginia.gov/vacodefull/title38.2/chapter33/
Timestamp: 2020-08-04 11:15:18
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Code of Virginia Code - Chapter 33. Life Insurance Policies
Table of Contents » Title 38.2. Insurance » Chapter 33. Life Insurance Policies
Chapter 33. Life Insurance Policies.
Article 2. Group Life Insurance Policies.
§ 38.2-3318. Repealed.
§ 38.2-3318.1. Group life insurance requirements.
Except as provided in § 38.2-3319.1, no policy of group life insurance shall be delivered in this Commonwealth unless it conforms to one of the following descriptions:
1. The employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes thereof. The policy may provide that the term "employees" include:
a. The employees of one or more subsidiary corporations, and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietorships or partnerships if the business of the employer and of such affiliated corporations, proprietorships, or partnerships is under common control;
b. The individual proprietor or partners if the employer is an individual proprietorship or partnership;
c. Retired employees, former employees and directors of a corporate employer; or
d. If the policy is issued to insure the employees of a public body, elected or appointed officials.
2. Issued to a creditor or its parent holding company or to a trustee or trustees or agent designated by two or more creditors, which creditor, holding company, affiliate, trustee, trustees or agent shall be deemed the policyholder, to insure debtors of the creditor, or creditors, subject to the following requirements:
a. The debtors eligible for insurance under the policy shall be all of the debtors of the creditor or creditors, or all of any class or classes thereof. The policy may provide that the term "debtors" includes:
(3) The debtors of one or more affiliated corporations, proprietorships, or partnerships if the business of the policyholder and of such affiliated corporations, proprietorships, or partnerships is under common control.
b. The premium for the policy shall be paid either from the creditor's funds, or from charges collected from the insured debtors, or from both. Except as provided in subdivision 3 of this subsection, a policy on which no part of the premium is to be derived from the funds contributed by insured debtors specifically for their insurance must insure all eligible debtors.
4. The amount of the insurance on the life of any debtor shall at no time exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor.
5. The insurance may be payable to the creditor or any successor to the right, title, and interest of the creditor. Such payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of such payment and any excess of the insurance shall be payable to the estate of the insured.
6. Notwithstanding the provisions of the above subsections, insurance on agricultural credit transaction commitments may be written up to the amount of the loan commitment on a nondecreasing or level term plan. Insurance on educational credit transaction commitments may be written up to the amount of the loan commitment less the amount of any repayments made on the loan.
C. A policy issued to a labor union, or similar employee organization, which shall be deemed to be the policyholder, to insure members of such union or organization for the benefit of persons other than the union or organization or any of its officials, representatives, or agents, subject to the following requirements:
D. A policy issued to or for (i) a multiple employer welfare arrangement, a rural electric cooperative, or a rural electric telephone cooperative as these terms are defined in 29 U.S.C. § 1002, or (ii) a trust or to the trustees of a fund established or adopted by two or more employers, or by one or more labor unions or similar employee organizations, or by one or more employers and one or more labor unions or similar employee organizations, which trust or trustees shall be deemed the policyholder, to insure employees of the employers or members of the unions or organizations for the benefit of persons other than the employees or the unions or organizations, 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 organizations, or all of any class or classes thereof. The policy may provide that the term employees includes:
a. The employees of one or more subsidiary corporations, and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietorships or partnerships if the business of the employer and of such affiliated corporations, proprietorships or partnerships is under common control;
d. The trustees or their employees, or both, if their duties are principally connected with such trusteeship.
E. 1. A policy issued to an association or to a trust or to the trustees of a fund established, created, or maintained for the benefit of members of one or more associations. The association or associations shall:
c. Have been in active existence for at least five years; and
d. Have a constitution and bylaws which provide that: (i) the association or associations hold regular meetings not less than annually to further purposes of the members, (ii) except for credit unions, the association or associations collect dues or solicit contributions from members, and (iii) the members have voting privileges and representation on the governing board and committees.
c. Except as provided in clause d of this subdivision, a policy on which no part of the premium is to be derived from funds contributed by the covered persons specifically for the insurance must insure all eligible persons, except those who reject such coverage in writing.
d. An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.
F. A policy issued to a credit union or to a trustee or trustees or agent designated by two or more credit unions, which credit union, trustee, trustees, or agent shall be deemed policyholder, to insure members of such credit union or credit unions for the benefit of persons other than the credit union or credit unions, trustee or trustees, or agent or any of their officials, subject to the following requirements:
3. An insurer may exclude or limit the coverage on any member as to whom evidence of individual insurability is not satisfactory to the insurer.
G. A policy issued to an incorporated association as described in § 38.2-4000, whose principal purpose is to assist its members in (i) financial planning for their funerals and burials and (ii) obtaining insurance for the payment, in whole or in part, for funeral, burial and other expenses. The association shall be deemed the policyholder, to insure the members of the association for the benefit of persons other than the association. The policy shall be subject to the following requirements:
1. A policy may not be issued to an association in which membership is conditioned upon the member's designation at any time of a specific funeral director or cemetery as the beneficiary under the insurance, so as to deprive the representatives or family of the deceased member from, or in any way control them in, obtaining funeral supplies and services in an open competitive market.
2. The policy shall insure members of such association.
3. The premium for the policy shall be paid from funds contributed by the association, or from funds contributed by the covered persons, or both.
4. Except as provided in subdivision 5 of this subsection, a policy on which no part of the premium is to be derived from funds contributed by the covered persons specifically for the insurance must insure all eligible persons except those who reject the coverage in writing.
5. An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.
§ 38.2-3319. Repealed.
§ 38.2-3319.1. Limits of group life insurance.
Group life insurance offered to a resident of this Commonwealth under a group life insurance policy issued to a group other than one described in § 38.2-3318.1 shall be subject to the following requirements:
A. No such group life insurance policy shall be delivered in this Commonwealth unless the Commission finds that:
B. No such group life insurance coverage may be offered in this Commonwealth by an insurer under a policy issued in another state unless this Commonwealth or another state having requirements substantially similar to those contained in subdivisions 1, 2 and 3 of subsection A has made a determination that such requirements have been met.
An insurer offering group life insurance coverage in this Commonwealth under this subsection shall file a certification, signed by the officer of the company having responsibility for forms compliance in which the company certifies that all group insurance coverage marketed to residents of this Commonwealth under policies which have not been approved by this Commonwealth will comply with the provisions of § 38.2-3318.1 or have met the requirements set forth in subdivisions A 1 through A 3 of this section, and which clearly demonstrates that the substantially similar requirements of the state in which the contract will be issued have been met. The certification shall be accompanied by documentation from such state evidencing the determination that such requirements have been met.
§ 38.2-3320. Repealed.
§ 38.2-3321. Repealed.
§ 38.2-3322. Repealed.
§ 38.2-3322.1. Regulations.
The Commission may issue regulations to establish standards for group life insurance pursuant to the authority provided in § 38.2-223.
§ 38.2-3322.2. Lives covered.
A group life insurance policy shall cover at least two persons, other than spouses or minor children, at the issue date and at each policy anniversary date.
§ 38.2-3324. Standard provisions required; exceptions.
A. No group life insurance policy shall be delivered or issued for delivery in this Commonwealth unless it contains in substance the standard provisions prescribed in this article. The standard provisions required for individual life insurance policies shall not apply to group life insurance policies.
B. If a group life insurance policy is not term insurance, it shall contain a nonforfeiture provision that in the opinion of the Commission is equitable to the insured persons and to the policyholder. This subsection shall not be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies.
C. The provisions of § 38.2-3330, subsection A of § 38.2-3331, and §§ 38.2-3332 through 38.2-3334 shall not apply to policies issued pursuant to § 38.2-3318.1 B or group life insurance contracts in which the insurable interest is as described in subdivision 3 of subsection B of § 38.2-301.
Code 1950, §§ 38-429, 38-431; 1952, c. 317, § 38.1-424; 1960, c. 273; 1968, c. 282; 1970, c. 145; 1986, c. 562; 1993, c. 105; 1998, c. 154.
§ 38.2-3326. Incontestability.
A. Each group life insurance policy shall contain 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 years from its date of issue.
Code 1950, § 38-429(1); 1952, c. 317, § 38.1-425; 1986, c. 562.
§ 38.2-3328. Evidence of individual insurability.
Each group life insurance policy shall contain a provision setting forth any conditions under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of his coverage.
1960, c. 273, § 38.1-426.1; 1986, c. 562.
§ 38.2-3330. Payment of benefits.
Each group life insurance policy shall contain a provision that any sum payable because of the death of the person insured shall be payable to the beneficiary or beneficiaries designated by the person insured, subject to:
1. The provisions of the policy as to all or any part of such sum if there is no designated beneficiary living at the time of death of the person insured; and
2. Any right reserved by the insurer in the policy and set forth in the certificate to pay a part of the sum, not exceeding $2,000, to any person appearing to the insurer to be equitably entitled thereto because of having incurred funeral or other expenses incident to the death or last illness of the person insured.
1960, c. 273, § 38.1-427.1; 1986, c. 562.
§ 38.2-3331. Individual certificates.
A. Each group life insurance policy shall contain a provision that the insurer will issue to the policyholder, for delivery to each person insured, an individual certificate setting forth:
1. The insured person's insurance protection, including any limitations, reductions and exclusions applicable to the coverage provided;
2. To whom the insurance benefits are payable; and
3. The rights and conditions set forth in §§ 38.2-3332, 38.2-3333 and 38.2-3334.
B. Each policy issued pursuant to § 38.2-3318.1 B, where any part of the premium is paid by the debtors or by the creditor from identifiable charges collected from the insured debtors not required of an uninsured debtor, shall contain a provision that the insurer will furnish to the policyholder for delivery to each debtor insured under the policy a form that will contain a statement that the life of the debtor is insured under the policy and that any death benefit paid under the policy by reason of his death shall be applied to reduce or extinguish the indebtedness.
Code 1950, § 38-429(4); 1952, c. 317, § 38.1-428; 1960, c. 273, § 38.1-428.4; 1986, c. 562; 1998, c. 154.
§ 38.2-3332. Right to individual policy upon termination of employment or membership.
Each group life insurance policy shall contain a provision that if the insurance, or any portion of it, on a person covered under the policy, other than a minor child insured pursuant to § 38.2-3323, ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, the person shall be entitled to have the insurer issue him without evidence of insurability an individual policy of life insurance, without disability or other supplementary benefits, subject to the following:
1. Application for the individual policy shall be made, and the first monthly or other mutually agreeable modal premium paid to the insurer, within thirty-one days after the termination;
2. The individual policy shall at the option of the person be on any one of the forms, except term insurance, then customarily issued by the insurer, subject to the insurer's customary age and amount requirements for the forms;
3. The amount of the individual policy shall not exceed the amount of terminated group life insurance less the amount of any group life insurance that the person is or becomes eligible for within thirty-one days after the termination. Any amount of insurance maturing on or before the date of the termination as an endowment payable to the person insured, whether in one sum, installments or in the form of an annuity, shall not be included in the amount of terminated group life insurance; and
4. The premium on the individual policy shall be at the insurer's then current rate applicable to the form and amount of the individual policy, to the class of risk to which the person then belongs, and to the person's age on the effective date of the individual policy.
1960, c. 273, § 38.1-428.1; 1986, c. 562.
§ 38.2-3333. Right to individual policy upon termination of group policy or elimination of class of insured persons.
Each group life insurance policy shall contain a provision that if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person, other than a minor child insured pursuant to § 38.2-3323, whose insurance terminates and who has been insured for at least five years prior to the termination date shall be entitled to have the insurer issue him an individual life insurance policy. The individual life policy shall be subject to the conditions and limitations set forth in § 38.2-3332. However, the group policy may contain a provision that the amount of the individual policy shall not exceed the smaller of (i) the amount of the person's life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which he is or becomes eligible under any group policy issued or reinstated by the same or another insurer within 31 days after the termination, or (ii) $10,000.
1960, c. 273, § 38.1-428.2; 1986, c. 562.
§ 38.2-3336. Provisions required by other jurisdictions.
Group life insurance policies issued by any foreign or alien insurer for delivery in this Commonwealth may contain any provision that is prescribed by the laws of its domiciliary jurisdiction and that is not in conflict with the laws of this Commonwealth. Policies issued by any domestic insurer for delivery in any other jurisdiction may contain any provision required by the laws of that jurisdiction.
Code 1950, § 38-430; 1952, c. 317, § 38.1-430; 1986, c. 562.
§ 38.2-3338. Provisions prohibited.
No group life insurance policy shall be delivered or issued for delivery in this Commonwealth if it contains any provision:
1. Limiting the time within which any action at law or in equity may be commenced to less than one year after the cause of action accrues; or
2. To the effect that the agent soliciting the insurance is the agent of the person insured under the policy, or making the acts or representations of the agent binding upon the person insured under the policy.
Article 3. Industrial Life Insurance Policies.
§ 38.2-3341. Standard provisions required.
No industrial life insurance policy shall be delivered or issued for delivery in this Commonwealth, unless it contains in substance the provisions prescribed in this article or provisions that are, in the Commission's opinion, more favorable to policyowners.
Code 1950, §§ 38-434, 38-435; 1952, c. 317, § 38.1-410; 1986, c. 562.
§ 38.2-3343. Grace period.
A. Each industrial life insurance policy shall contain a provision that the insured is entitled to a grace period of twenty-eight days within which the payment of any premium after the first may be made. This grace period shall terminate at noon on the twenty-eighth day after the due date of the defaulted premium. However, for monthly payment policies the insured shall be entitled to a grace period of not less than thirty-one days.
B. Each policy shall also contain a provision that during the grace period the policy shall continue in full force, but if a claim arises under the policy during the grace period and before the overdue premiums are paid, the amount of overdue premiums may be deducted in any settlement under the policy.
Code 1950, § 38-434(1); 1952, c. 317, § 38.1-411; 1986, c. 562.
§ 38.2-3345. Incontestability.
Each industrial life insurance policy shall contain a provision that the policy shall be incontestable after it has been in force for two years from the date of issue during the lifetime of the insured, except for nonpayment of premiums, and except as to provisions and conditions (i) relating to benefits in the event of certain specific types of disability and (ii) granting additional insurance specifically against death by accident or accidental means.
Code 1950, § 38-434(3); 1952, c. 317, § 38.1-413; 1986, c. 562.
§ 38.2-3347. Nonforfeiture benefits and cash surrender values.
Each industrial life insurance policy shall contain a provision for nonforfeiture benefits in accordance with the requirements of §§ 38.2-3202 and 38.2-3208, and a provision for cash surrender values in accordance with the requirements of §§ 38.2-3203 and 38.2-3209.
Code 1950, § 38-434(5), (6); 1952, c. 317, § 38.1-415; 1986, c. 562.
§ 38.2-3349. Table of nonforfeiture options.
Each industrial life insurance policy shall contain a table showing the nonforfeiture options available under the policy each year upon default in the payment of premiums during at least the first twenty years of the policy, or during the premium-paying period if less than twenty years. There shall also be a provision that the insurer will furnish, upon request, an extension of the table beyond the years shown in the policy.
Code 1950, § 38-434(8); 1952, c. 317, § 38.1-417; 1986, c. 562.
§ 38.2-3350. Settlement.
Each industrial life insurance policy shall contain a provision that when a death claim arises under the policy, settlement shall be made within two months after receipt of due proof of death.
Code 1950, § 38-434(9); 1952, c. 317, § 38.1-418; 1986, c. 562.
§ 38.2-3351. Title.
Each industrial life insurance policy shall have a title on its face that briefly and accurately describes the nature and form of the policy.
Code 1950, § 38-434(10); 1952, c. 317, § 38.1-419; 1986, c. 562.
§ 38.2-3352. Provisions not required in certain policies.
The provisions of this article do not apply to policies issued or granted in exercise of the nonforfeiture provisions of § 38.2-3347.
Code 1950, § 38-438; 1952, c. 317, § 38.1-420; 1986, c. 562.
§ 38.2-3353. Provisions required by other jurisdictions.
Industrial life insurance policies issued by any foreign or alien insurer for delivery in this Commonwealth may contain any provision that is prescribed by the laws of its domiciliary jurisdiction and is not in conflict with the laws of this Commonwealth. Policies issued by any domestic insurer for delivery in any other jurisdiction may contain any provision required by the laws of that jurisdiction.
Code 1950, § 38-436; 1952, c. 317, § 38.1-421; 1986, c. 562.