215 ILCS 5/230.1
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article XIV - Legal Reserve Life Insurance

 (from Ch. 73, par. 842.1)Sec. 230.1.     Group Insurance Definition.     Except as provided in Section  230.2, no policy of group life insurance shall be delivered in this State  unless it conforms to one of the following descriptions:(A) A policy issued to an employer, or to the trustees of a fund established  by an employer, which employer or trustees shall be deemed the policyholder,  to insure employees of the employer for the benefit of persons other than the  employer, subject to the following requirements:(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" shall include 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. The policy may  provide that the term "employees" shall include the individual proprietor  or partners if the employer is an individual proprietorship or partnership.  The policy may provide that the term "employees" shall include retired employees  and directors of a corporate employer. A policy issued to insure the employees  of a public body may provide that the term "employees" shall include elected  or appointed officials.(2) The premium for the policy shall be paid either from the employer's  funds or from funds contributed by the insured employees, or from both.  Except as provided in paragraph (3) of this subsection (A), a policy on  which no part of the premium is to be derived from funds contributed by  the insured employees must insure all eligible employees, except those who  reject such coverage in writing.(3) An insurer may exclude or limit the coverage on any person as to whom  evidence of individual insurability is not satisfactory to the insurer.(B) A policy 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:(1) 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" shall include (i)  borrowers of money or purchasers or lessees of goods, services, or property  for which payment is arranged through a credit transaction; (ii) the debtors  of one or more subsidiary corporations; and (iii) 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.(2) 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 paragraph (3) of this subsection (B), 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.(3) An insurer may exclude any debtors as to whom evidence of individual  insurability is not satisfactory to the insurer.(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.  Whenever the amount of insurance payable exceeds the amount of outstanding  indebtedness the excess benefit shall be payable to the person otherwise contractually  or legally entitled thereto; if there be no person determined to be so entitled,  such excess shall be paid to the estate of the insured person.(6) Notwithstanding the provisions of the above paragraphs, insurance  on agricultural credit transaction commitments may be written up to the  amount of the loan commitment on a non-decreasing 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:(1) The members eligible for insurance under the policy shall be all of  the members of the union or organization, or all of any class or classes thereof.(2) The premium for the policy shall be paid either from funds of the  union or organization, or from the funds contributed by the insured members  specifically for their insurance, or from both. Except as provided in paragraph  (3) of this subsection (C), a policy on which no part of the premium is  to be derived from funds contributed by the insured members specifically  for their insurance must insure all eligible members, except those who reject  such coverage in writing.(3) An insurer may exclude or limit the coverage on any person as to whom  evidence of individual insurability is not satisfactory to the insurer.(D) A policy issued to a trust or to the trustees of a fund established  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 employers  or the unions or organizations, subject to the following requirements:(1) The persons eligible for insurance shall be all 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" shall  include retired employees, the individual proprietor or partners if an employer  is an individual proprietorship or a partnership, and directors of a corporate  employer. The policy may provide that the term "employees" shall include  the trustees or their employees, or both, if their duties are principally  connected with such trusteeship.(2) The premium for the policy shall be paid from funds contributed by  the employer or employers of the insured persons, or by the union or unions  or similar employee organizations, or by both, or from funds contributed  by the insured persons or from both the insured persons and the employer  or union or similar employee organizations. Except as provided in paragraph  (3) of this subsection  (D), a policy on which no part of the premium is to be derived from funds  contributed by the insured persons  specifically for their insurance must insure all eligible persons, except  those who reject such coverage in writing.(3) An insurer may exclude or limit the coverage on any person as to whom  evidence of individual insurability is not satisfactory to the insurer.(E) 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 have  at the outset a minimum of 100 persons; shall have been organized and maintained  in good faith for purposes other than that of obtaining insurance; shall  have been in active existence for at least two years; and shall have a constitution  and by-laws which provides 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. The  policy shall be subject to the following requirements:(1) The policy may insure members of such association or associations,  employees thereof or employees of members, or one or more of the preceding  or all of any class or classes thereof for the benefit of persons other  than the employee's employer.(2) The premium for the policy shall be paid from funds contributed by  the association or associations, or by employer members, or by both, or  from funds contributed by the covered persons or from both the covered persons  and the association, associations, or employer members.(3) Except as provided in paragraph (4) of this subsection (E), 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.(4) An insurer may exclude or limit the coverage of any person as to whom  evidence of individual insurability is not satisfactory to the insurer.    (Source: P.A. 83-1465.)