2023 New York Laws › ISC - Insurance › Article 42 - Life Insurance Companies and Accident and Health Insurance Companies and Legal Services Insurance Companies › 4216 - Group Life Insurance; Premium Requirements; Notice of Conversion; Filing of Compensation.

§   4216.  Group  life  insurance;  premium  requirements;  notice  of
conversion; filing of compensation. (a) (1) In this chapter:
(A) "Group life insurance" means that form of life insurance  covering
any  one  of  the  groups  specified  in subsection (b) hereof, which is
written under  a  policy  issued  to  the  policyholder  as  hereinafter
defined, and which in all other respects conforms to the requirements of
subsection (b) hereof.
(B)  "Certificate  holder,"  as  used  in  relation  to  a  group life
insurance policy, means the person to whom a certificate evidencing such
insurance is issued under any such policy, as hereinafter provided.
(2)  In  this  section,  for  the  purposes  of  insurance  hereunder:
"employees"  may  be  deemed  to  include  (i)  the  officers, managers,
employees and retired employees of the employer  and  of  subsidiary  or
affiliated  corporations  of  a  corporate  employer, and the individual
proprietors, partners, employees and  retired  employees  of  affiliated
individuals   and   firms  controlled  by  the  employer  through  stock
ownership, contract or otherwise;  (ii)  the  individual  proprietor  or
partner  if  the  employer is an individual proprietor or a partnership;
(iii) as used in paragraph one of subsection (b) hereof,  the  directors
of  the  employer  and  of  subsidiary  or  affiliated corporations of a
corporate employer; and (iv) as used in  paragraphs  four  and  five  of
subsection  (b)  hereof,  the  trustees  or their employees, or both, if
their duties are principally connected with such trusteeship.
(b) Any life insurance company authorized to do business in this state
may deliver in this state policies  of  group  life  insurance  only  as
follows:
(1)  A  policy  issued to an employer or to a trustee or trustees of a
fund established by an employer, which employer  or  trustees  shall  be
deemed the policyholder, insuring with or without evidence of individual
insurability  satisfactory  to  the insurer, employees of such employer,
and insuring, except as hereinafter provided, all of such  employees  or
all  of any class or classes thereof determined by conditions pertaining
to the employment, or by a combination of such conditions and conditions
pertaining to  the  family  status  of  the  employee,  for  amounts  of
insurance  on  each  person  insured  based  upon  some  plan which will
preclude individual selection. However, such a plan may permit a limited
number of selections by employees if the selections  offered  utilize  a
consistent  pattern  of  grading the amounts of insurance for individual
group members so that the resulting pattern of coverage  is  reasonable.
The  premium  for  the  policy shall be paid by the policyholder, either
wholly from the employer's  funds  or  from  funds  contributed  by  the
insured employees, or from funds contributed jointly by the employer and
employees.  If  all  or  part of the premium is to be derived from funds
contributed by the insured employees, such policy must insure a  minimum
of  fifty percent or five of such eligible employees whichever is fewer.
Except as provided in  subsection  (b)  of  section  four  thousand  two
hundred  thirty-one  of this article and in paragraph five of subsection
(a) of section three thousand two hundred twenty of this  chapter,  such
policy  shall  provide  for  payment  of all benefits thereunder, to the
person insured or to some beneficiary or beneficiaries  other  than  the
employer,  and  shall  provide  for the issuance of a certificate to the
policyholder for delivery to the person insured or to such  beneficiary,
as evidence of such insurance.
(2)  A  policy  issued  to  a  labor  union, which shall be deemed the
policyholder  insuring,  with  or   without   evidence   of   individual
insurability  satisfactory  to  the  insurer,  not less than twenty-five
members of such union, and insuring, except as hereinafter provided  all
of  the  members  of  such  union or all of any class or classes thereof

determined by conditions pertaining to their employment or membership in
the union, or both, and who are actively engaged in  their  occupations,
for  amounts  of  insurance  on each person insured based upon some plan
which  will  preclude  individual  selection.  However,  such a plan may
permit a limited number of  selections  by  members  if  the  selections
offered utilize a consistent pattern of grading the amounts of insurance
for  individual  group members so that the resulting pattern of coverage
is reasonable. The premium on such policy may be paid by the  union,  by
the  members, or by the union and its members jointly. If the premium is
paid by the members or by the union and its members jointly such  policy
must  insure not less than fifty percent of such eligible members or, if
less, fifty or more of such members. Except  as  provided  in  paragraph
five  of  subsection (a) of section three thousand two hundred twenty of
this chapter, such policy shall provide for the payment of  benefits  to
the  person  insured or to some beneficiary or beneficiaries, other than
the union or any of its officials, representatives or agents, and  shall
provide  for  the issuance of a certificate to the union for delivery to
the  person  insured  or  to  such  beneficiary,  as  evidence  of  such
insurance.  Any such policy may vary from the foregoing requirements, as
follows:
(A) if the policy is cancellable at the option of the insurer  at  the
end  of any policy year and if the basis of premium rates may be changed
by the insurer at the beginning of any policy year, all members of  such
labor union may be insured thereunder;
(B) if and when members of such union apply for and pay for additional
amounts  of  insurance,  a smaller percentage of such members than fifty
percent may, with evidence of individual  insurability  satisfactory  to
the insurer, be insured thereunder for such additional amounts.
(3)  (A)  A  policy issued to a creditor or vendor, or to a trustee or
agent designated by two or more creditors or  vendors,  which  creditor,
vendor,  trustee,  or  agent shall be deemed the policyholder, except as
hereinafter provided.
(B) The policy shall insure all of the members, but may exclude any as
to whom evidence of individual insurability is not satisfactory  to  the
insurer, of a group of debtors or vendees, defined as follows:
(i) all of the borrowers, or borrowers and guarantors of borrowers, or
intended borrowers (under a program for defraying the cost of attendance
of a student at a college or university or at an elementary or secondary
school  providing  education required for minors, which program includes
provision for immediate periodic payments by the parent or  guardian  of
such  student  and  a  loan  commitment to such parent and guardian by a
financial institution, or by or on behalf of a college or university  or
such  an elementary or secondary school to defray the cost of attendance
at such college or university  or  elementary  or  secondary  school  in
excess  of  the accumulated periodic payments by the parent or guardian)
from  one  financial  institution  and  its  subsidiary  or   affiliated
companies,  or from two or more creditors or vendors so designating such
trustee, trustees or agent, or
(ii) all  of  the  purchasers  of  securities,  merchandise  or  other
property  from  one  vendor,  or from two or more vendors so designating
such trustee or agent, or
(iii) all of any class  or  classes  of  such  debtors  or  purchasers
determined  by  conditions  pertaining  to  the  type of indebtedness or
purchase.
(C) The policy may specify the ages to which  the  insurance  provided
shall be limited, provided however that if the insurance terminates at a
particular  age,  the  age  at  which it terminates shall be prominently
displayed on the application for insurance.
(D) If the  agreement  provides  for  repayment  in  instalments,  the
insurance may be continued for the duration of the debt over a period of
not  more  than  thirty-five  years  from  the  date  the  debt is first
incurred; otherwise the insurance may be continued for a period  not  in
excess  of  eighteen  months except that such insurance may be continued
for an additional period  not  exceeding  six  months  in  the  case  of
default, extension or recasting of the loan.
(E) Notwithstanding anything in this paragraph to the contrary,
(i)  the  insurance  of borrowers, who incur indebtedness arising from
the granting of policy loans pursuant  to  policy  provisions  therefor,
provided  under  a  policy  issued to the insurance company granting the
policy loan, may be continued for the duration of the indebtedness,
(ii) under a plan approved by  the  superintendent  the  insurance  of
debtors  with  respect  to  an  agreement  which  does  not  provide for
repayment in instalments may  be  continued  for  the  duration  of  the
indebtedness   but   not  more  than  seven  years  from  the  date  the
indebtedness is incurred, and
(iii) the insurance of persons who are tenants or  shareholders  of  a
mutual   or   other  housing  corporation  (organized  pursuant  to  the
provisions of the private housing finance  law  and  regulated  by  such
statute  as  to  rent, dividends and profits) under a policy issued with
identifiable charges or fixed amounts of premiums to such corporation or
to a trustee or trustees  or  agent  designated  by  one  or  more  such
corporations  may  be  continued for the term of the tenant's lease with
such corporation or  thirty-six  months  or  whichever  is  the  greater
period,  and  the amount of insurance with respect to any person insured
under such policy may be a fixed amount not greater than the  lesser  of
fifty-five  thousand  dollars or an amount equal to thirty-six times the
monthly instalments due under such lease.
(F) The benefits of any policy authorized under this  paragraph  shall
be  payable  to the policyholder; but the amount of any benefit received
by the policyholder thereunder not in excess of the actual  indebtedness
shall  be applied by the policyholder to the discharge of any obligation
of  the  person  insured,  or  his  personal  representative,   to   the
policyholder,  creditor  or  his  assignee and the amount of any benefit
received  by  the  policyholder  thereunder  in  excess  of  the  actual
indebtedness  shall  be payable to a beneficiary named by the debtor or,
if none, then either to the estate of the debtor or under the  provision
of a facility of payment clause.
(G) No such group shall be eligible for insurance hereunder unless the
new entrants to such group number at least twenty-five persons yearly.
(H)  The  premium  for  the  policy shall be paid by the policyholder,
either from the creditor's or vendor's funds, or from charges  collected
from  the insured debtors or purchasers, or from both. A policy on which
all or part of the premium to be derived from the  collection  from  the
insured  debtors  or  purchasers of identifiable charges not required of
uninsured debtors or  purchasers  may  be  issued  only  if  the  policy
reserves  to  the  insurer  the  right to require evidence of individual
insurability if less than seventy-five percent of the  new  entrants  in
any year become insured and provided that such policy shall not include,
in the class or classes of debtors or purchasers eligible for insurance,
debtors or purchasers under obligations outstanding at its date of issue
without evidence of individual insurability unless at least seventy-five
percent  of  the  then  eligible  debtors or purchasers elect to pay the
required charges.
(I) The policy may be issued to an assignee to whom such  creditor  or
vendor  has  transferred  all  of  its  right, title and interest to the

unpaid indebtedness, or to the unpaid purchase  price,  under  all  such
agreements made by it.
(J) The amount of insurance on any person insured under a policy shall
not at any time exceed:
(i)  in  all  cases  except  as  hereinafter  provided  the  lesser of
fifty-five thousand dollars and the amount of unpaid indebtedness or the
amount of the purchase price unpaid by such person;
(ii) in the case of a loan  commitment  pursuant  to  the  hereinabove
program  for  defraying the cost of attendance of a student at a college
or university or at such an elementary or secondary school,  the  lesser
of  fifty-five  thousand  dollars and the total of the unpaid balance of
the scheduled periodic payments whether due or not due and the amount of
any outstanding loan commitment pursuant to such a program; or
(iii) in the case of a transaction secured by a real estate  mortgage,
the  lesser  of  the  sum of two hundred twenty thousand dollars and the
amount of the indebtedness so secured.
(iv) in the case of indebtedness arising from a  credit  card  account
where  there  is no specific charge for insurance, the lesser of the sum
of one hundred thousand dollars or the amount of unpaid indebtedness.
(K) (i) With respect to loans made by production  credit  associations
organized  pursuant to the federal Farm Credit Act of 1933, 12 U.S.C. §§
1131c - 1138c, and with respect to loans made by a bank,  trust  company
or  industrial  bank  to  a borrower engaged in the business of farming,
crop production or the raising,  breeding,  fattening  or  marketing  of
livestock  for  the  purposes of such business and other requirements of
the borrower, the amount of insurance may exceed the unpaid indebtedness
and shall not be limited as to amount except that  the  insurance  shall
not exceed the greater of the loan commitment or the outstanding balance
of  the  loan  at  the inception of the period for which the borrower is
insured.
(ii) With respect to loans made  by  Federal  Land  Banks  established
pursuant  to  an  Act  of  Congress  of  the  United States entitled the
"Federal Farm Loan Act", approved  July  seventeenth,  nineteen  hundred
sixteen, as amended, the amount of insurance on any person insured under
the  policy  shall  not  at  any  time  exceed  the amount of the unpaid
indebtedness at the inception of the period for which premiums are paid,
but shall not otherwise be limited as to amount.
(L) The superintendent shall prescribe from time to  time  regulations
determining  the procedures, terms and conditions applicable to a policy
issued pursuant to this paragraph to the trustee or agent designated  by
two or more creditors or vendors.
(M)  Each  insurer  shall  file  with  the superintendent its forms of
policies, certificate statements and applications pertaining  to  credit
insurance  together  with  its  premium rates for such insurance and the
same shall be subject to his  approval.  The  superintendent  shall  not
approve  any  such  forms  if  the  premium  charged  is unreasonable in
relation to the benefits provided.
(N) For the purposes of this  paragraph:  (i)  "creditor"  includes  a
lessor  of  real or personal property, (ii) "borrower" includes a lessee
of real or personal property, and (iii) "indebtedness" includes  rentals
payable under the lease of real or personal property.
(4)  A policy issued to a trustee or trustees of a fund established or
participated in 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  trustee
or trustees shall be deemed the policyholder, to insure employees of the
employers or members of the unions for the benefit of persons other than
the employers or the unions, subject to the following requirements:
(A)  The  persons eligible for insurance shall be all of the employees
of the employers or all of the members of the  unions,  or  all  of  any
class  or  classes  thereof determined by conditions pertaining to their
employment, or to membership in the unions, or to both.
(B)  The  premium  for the policy shall be paid by the trustees either
wholly from funds contributed  by  the  employer  or  employers  of  the
insured  persons  or  by  the union or unions, or by both, or from funds
contributed by the insured persons, or jointly from such funds and funds
contributed by the insured persons specifically for their  insurance.  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,  excluding  any  as  to  whom  evidence  of
individual insurability is not satisfactory to the insurer.
(C) The policy shall insure at least fifty persons at date of issue.
(D) The amounts of insurance under the policy shall be based upon some
plan precluding individual selection either by the insured persons or by
the  policyholder, employers, or unions. However, such a plan may permit
a limited number of selections by employees or members if the selections
offered utilize a consistent pattern of grading the amounts of insurance
for individual group members so that the resulting pattern  of  coverage
is reasonable.
(E) With respect to a policy issued to a trustee or trustees of a fund
established by one or more labor unions, or by one or more employers and
one  or  more  labor  unions  the  proposed insured must submit, and the
insurer must obtain, a written certification that a reasonable number of
comparative bids have been obtained from  different  insurers  and  that
such  bids have been considered by the trustees before making a decision
concerning which bid  to  accept.  Such  decision  must  be  made  at  a
trustees'  meeting  held on a date certain, and a copy of the minutes of
such meeting must be attached to such certification.
(5) A policy issued to a trustee or trustees of a fund established  or
participated  in  by  the employer members of a trade association, which
trustee  or  trustees  shall  be  deemed  the  policyholder,  to  insure
employees  of  such  employers for the benefit of persons other than the
association or the employers, subject to the following requirements:
(A) The policy may be issued only if:
(i) the association has been in existence for at least two  years  and
was formed for purposes principally other than obtaining insurance, and
(ii)  the participating employers, meaning such employer members whose
employees are to be insured, constitute at date of issue at least  fifty
percent of the total employers eligible to participate, unless the total
number of persons covered at date of issue exceeds six hundred, in which
event  such participating employers must constitute at least twenty-five
percent  of  such  total  employers,  in  either  case   omitting   from
consideration any employer whose employees are already covered for group
life insurance;
(B)  The  persons eligible for insurance under the policy shall be all
of the employees of the participating employers, or all of any class  or
classes thereof determined by conditions pertaining to their employment.
(C)  The  premium  for  the  policy  shall  be  paid by the trustee or
trustees either wholly from funds contributed by the employers or by the
employees  or  funds  contributed  jointly  by  the  employers  and  the
employees.  A policy on which no part of the premium so payable is to be
derived from funds contributed by the insured employees must insure  all
eligible  employees,  excluding  any  as  to whom evidence of individual
insurability is not satisfactory to the insurer;
(D) The policy must cover at least fifty employees at date of issue;
(E) The amounts of insurance under the policy must be based upon  some
plan  precluding  individual selection either by the employees or by the
policyholder or the employer. However, such a plan may permit a  limited
number  of  selections  by employees if the selections offered utilize a
consistent  pattern  of  grading  the amount of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
(6) A policy issued to a duly organized association of  civil  service
employees  which  shall  include  in  its  membership not less than five
thousand civil service employees having a common employer, or to a  duly
organized  association  of teachers having a membership of not less than
five thousand, which association, in either event, shall be  deemed  the
policyholder,  and  which  shall  have been formed and is maintained for
purposes other than to effect group life insurance on its members.  Such
policy  shall  insure  only members of such association, with or without
evidence of individual insurability satisfactory to the  insurer,  based
upon  a  plan  which will preclude individual selection. However, such a
plan may permit a  limited  number  of  selections  by  members  if  the
selections  offered  utilize a consistent pattern of grading the amounts
of insurance for individual group members so that the resulting  pattern
of coverage is reasonable. The premium on such policy may be paid by the
association  or by the association and the insured members jointly or by
the insured members alone. Every member  of  such  association  in  good
standing shall have opportunity to apply for such insurance and not less
than  sixty  percent  of the eligible members in good standing may be so
insured. Such policy shall provide for the payment of  benefits,  except
policy  dividends,  to  the  person  insured  or  to some beneficiary or
beneficiaries, other than the association or  any  of  its  officers  or
directors,  as  such,  and  shall  also  provide  for  the issuance of a
certificate to the association for delivery to the person insured or  to
such beneficiary, as evidence of such insurance.
(7)  A  policy  insuring the members of one or more troops or units of
the state  troopers  or  state  police  of  any  state,  issued  to  the
commanding  officer  of the state troopers or state police, who shall be
deemed the policyholder, the premium on which  is  to  be  paid  by  the
members  insured;  or  a policy covering the members of one or more duly
incorporated police officers' benevolent associations or of one or  more
associations  or  organizations  of  uniformed firefighters or volunteer
firefighters  or  volunteer  ambulance  workers  which  association   or
organization  shall  have been in existence for at least two years prior
to the issuance of such policy and which shall have twenty-five  members
at  the  time  of  the issuance of such policy, which shall be issued to
such association or to a trustee or trustees of a fund  established,  or
participated in, by one or more of such associations or organizations as
the  policyholder.  If the opportunity to take such insurance is offered
to all eligible members of a  unit  of  such  state  troopers  or  state
police, or to all eligible members of such incorporated police officers'
benevolent association or of an association or organization of uniformed
firefighters,  volunteer  firefighters, then not less than fifty percent
of such members or, if less, fifty or more of such  members  may  be  so
insured.  If  the insurance is limited to those eligible members who are
employed as state troopers, police officers, firefighters  or  volunteer
ambulance  workers,  then not less than sixty percent or five hundred of
such members, whichever is less, may be so insured.  Such  policy  shall
provide  for  the  payment  of benefits, except policy dividends, to the
person insured or to some beneficiary or beneficiaries, other than  such
commanding officer or such association or any of its officials, as such,
and  shall  also  provide  for  the  issuance  of  a  certificate to the
policyholder for delivery to the person insured or to such  beneficiary,

as  evidence  of  such insurance. For the purposes of this paragraph any
association currently holding premium dividends as a result of  policies
issued  under this section shall be permitted to maintain said dividends
for  the  general purposes of the entire membership. For the purposes of
this paragraph the term "eligible members of an association of volunteer
firefighters or volunteer ambulance workers" means members  who  perform
services  in  fire-fighting duties or members of a volunteer exempt fire
benevolent  association  who  are  entitled   to   benefits   from   the
expenditures  of  foreign fire insurance tax moneys, including, inactive
exempt volunteer firefighters as defined by section two hundred  of  the
general  municipal law or in ambulance-related duties, respectively. The
amounts of insurance may be based upon a plan which  permits  a  limited
number  of selections by the members if the selections offered utilize a
consistent pattern of grading the amounts of  insurance  for  individual
group members so that the resulting pattern of coverage is reasonable.
(8) (A) A policy issued to a municipal corporation or a public housing
authority,   which   corporation   or  authority  shall  be  deemed  the
policyholder,  insuring,  with  or  without   evidence   of   individual
insurability  satisfactory  to  the  insurer,  not less than twenty-five
employees of such corporation or authority, except that in each  of  the
villages  of  Croton-on-Hudson  and  Lloyd Harbor not less than ten such
employees, and insuring all of such employees or all  of  any  class  or
classes  thereof  determined by conditions pertaining to the employment,
for amounts of insurance on each person insured  based  upon  some  plan
which  will  preclude  individual  selection.  However,  such a plan may
permit a limited number of selections by  employees  if  the  selections
offered utilize a consistent pattern of grading the amounts of insurance
for  individual  group members so that the resulting pattern of coverage
is reasonable.
(B) The premium for the policy may be paid either by the  policyholder
or  by the insured employees, or both, in the manner provided in section
ninety-three of the general municipal law. If a part of the  premium  is
to  be  derived  from funds contributed by insured employees, the policy
must  insure  not  less  than  seventy-five  percent  of  all   eligible
employees.  Such policy shall provide for the payment of benefits to the
person insured or to some beneficiary or beneficiaries  other  than  the
municipal  corporation  or  the public housing authority, and shall also
provide for the issuance  of  a  certificate  to  the  policyholder  for
delivery  to  the  person insured or to such beneficiary, as evidence of
such insurance. A policy on which no  part  of  the  premium  is  to  be
derived from funds contributed by the insured employees specifically for
their insurance must insure all eligible employees, or all except any as
to  whom  evidence of individual insurability is not satisfactory to the
insurer.
(C) Subject to the constitution and general laws of this state,  every
municipal  corporation  or  public  housing  authority  is  empowered to
contract by its fiscal or disbursing officer  with  an  authorized  life
insurance  company  for  group  life  insurance  on  the  lives  of  its
employees.
(9) A policy issued to the state covering, with or without evidence of
individual insurability satisfactory to the  insurer,  persons  who  are
managerial   or   confidential   employees,  or  retired  managerial  or
confidential employees, of  governments  or  public  employers  for  the
purposes  of  article fourteen of the civil service law. The state shall
be deemed to be the policyholder. With respect  to  its  employees,  the
state  and  each other participating government or public employer shall
be deemed to be the employer. The premiums or subscription  charges  may
be  derived  from  funds  contributed  entirely by insured employees and

retired employees or by insured employees and retired employees and  the
employer  jointly  or  entirely  by  the  employer.  If  the premiums or
subscription charges are derived from funds contributed  wholly  by  the
employer,  all  eligible  employees are to be covered. If all or part of
the premiums or subscription  charges  are  to  be  derived  from  funds
contributed  by  insured  employees  and if the opportunity to take such
insurance is offered to all eligible employees of an employer, then such
policy must cover not less than forty percent  of  such  employees,  the
calculation  being  with  respect  to  each  employer  individually. The
amounts of insurance may be based upon a plan which  permits  a  limited
number  of selections by the employees if the selections offered utilize
a consistent pattern of grading the amounts of insurance for  individual
group members so that the resulting pattern of coverage is reasonable.
(10) A policy issued to an association, or to a trustee or trustees of
a  fund established, created or maintained for the benefit of members of
one or more associations, all of whose eligible members  have  the  same
profession,  trade or occupation, which association or associations have
been organized and maintained in good  faith  for  purposes  principally
other than that of obtaining insurance and have been in active existence
for at least two years. The policy shall insure members, or employees of
members,  of such association or associations, and except as provided in
paragraph five of subsection (a) of section three thousand  two  hundred
twenty  of  this  chapter,  such policy shall provide for the payment of
benefits to the person insured  or  some  beneficiary  or  beneficiaries
other  than  employers  and  the  association  or  associations,  or any
officials, representatives, trustees or agents thereof and shall provide
for the issuance of  a  certificate  to  the  persons  insured  or  such
beneficiary  as  evidence  of  such  insurance. The members or employees
eligible for the insurance under the policy shall be all the members who
have not attained any limiting age specified in the policy, or all  such
members  and  their  employees,  or  all of any class or classes thereof
determined  by  conditions  pertaining  to  their   employment   or   to
association membership or both. The premium for the policy shall be paid
by  the association or trustee or trustees either from funds contributed
by the  association  or  by  the  insured  individuals,  or  from  funds
contributed   jointly   by   the  association  and  insured  individuals
specifically for their insurance. A policy on which all or part  of  the
premium  is  to  be  derived  from  funds  contributed  by  the  insured
individuals specifically for their insurance must insure at least  fifty
percent  of  the  then  eligible individuals or a minimum of two hundred
individuals, whichever is less, excluding any as  to  whom  evidence  of
individual  insurability is not satisfactory to the insurer. A policy on
which no part of the premium is to be derived from funds contributed  by
the insured individuals specifically for their insurance must insure all
eligible  individuals,  excluding  any as to whom evidence of individual
insurability is not satisfactory to the insurer. The policy must  insure
at  least  one  hundred  individuals  at  date  of issue. The amounts of
insurance on employees or members insured  under  the  policy  shall  be
based  upon  some  plan precluding individual selection. However, such a
plan may permit a limited number of selections by employees  or  members
if  the  selections  offered utilize a consistent pattern of grading the
amounts of insurance for individual group members so that the  resulting
pattern of coverage is reasonable. If a policy dividend is declared or a
reduction  in  rate  is made under such a policy, the excess, if any, of
the aggregate dividends or rate reductions under  the  policy  over  the
aggregate   expenditure  for  insurance  under  such  policy  made  from
association or employer funds, including expenditures made in connection

with administration of such policy, shall be applied by the policyholder
for the sole benefit of the insured individuals.
(11)  A policy, covering persons employed pursuant to 32 U.S.C. § 709,
members  of  the  national  guard  on  full-time  training  duty   under
provisions  of  such  title  32,  or  on  active duty or active duty for
training under provisions of title 10 of the United States  Code,  under
the full-time manning program, issued to the adjutant general, who shall
be  deemed  the  policyholder,  or  to  a  trustee or trustees of a fund
established, created, or maintained for the benefit of such  individuals
insured, which trustee or trustees shall be deemed the policyholder, the
premium  of  which  is  to  be  paid  by  the individuals insured either
directly or by deduction from wages or salary. The policy must insure at
least fifty percent or four hundred of the individuals eligible for such
insurance, whichever is less. Such policy shall provide for the  payment
of  benefits  to  the  individual  insured  or  to  some  beneficiary or
beneficiaries other than to the aforesaid trustee  or  trustees  or  the
adjutant  general.  The  policy shall also provide for the issuance of a
certificate to the policyholder for delivery to the  individual  insured
or  to  such  beneficiary, as evidence of such insurance. The amounts of
insurance may be based upon a plan which permits  a  limited  number  of
selections  by  the  members  provided  the selections offered utilize a
consistent pattern of grading the amounts of  insurance  for  individual
group members so that the resulting pattern of coverage is reasonable.
(12)  A policy issued to an association, or the trustee or trustees of
a trust established, or participated in, by one or more associations, to
insure association members subject to the following:
(A) Each association shall have (i) A minimum of two  hundred  insured
members at the policy's date of issue;
(ii)  Been  organized  and  maintained  in  good  faith  for  purposes
principally other than that of obtaining insurance;
(iii) Been in active existence for at least two years; and
(iv) A constitution and by-laws which provide that:
(I) The association holds regular meetings not less than  annually  to
further purposes of the association;
(II)  The  association  collects  dues  or solicits contributions from
members; and
(III) The members have voting privileges  and  representation  on  the
governing board and committees.
(B)  The  premium  for  the policy shall be paid by the association or
trustees either wholly from funds contributed by the association  or  by
the  insured  individuals,  or  from  funds  contributed  jointly by the
association and insured individuals. A policy on which no  part  of  the
premium  is  to  be  derived  from  funds  contributed  by  the  insured
individuals specifically for their insurance must  insure  all  eligible
individuals excluding any as to whom evidence of individual insurability
is not satisfactory to the insurer.
(C) The amounts of insurance under the policy shall be based upon some
plan precluding individual selection either by the insured persons or by
an  association.  However, such a plan may permit a number of selections
by the association, if  the  selections  offered  utilize  a  consistent
pattern  of  grading  the  amounts  of  insurance  so that the resulting
pattern of coverage is reasonable. Furthermore, such plan may  permit  a
limited  number  of  selections  by  members  if  the selections offered
utilize a consistent pattern of grading the  amounts  of  insurance  for
individual  group  members  so that the resulting pattern of coverage is
reasonable.
(D) Except as provided in paragraph five of subsection (a) of  section
three  thousand  two  hundred  twenty of this chapter, such policy shall

provide for the payment of benefits to the person  insured  or  to  some
beneficiary   or  beneficiaries,  other  than  the  association  or  any
officials, representatives, trustees or agents thereof and shall provide
for  the  issuance  of  a  certificate  to  the  persons insured or such
beneficiary, as evidence of such insurance.
(E) The premiums  charged  must  be  reasonable  in  relation  to  the
benefits provided.
(13)  A  policy issued to any organization, or the trustee or trustees
of a trust established, or participated in,  by  one  or  more  of  such
organizations to insure certain persons subject to the following:
(A) The organization must be:
(i)  A bank, retailer or other issuer of a credit card, charge card or
payment card which can be used to buy goods or services, and the  policy
must insure holders of that card;
(ii)  A bank, savings and loan association, credit union, mutual fund,
money market fund, stockbroker or other  similar  financial  institution
regulated  by  state  or  federal  law,  and  the policy must insure the
depositors, account holders or members of that institution.
(B) Except for a credit union where the premium shall be paid entirely
from  funds  contributed  by  the  credit  union,  the  organization  or
organizations shall have a minimum of two hundred insured persons at the
policy's date of issue.
(C)  The  premium  for the policy shall be paid by the organization or
trustees either wholly from funds contributed by the organization or  by
the  insured  individuals,  or  from  funds  contributed  jointly by the
organization and insured individuals. A policy on which no part  of  the
premium  is  to  be  derived  from  funds  contributed  by  the  insured
individuals specifically for their insurance  must  cover  all  eligible
individuals excluding any as to whom evidence of individual insurability
is not satisfactory to the insurer.
(D) The amounts of insurance under the policy shall be based upon some
plan precluding individual selection either by the insured persons or by
the  organization.  However, such plan may permit a number of selections
by the organization if  the  selections  offered  utilize  a  consistent
pattern  of  grading  the  amounts  of  insurance  so that the resulting
pattern of coverage is reasonable. Furthermore, such a plan may permit a
limited number of  selections  by  members  if  the  selections  offered
utilize  a  consistent  pattern  of grading the amounts of insurance for
individual group members so that the resulting pattern  of  coverage  is
reasonable.
(E)  Except as provided in paragraph five of subsection (a) of section
three thousand two hundred twenty of this  chapter,  such  policy  shall
provide  for  the  payment of benefits to the persons insured or to some
beneficiary  or  beneficiaries  other  than  the  organization,  or  any
official, representatives, trustees or agents thereof, and shall provide
for  the  issuance  of  a  certificate  to  the  persons insured or such
beneficiary, as evidence of such insurance.
(F) The premiums  charged  must  be  reasonable  in  relation  to  the
benefits provided.
(14)  A  policy  issued  to  insure  any  other  group approved by the
superintendent upon a finding that:
(A) There is a common enterprise or economic  or  social  affinity  or
relationship;
(B)  The  premiums  charged are reasonable in relation to the benefits
provided; and
(C)  The  issuance  of  the  policy  would  result  in  economies   of
acquisition or administration, would be actuarially sound, and would not
be contrary to the best interest of the public. The superintendent shall

promulgate  regulations  setting  forth  any  such groups that have been
accepted as qualifying pursuant to this paragraph.
(c)  (1) No domestic, foreign or alien life insurance company shall be
permitted to do business in this state if it hereafter issues, within or
without this state, any policy of group  life  insurance  which  on  its
issuance does not appear to be self-supporting on reasonable assumptions
as to interest, mortality and expense.
(2)  Anything  in  this  chapter  to the contrary notwithstanding, any
group life insurance policy  issued  or  delivered  in  this  state  may
provide  for readjustment of the rate of premium based on the experience
thereunder, at the end of the first year or of any  subsequent  year  of
insurance thereunder, and such readjustment may be made retroactive only
for  such policy year. Any such rate readjustment shall be computed on a
basis which is equitable to all group life insurance policies.
(d) In the event a group life insurance policy  hereafter  issued  for
delivery  in  this  state  permits  a  certificate  holder to convert to
another type of  life  insurance  within  a  specified  time  after  the
happening of an event, such certificate holder shall be notified of such
privilege  and  its  duration  within  fifteen  days before or after the
happening of the event, provided that if such notice be given more  than
fifteen  days,  but  less  than  ninety days after the happening of such
event, the time allowed for the exercise of such privilege of conversion
shall be extended for forty-five days after the giving of  such  notice.
If  such  notice  be not given within ninety days after the happening of
the event,  the  time  allowed  for  the  exercise  of  such  conversion
privilege shall expire at the end of such ninety days. Written notice by
the  policyholder  given  to  the  certificate  holder  or mailed to the
certificate holder at his last known address, or written notice  by  the
insurer  mailed  to the certificate holder at the last address furnished
to the insurer by the policyholder, shall be deemed full compliance with
the provisions of this subsection for the giving of notice.
(e) Each domestic insurer and each  foreign  or  alien  insurer  doing
business  in  this state shall file with the superintendent its schedule
of rates of commissions, compensation and other fees  or  allowances  to
agents  and brokers pertaining to the solicitation or sale of group life
insurance and of fees or allowances, exclusive  of  amounts  payable  to
persons  who  are  in  the  regular  employ of the insurer other than as
agent, to any individuals,  firms  or  corporations  pertaining  to  the
service  or  administration  of group life insurance, whether transacted
within or without this state. An insurer may revise such schedules  from
time   to   time,  and  shall  file  such  revised  schedules  with  the
superintendent. No insurer shall pay to  an  agent,  agents,  broker  or
brokers  or any combination of licensees for the solicitation or sale of
a policy of group life insurance or for any  other  purpose  related  to
such  group  insurance  any  commission,  compensation  or other fees or
allowances in excess of that determined on the basis of the schedules of
such insurer as then on file with the  superintendent;  nor  shall  such
insurer  pay  for  services  pertaining to the service or administration
thereof to any individual, firm or corporation any fees, commissions  or
allowances in excess of that determined on the basis of the schedules of
such  insurer  as  then  on  file  with  the  superintendent or for such
services except  such  as  are  rendered  in  behalf  of  such  insurer,
provided, however, nothing contained herein shall apply to or affect the
computation of dividends or experience rating credits.
(f)  Any policy of group life insurance may include provisions for the
payment by the insurer of life insurance benefits upon the death of  the
spouse  of  the insured employee or member or his or her child dependent
upon him or  her  for  support  and  maintenance  or  any  other  person

dependent  upon  the insured employee or member, provided that insurance
upon the life of the spouse or other person shall not exceed the  amount
of insurance for which the employee or member is eligible, nor shall the
insurance  upon  the  life  of  each  dependent  child so insured exceed
twenty-five thousand dollars. A policy of insurance issued in accordance
with paragraph three of subsection (b) of this  section,  while  it  may
provide  coverage  for  a  spouse  of the insured employee or member, it
shall not, however, provide  coverage  for  a  dependent  child  of  the
insured  employee  or  member. An insurer providing group life insurance
for  a  spouse  or  dependent  children  shall   require   evidence   of
insurability   sufficient   to   protect   against  substantial  adverse
selection.
(g) An insurer authorized or licensed to do business in this state may
solicit or make available credit life insurance coverage in  this  state
as  provided  for  in  paragraph three of subsection (b) of this section
under a policy of group life insurance only if the policy  is  delivered
to  policyholders  described  in  and  conforming  to  the definition in
paragraph three of subsection (b) of this section, and with  respect  to
all  credit  transactions  entered  into in this state, the policy fully
complies with the requirements of paragraph twelve of subsection (a)  of
section three thousand two hundred twenty of this chapter.
(h)(1)  Any  dividend hereafter apportioned on any participating group
insurance policy, or any rate reduction hereafter made or  continued  on
any  non-participating group policy for the first or any subsequent year
of insurance under any such policy heretofore or hereafter issued  under
paragraph  twelve,  thirteen  or  fourteen  of  subsection  (b)  of this
section, may be applied to reduce the policyholder's part of the cost of
such policy, except that the excess, if any, of the insured's  aggregate
contribution  under  the  policy  over  the net cost (gross premium less
dividends or rate reductions) of the insurance shall be applied  at  the
discretion  of the insurer either as a cash payment to the insured or to
reduce the insured's premium, unless the insured assigns the dividend or
rate reduction to the policyholder. If a dividend or rate  reduction  is
payable  upon  termination  of  the policy the insurer shall either make
payment to the  insured  or  to  the  policyholder  upon  receipt  of  a
certification  from the policyholder that the dividend or rate reduction
will be distributed by the policyholder to the insureds  or  applied  to
reduce the insured's premium.
(2)  The provisions of paragraph one of this subsection shall apply to
New  York  residents  insured  under  a  policy  issued  in  any   other
jurisdiction to a group which is not of the type described in paragraphs
one through eleven of subsection (b) of this section.
(i) (1) The provisions of subsections (d), (f) and (h) of this section
shall not apply to policies issued under the authority of subsection (d)
of  section  three  thousand  two hundred five of this chapter, provided
such  policies  are  issued  in  compliance  with  the  requirements  of
subsection  (d) and subsection (e) of section three thousand two hundred
five of this chapter.
(2) Any life insurance company authorized to do business in this state
may deliver in this state policies  of  group  insurance  issued  to  an
employer  or  to  the  trustee  of  a  fund  established  by one or more
employers, or one or more employers and one or more labor unions without
complying with the provisions of paragraphs one and four  of  subsection
(b)  of this section where group insurance is issued under the authority
of subsection (d) or subparagraph (B) of paragraph (1) of subsection (a)
of section three thousand two hundred five  of  this  chapter,  provided
that,  prior to or at the commencement of coverage on any person under a
policy issued under the authority of such subparagraph:
(A) the employer providing such insurance  coverage  or  causing  such
coverage  to  be issued notifies the prospective insured in writing: (i)
of the intent to insure the employee's life, specifying in  such  notice
the  maximum  face amount for which the employee could be insured at the
time  the contract is issued; and (ii) that the employer or policyholder
will be a beneficiary of any proceeds payable  upon  the  death  of  the
employee; and
(B)  the  prospective  insured  employee  consents  in writing to such
coverage.