2023 New York Laws › ISC - Insurance › Article 32 - Insurance Contracts - Life, Accident and Health, Annuities › 3220 - Group Life Insurance Policies; Standard Provisions.

§  3220.  Group  life  insurance policies; standard provisions. (a) No
policy of group life insurance shall be delivered or issued for delivery
in this state unless it contains in substance the  following  provisions
or  provisions  which  in  the  opinion  of  the superintendent are more
favorable to certificate holders or not less  favorable  to  certificate
holders and more favorable to policyholders:
(1)  That the policy is incontestable after two years from its date of
issue, except for nonpayment of premiums by the policyholder;  and  that
no statement made by any person insured under the policy relating to his
insurability  shall  be used in contesting the validity of the insurance
with respect to which such statement was made after such  insurance  has
been in force prior to the contest for a period of two years during such
person's  lifetime  and in no event unless it is in a written instrument
signed by him, a copy of which is or has been furnished to  such  person
or to his beneficiary.
(2)  That  the  rights  of  the  policyholder  or  of  any  insured or
beneficiary thereunder shall not be affected by any provision other than
one contained in the policy or the riders or endorsements thereon or  in
the amendments thereto signed by the policyholder and the insurer, or in
the  copy of the policyholder's application attached to the policy or in
the individual statements, if any, submitted in connection therewith.
(3) For the equitable adjustment of the premium or if  the  amount  of
insurance  depends  upon  the  age  of  the  insured,  for the equitable
adjustment of the amount of insurance and the premium in the event of  a
misstatement of the age of the person insured.
(4)  That  the  insurer will issue to the policyholder for delivery to
the person whose  life  is  insured  under  such  policy  a  certificate
containing  a  statement  of  the  insurance  protection  to which he is
entitled including any changes in such protection depending on  the  age
of  the  person  whose  life  is  insured  and the rights to which he is
entitled in accordance with paragraphs six and seven hereof.
(5) That the benefits payable under any such policy shall  be  payable
to  the  beneficiary  or beneficiaries designated by the insured except,
where the policy contains conditions pertaining to  family  status,  the
beneficiary  may be the family member specified by the policy terms, but
if there is no such designated or specified beneficiary as to all or any
part of the insurance payable at the death  of  the  insured,  then  the
amount  of insurance so payable for which there is no such designated or
specified beneficiary shall be payable to the  estate  of  the  insured,
except that the policy may provide that the insurer may in such case, at
its  option,  pay  such  insurance  to  any one or more of the following
surviving relatives: wife, husband, mother, father, child  or  children,
brothers  or  sisters;  and  except that the policy may provide that the
insurer may, in any case, deduct from the aggregate  sum  payable  under
such  policy  on  account  of the death of the insured, an amount not to
exceed five hundred  dollars  to  be  paid  to  any  person  or  persons
appearing  to  the insurer to be equitably entitled to same by reason of
having incurred expenses on behalf of the insured  or  for  his  or  her
burial. Payment in accordance with any of the foregoing provisions shall
completely  discharge the insurer's liability with respect to the amount
of insurance so paid.
(6) That if the insurance on an employee or member covered  under  the
policy,  other  than  one  issued  in accordance with paragraph three or
eight of subsection (b) of section four thousand two hundred sixteen  of
this  chapter, (A) ceases because of termination of (i) employment or of
membership in the class or  classes  eligible  for  coverage  under  the
policy,  or  (ii)  the  policy,  or  (B) is reduced (i) in the case of a
policy covering an employee or union member under a plan arranged by the

insured person's employer or union, on or after the employee's or  union
member's  attainment  of  age  sixty  in  any  increment  or  series  of
increments aggregating twenty percent or more of the amount of  coverage
in  force before the first reduction on account of such age, (ii) in the
case of a policy covering any member other than as described in item (i)
of this subparagraph, at the time of the first reduction  of  insurance,
(iii)  due  to change in class or (iv) due to an amendment of the policy
to take effect immediately or at any subsequent date, such  employee  or
such  member  shall  be  entitled  to have issued to him by the insurer,
without evidence of insurability, upon application made to  the  insurer
within  thirty-one days after such termination or reduction of insurance
and payment of the premium applicable to the class of risk to  which  he
belongs  and  to  the form and amount of the policy at his then attained
age, a  policy  of  life  insurance  only,  in  any  one  of  the  forms
customarily  issued by such insurer, except term insurance, in an amount
equal to the amount of his protection under such group insurance  policy
at  the  time  of such termination or reduction, less any amount of life
insurance remaining in force, except however, in the case of a reduction
in accordance with item (ii) of subparagraph (B) of this  paragraph,  in
an  amount  equal to eighty percent of his insurance coverage under such
group policy immediately prior to such reduction. Under a  group  policy
issued  pursuant to paragraph twelve, thirteen or fourteen of subsection
(b) of section four thousand two hundred sixteen  of  this  chapter,  an
insured  shall  be  entitled  to  convert,  just as if he had terminated
membership in  the  class  or  classes  eligible  for  coverage,  within
thirty-one days after notice from the insurer that, in order to continue
his  coverage  under  the group policy, he must contribute more than one
hundred thirty-three percent of the net premiums computed  according  to
the  Commissioners  1960 Standard Group Mortality Table at three percent
interest.  The  group  policy  may  contain  a  provision  that  if  the
policyholder  or  insurer shall terminate the policy, the amount of life
insurance that may be converted shall in no event exceed the  amount  of
such employee's or member's life insurance protection less any amount of
life  insurance  for  which  he  may be or may become eligible under any
group policy issued or reinstated by the same or another insurer  within
forty-five days after the date of such cessation. However, at the option
of  such  employee or member, he shall be entitled to have issued to him
in accordance with the conditions prescribed above,  a  policy  of  life
insurance only, in any one of such forms, preceded by term insurance for
a  period  of  one  year  with the premium payable, at the option of the
employee or member, in any mode customarily offered by the  insurer.  In
addition,  the  group  policy  shall  contain  a  provision  that if the
coverage of an employee or  member  ceases  because  of  termination  of
employment  due  to  the  employee's  total  and permanent disability or
termination of membership  due  to  the  member's  total  and  permanent
disability,  the  employee  or member, at the option of such employee or
member, shall be entitled to have  issued  to  him,  a  policy  of  life
insurance only, in any one of such forms, preceded by term insurance for
a  period  of  one  year  with the premium payable, at the option of the
employee or member, in any mode customarily offered by the  insurer,  in
the  amount  of such employee's or member's life insurance protection in
effect immediately before termination,  less  the  amount  of  any  life
insurance  which  is  replaced  with  the same or another insurer within
forty-five days after cessation of the group life insurance  protection.
Each  such  group policy shall contain a further provision to the effect
that upon  the  death  of  any  such  employee  or  member  during  such
thirty-one  day  period and before any such individual policy has become
effective, the amount of insurance for which such employee or member was

entitled to make application shall be payable as a death benefit by  the
insurer;  provided,  however,  each  such policy may contain a provision
obligating the policyholder to pay a premium to the insurer for coverage
extended during such thirty-one day period in the event the extension of
coverage  is a direct result of the policyholder's voluntary termination
of the policy and the policyholder replaces coverage  under  the  policy
within  six  months  of  its termination either with the insurer or with
another insurer. The individual conversion policy may provide  that  any
statement  made by the person insured under the group policy relating to
his insurability under such group policy may be used in  contesting  the
validity  of the insurance under the individual conversion policy to the
same extent that such statement could have been used in  contesting  the
validity  of his insurance under the group policy if his insurance under
the group policy had not ceased. An individual conversion  policy  shall
not exclude or restrict liability in the event of suicide of the insured
after  two years from the date that the insured became covered under the
group policy. Notwithstanding  the  foregoing,  the  superintendent  may
require  conversion or continuation of insurance under conditions as set
forth in a regulation for insureds under a policy issued  in  accordance
with  paragraph  three  of  subsection  (b) of section four thousand two
hundred sixteen of this chapter.
(7) At the option of the employee or member, any converted  policy  or
policies   shall  provide  coverage  for  the  dependents  or  class  of
dependents of such employee or member who were insured under  the  group
policy.  The effective date of the converted policy or policies shall be
the date of termination of the employee's or  member's  insurance  under
the  group  policy. The conversion privilege shall be available (A) upon
termination or reduction of insurance as described in paragraph  six  of
this  subsection,  (B)  upon  the death of the employee or member to the
surviving spouse with respect to such spouse and children  as  are  then
insured  by  the  group  policy,  (C)  to a child upon his attaining the
limiting age of coverage under the  group  policy  while  insured  as  a
dependent  thereunder,  and  (D)  upon  the  divorce or annulment of the
marriage of the employee or member to the spouse  or  former  spouse  of
such employee or member.
(8)  That  in  the  event  a  group  life  insurance policy 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 paragraph for the giving of notice.
(9)  That  all new employees of the employer or all new members of the
labor union or other association or group as defined in this chapter, or
all new debtors of the vendor or creditor, as the case may  be,  in  the
groups  or  classes  eligible  for  such insurance must be added to such
groups or classes for which they are respectively eligible.
(10) In the case of a policy covering members of  a  labor  union,  or
other  association  or  group  as  defined in this chapter (other than a
group as defined in paragraph one or three of subsection (b) of  section
four  thousand  two  hundred  sixteen  of this chapter, a notice in such
policy  to the effect that the premium for the renewable term as therein
provided depends upon the attained ages of the members in the group  and
increases with advancing ages.
(11) If the policy is in whole or in part on a plan of insurance other
than  the  term  plan,  it  shall  contain  a nonforfeiture provision or
provisions which  in  the  opinion  of  the  superintendent  is  or  are
equitable  to  the  insured  persons  and  to the policyholder, but this
paragraph  does  not  require  that  such  policy   contain   the   same
nonforfeiture   provisions   required   for  individual  life  insurance
policies.
(12) In every group plan issued in accordance with paragraph three  of
subsection  (b)  of  section  four  thousand two hundred sixteen of this
chapter insuring loans made by production credit associations  organized
pursuant  to an Act of Congress of the United States, entitled the "Farm
Credit  Act  of  1933",  approved  June  sixteenth,   nineteen   hundred
thirty-three as amended, or insuring 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 purpose of such business and other requirements of the
borrower,  a  provision  that,  upon renewal of the loan commitment each
year prior to the attainment of age  fifty  by  the  certificate-holder,
coverage  may  be  renewed  by the certificate-holder without additional
requirements each year in an amount equal to the loan commitment or  the
previous  year's  coverage,  whichever is less, unless coverage has been
previously terminated by action of the certificate-holder,  and  further
provided  that  the group policy is in full force and effect on the date
of renewal.
(b) None of the provisions of subsection  (a)  hereof  relating  to  a
certificate issued under any group life insurance policy shall be deemed
applicable  to  any such policy which is issued to a vendor or creditor,
as defined in section four thousand two hundred sixteen of this  chapter
and  under the provisions of which no individual certificates are issued
or are issuable.
(c) (1) Notwithstanding any provision of law, a person whose  life  is
insured  under  any  policy of group life insurance, whether or not such
policy is otherwise subject to this section, is  permitted  to  make  an
assignment  of  all  or  any  part of his incidents of ownership in such
insurance, including, without  limitation,  any  right  to  designate  a
beneficiary  or  beneficiaries  thereunder  and  any  right  to  have an
individual policy issued upon termination either  of  employment  or  of
said  policy  of group life insurance, provided that the insurer and the
group  policyholder  may  prohibit  or  restrict  such   assignment   by
appropriate  policy provisions except as otherwise provided in paragraph
three of this subsection.
(2) Paragraph one of this subsection shall be construed  as  declaring
the law as it existed prior to its enactment and not as modifying it.
(3)  A  group  policy  that  permits assignment of an insured person's
rights by gift shall also allow assignment for value to the same  extent
that it allows assignment by gift.
(d)  The  provisions of paragraphs four, five, six, seven, eight, nine
and ten  of  subsection  (a)  of  this  section  and  paragraph  one  of
subsection  (c) of this section shall not apply to policies 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
article.