N.Y. Insurance Law § 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.