1-1 By: Madden (Senate Sponsor - Haywood) H.B. No. 885
1-2 (In the Senate - Received from the House May 1, 1995;
1-3 May 2, 1995, read first time and referred to Committee on Economic
1-4 Development; May 23, 1995, reported favorably by the following
1-5 vote: Yeas 10, Nays 0; May 23, 1995, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the amount of insurance coverage allowed under group
1-9 life insurance policies.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 1, Article 3.50, Insurance Code, is
1-12 amended to read as follows:
1-13 Sec. 1. DEFINITIONS. No policy of group life insurance
1-14 shall be delivered in this state unless it conforms to one of the
1-15 following descriptions:
1-16 (1) A policy issued to an employer, or to the trustees
1-17 of a fund established by an employer, which employer or trustees
1-18 shall be deemed the policyholder, to insure employees of the
1-19 employer for the benefit of persons other than the employer,
1-20 subject to the following requirements:
1-21 (a) The employees eligible for insurance under
1-22 the policy shall be all of the employees of the employer, or all of
1-23 any class or classes thereof determined by conditions pertaining to
1-24 their employment. The policy may provide that the term "employees"
1-25 shall include the employees of one or more subsidiary corporations,
1-26 and the employees, individual proprietors, and partners of one or
1-27 more affiliated corporations, proprietors or partnerships if the
1-28 business of the employer and of such affiliated corporations,
1-29 proprietors or partnerships is under common control through stock
1-30 ownership, contract, or otherwise. The policy may provide that the
1-31 term "employees" shall include the individual proprietor or
1-32 partners if the employer is an individual proprietor or a
1-33 partnership. The policy may provide that the term "employees"
1-34 shall include retired employees.
1-35 (b) The premium for the policy shall be paid by
1-36 the policyholder, either wholly from the employer's fund or funds
1-37 contributed by him, or partly from such funds and partly from funds
1-38 contributed by the insured employees. No policy may be issued on
1-39 which the entire premium is to be derived from funds contributed by
1-40 the insured employees. A policy on which part of the premium is to
1-41 be derived from funds contributed by the insured employees may be
1-42 placed in force only if at least seventy-five percent (75%) of the
1-43 then eligible employees, excluding any as to whom evidence of
1-44 individual insurability is not satisfactory to the insurer, elect
1-45 to make the required contributions. A policy on which no part of
1-46 the premium is to be derived from funds contributed by the insured
1-47 employees must insure all eligible employees, or all except any as
1-48 to whom evidence of individual insurability is not satisfactory to
1-49 the insurer.
1-50 (c) The policy must cover at least ten (10)
1-51 employees at date of issue.
1-52 (d) The amounts of insurance under the policy
1-53 must be based upon some plan precluding individual selection either
1-54 by the employees or by the employer or trustees. No policy may be
1-55 issued which provides insurance on any employee which together with
1-56 any other insurance under any group life insurance policies issued
1-57 to the employer or to the trustees of a fund established by the
1-58 employer exceeds Two <One> Hundred Fifty Thousand Dollars
1-59 ($250,000.00) <($100,000.00)>, unless seven <four> hundred percent
1-60 <(400%)> of the annual compensation of such employee from his
1-61 employer or employers exceeds Two <One> Hundred Fifty Thousand
1-62 Dollars ($250,000.00) <($100,000.00)>, in which event all such term
1-63 insurance shall not exceed seven <four> hundred percent <(400%)> of
1-64 such annual compensation, except that this limitation shall not
1-65 apply to group insurance on other than the term plan where such
1-66 insurance is to be used to fund the benefits under a pension or
1-67 profit sharing plan and the amount of such insurance does not
1-68 exceed that required to provide at normal retirement date the
2-1 pension specified by the plan, and except that a group policy which
2-2 is issued by the same or another carrier to replace another group
2-3 policy may provide term insurance not to exceed the amounts
2-4 provided by the policy which it replaces, or the amounts provided
2-5 above, whichever are greater.
2-6 (2) A policy issued to a labor union, which shall be
2-7 deemed the employer and policyholder, to insure the members of such
2-8 union who are actively engaged in the same occupation and who shall
2-9 be deemed to be the employees of such union within the meaning of
2-10 this Article.
2-11 (3) A policy issued to any association of employees of
2-12 the United States Government or any subdivision thereof, provided
2-13 the majority of the members of such association are residents of
2-14 this state, an association of public employees, an incorporated
2-15 city, town or village, an independent school district, common
2-16 school district, state colleges or universities, any association of
2-17 state employees, any association of state, county and city, town or
2-18 village employees, and any association of any combination of state,
2-19 county or city, town or village employees and any department of the
2-20 state government which employer or association shall be deemed the
2-21 policyholder to insure the employees of any such incorporated city,
2-22 town or village, of any such independent school district, of any
2-23 common school district, of any such state college or university, of
2-24 any such department of the state government, members of any
2-25 association of state, county or city, town or village or of the
2-26 United States Government or any subdivision thereof, provided the
2-27 majority of such employees reside in this state, employees for the
2-28 benefit of persons other than the policyholder subject to the
2-29 following requirements:
2-30 (a) The persons eligible for insurance under the
2-31 policy shall be all of the employees of the employer or if the
2-32 policyholder is an association, all of the members of the
2-33 association.
2-34 (b) The premium for a policy issued to any
2-35 policyholder authorized to be such policyholder under Subsection
2-36 (3) of Section 1, Article 3.50, Texas Insurance Code, may be paid
2-37 in whole or in part from funds contributed by the employer, or in
2-38 whole or in part from funds contributed by the persons insured
2-39 under said policy; or in whole or in part from funds contributed by
2-40 the insured employees who are members of such association of
2-41 employees; provided, however, that any monies or credits received
2-42 by or allowed to the policyholder pursuant to any participation
2-43 agreement contained in or issued in connection with the policy
2-44 shall be applied to the payment of future premiums and to the pro
2-45 rata abatement of the insured employees' contribution therefor; and
2-46 provided further, that the employer may deduct from the employees'
2-47 salaries the employees' contributions for the premiums when
2-48 authorized in writing by the respective employees so to do. Such
2-49 policy may be placed in force only if at least 75% of the eligible
2-50 employees or if an association of employees is the policyholder,
2-51 75% of the eligible members of said association, excluding any as
2-52 to whom evidence of individual insurability is not satisfactory to
2-53 the insurer, elect to make the required premium contributions and
2-54 become insured thereunder. Any group policies heretofore issued
2-55 to any of the groups named in Section 1(3) above and in existence
2-56 on the effective date of this Act shall continue in force even
2-57 though the number of employees or members insured thereunder is
2-58 less than 75% of the eligible employees or members on the effective
2-59 date of this Act.
2-60 (c) The policy must cover at least ten (10)
2-61 employees at date of issue, or if an association of employees is
2-62 the policyholder, ten (10) members of said association at date of
2-63 issue.
2-64 (d) The term employees as used herein in
2-65 addition to its usual meaning shall include elective and appointive
2-66 officials of the state.
2-67 (4) A policy issued to a creditor, who shall be deemed
2-68 the policyholder, to insure debtors of the creditor, subject to the
2-69 following requirements:
2-70 (a) The debtors eligible for insurance under the
3-1 policy shall all be members of a group of persons numbering not
3-2 less than fifty (50) at all times, who become borrowers, or
3-3 purchasers of securities, merchandise or other property, under
3-4 agreement to repay the sum borrowed or to pay the balance of the
3-5 price of the securities, merchandise or other property purchased,
3-6 to the extent of their respective indebtedness, but not to exceed
3-7 Fifty Thousand Dollars ($50,000.00) on any one life or not to
3-8 exceed One Hundred Twenty-Five Thousand Dollars ($125,000.00) on
3-9 any one life if the indebtedness is secured by a first lien on real
3-10 estate; provided, however, the face amount of any loan or loan
3-11 commitment, totally or partially executed, made to a debtor for
3-12 educational purposes or to a debtor with seasonal income by a
3-13 creditor in good faith for general agricultural or horticultural
3-14 purposes, secured or unsecured, where the debtor becomes personally
3-15 liable for the payment of such loan, may be so insured in an
3-16 initial amount of such insurance not to exceed the total amount
3-17 repayable under the contract of indebtedness and, when such
3-18 indebtedness is repayable in substantially equal installments, the
3-19 amount of insurance shall at no time exceed the scheduled or actual
3-20 amount of unpaid indebtedness, whichever is greater, and such
3-21 insurance on such credit commitments not exceeding one year in
3-22 duration may be written up to the amount of the loan commitment on
3-23 a nondecreasing or level term plan, but such insurance shall not
3-24 exceed One Hundred Thousand Dollars ($100,000.00) on any one life.
3-25 (b) The premium for the policy shall be paid by
3-26 the policyholder, either from the creditor's funds or from charges
3-27 collected from the insured debtors, or both.
3-28 (c) The insurance issued shall not include
3-29 annuities or endowment insurance.
3-30 (d) The insurance shall be payable to the
3-31 policyholder. Such payment shall reduce or extinguish the unpaid
3-32 indebtedness of the debtor to the extent of such payment; provided
3-33 that in the case of a debtor for educational purposes or of a
3-34 debtor with seasonal income, under a loan or loan commitment for
3-35 general agricultural or horticultural purposes of the type
3-36 described in paragraph (a), the insurance in excess of the
3-37 indebtedness to the creditor, if any, shall be payable to the
3-38 estate of the debtor or under the provision of a facility of
3-39 payment clause.
3-40 (5) A policy issued to the trustees of a fund
3-41 established by two or more employers in the same industry or by one
3-42 or more labor unions, or to the trustees of a fund established by
3-43 one or more employers in the same industry and one or more labor
3-44 unions, or by one or more employers and one or more labor unions
3-45 whose members are in the same or related occupations or trades,
3-46 which trustees shall be deemed the policyholder, to insure
3-47 employees of the employers or members of the unions for the benefit
3-48 of persons other than the employers or the union, subject to the
3-49 following requirements:
3-50 (a) The persons eligible for insurance shall be
3-51 all of the employees of the employers and the employees of the
3-52 trade association of such employers or all of the members of the
3-53 union, or all of any class or classes thereof determined by
3-54 conditions pertaining to their employment, or to membership in the
3-55 unions, or both. The policy may provide that the term "employees"
3-56 shall include retired employees, and the individual proprietor or
3-57 partners if an employer is an individual proprietor or a
3-58 partnership. No director of a corporate employer shall be eligible
3-59 for insurance under the policy unless such person is otherwise
3-60 eligible as a bona fide employee of the corporation by performing
3-61 services other than the usual duties of a director. No individual
3-62 proprietor or partner shall be eligible for insurance under the
3-63 policy unless he is actively engaged in and devotes a substantial
3-64 part of his time to the conduct of the business of the proprietor
3-65 or partnership. The policy may provide that the term "employees"
3-66 shall include the trustees or their employees, or both, if their
3-67 duties are principally connected with such trusteeship.
3-68 (b) The premium for the policy shall be paid by
3-69 the trustees wholly from funds contributed by the employer or
3-70 employers of the insured persons, or by the union or unions, or by
4-1 both, or, partly from such funds and partly from funds contributed
4-2 by the insured persons, except that in no event shall the
4-3 contribution by an insured person toward the cost of his insurance
4-4 exceed forty cents per thousand per month. A policy on which part
4-5 of the premium is to be derived from funds contributed by the
4-6 insured persons specifically for their insurance may be placed in
4-7 force only if at least seventy-five percent (75%) of the then
4-8 eligible persons of each participating employer unit, excluding any
4-9 as to whom evidence of insurability is not satisfactory to the
4-10 insurer, elect to make the required contributions. A policy on
4-11 which no part of the premium is to be derived from funds
4-12 contributed by the insured persons specifically for their insurance
4-13 must insure all eligible persons, or all except any as to whom
4-14 evidence of individual insurability is not satisfactory to the
4-15 insurer. The policy may provide that a participating employer or
4-16 labor union may pay the premium directly to the insurer for the
4-17 policy issued to the trustee, and in that event, the employer or
4-18 labor union becomes the premium payor for the insured employees or
4-19 union members for that employer unit.
4-20 (c) The policy must cover at date of issue at
4-21 least one hundred (100) persons; unless the policy is issued to the
4-22 trustees of a fund established by employers which have assumed
4-23 obligations through a collective bargaining agreement and are
4-24 participating in the fund either pursuant to those obligations with
4-25 regard to one or more classes of their employees which are
4-26 encompassed in the collective bargaining agreement or as a method
4-27 of providing insurance benefits for other classes of their
4-28 employees, or unless the policy is issued to the trustees of a fund
4-29 established by one or more labor unions.
4-30 (d) The amounts of insurance under the policy
4-31 must be based upon some plan precluding individual selection either
4-32 by the insured persons or by the policyholder or employer. No
4-33 policy may be issued which provides term insurance on any person
4-34 which together with any other term insurance under any group life
4-35 insurance policy or policies issued to trustees or employers
4-36 exceeds Two <One> Hundred Fifty Thousand Dollars ($250,000.00)
4-37 <($100,000.00)>, unless seven <four> hundred percent <(400%)> of
4-38 the annual compensation of such employee from his employer or
4-39 employers exceeds Two <One> Hundred Fifty Thousand Dollars
4-40 ($250,000.00) <($100,000.00)>, in which event all such term
4-41 insurance shall not exceed seven <four> hundred percent <(400%)> of
4-42 such annual compensation.
4-43 (e) The limitation as to amount of group
4-44 insurance on any person shall not apply to group insurance on other
4-45 than the term plan where such insurance is to be used to fund the
4-46 benefits under a pension plan and the amount of such insurance does
4-47 not exceed that required to provide at normal retirement date the
4-48 pension specified by the plan, and except that a group policy which
4-49 is issued by the same or another carrier to replace another group
4-50 policy may provide term insurance not to exceed the amount provided
4-51 by the policy which it replaces, or the amounts provided above
4-52 whichever is greater.
4-53 (f) No policy may be issued (i) to insure
4-54 employees of any employer whose eligibility to participate in the
4-55 fund as an employer arises out of considerations directly related
4-56 to the employer being a commercial correspondent or business client
4-57 or patron of another employer (regardless of whether such other
4-58 employer is or is not participating in the fund); or (ii) to insure
4-59 employees of any employer which is not located in this state,
4-60 unless the majority of the employers whose employees are to be
4-61 insured are located in this state, or unless the policy is issued
4-62 to the trustees of a fund established by one or more labor unions.
4-63 (5A) A policy issued to an association or trust for a
4-64 group of individuals for the payment of future funeral expenses.
4-65 (6) A policy issued to cover any other group subject
4-66 to the following requirements:
4-67 (a) No such group life insurance policy shall be
4-68 delivered in this state unless the Commissioner of Insurance finds
4-69 that:
4-70 (i) the issuance of such group policy is
5-1 not contrary to the best interest of the public;
5-2 (ii) the issuance of the group policy
5-3 would result in economies of acquisition or administration; and
5-4 (iii) the benefits are reasonable in
5-5 relation to the premiums charged.
5-6 (b) No such group life insurance coverage may be
5-7 offered in this state by an insurer under a policy issued in
5-8 another state unless this state or another state having
5-9 requirements substantially similar to those contained in Paragraph
5-10 (a) of Subdivision (6) has made a determination that such
5-11 requirements have been met.
5-12 (c) The premium for the policy shall be paid
5-13 either from the policyholder's funds or from funds contributed by
5-14 the covered person or from both.
5-15 (d) Notwithstanding other provisions of law, an
5-16 employer may insure the lives of its officers, directors,
5-17 employees, and retirees under this subdivision for the purpose of
5-18 and in an amount necessary to provide funds to offset fringe
5-19 benefit-related liabilities. Evidence of the purpose of the policy
5-20 shall be submitted to the Commissioner of Insurance. A policy
5-21 issued for such purpose shall not diminish other life insurance
5-22 benefits if any are offered or provided by such employer. The
5-23 provisions of Subdivisions 5 through 10 of Section 2 of this
5-24 article shall not apply to such policies.
5-25 (7) No policy of wholesale, franchise or employee life
5-26 insurance, as hereinafter defined, shall be issued or delivered in
5-27 this state unless it conforms to the following requirements:
5-28 (a) Wholesale, franchise or employee life
5-29 insurance is hereby defined as: a term life insurance plan under
5-30 which a number of individual term life insurance policies are
5-31 issued at special rates to a selected group. A special rate is any
5-32 rate lower than the rate shown in the issuing insurance company's
5-33 manual for individually issued policies of the same type and to
5-34 insureds of the same class.
5-35 (b) Wholesale, franchise or employee life
5-36 insurance may be issued to (1) the employees of a common employer
5-37 or employers, covering at date of issue not less than five
5-38 employees; or (2) the members of a labor union or unions covering
5-39 at date of issue not less than five members; or (3) the members of
5-40 a credit union or credit unions covering at date of issue not less
5-41 than five (5) members.
5-42 (c) The premium for the policy shall be paid
5-43 either wholly from funds contributed by the employer or employers
5-44 of the insured persons, or by the union or unions or by both, or
5-45 partly from such funds and partly from funds contributed by the
5-46 insured person, except that in no event shall the contribution by
5-47 an insured person toward the cost of his insurance exceed forty
5-48 cents per thousand per month.
5-49 (d) No policy may be issued on a wholesale,
5-50 franchise or employee life insurance basis which, together with any
5-51 other term life insurance policy or policies issued on a wholesale,
5-52 franchise, employee life insurance or group basis, provides term
5-53 life insurance coverage for an amount in excess of Two <One>
5-54 Hundred Fifty Thousand Dollars ($250,000.00) <($100,000.00)>,
5-55 unless seven <four> hundred percent <(400%)> of the annual
5-56 compensation of such employee from his employer or employers
5-57 exceeds Two <One> Hundred Fifty Thousand Dollars ($250,000.00)
5-58 <($100,000.00)>, in which event all such term insurance shall not
5-59 exceed seven <four> hundred percent <(400%)> of such annual
5-60 compensation. An individual application shall be taken for each
5-61 such policy and the insurer shall be entitled to rely upon the
5-62 applicant's statements as to applicant's other similar coverage
5-63 upon his life.
5-64 (e) Each such policy of insurance shall contain
5-65 a provision substantially as follows:
5-66 A provision that if the insurance on an insured person ceases
5-67 because of termination of employment or of membership in the union,
5-68 such person shall be entitled to have issued to him by the insurer,
5-69 without evidence of insurability an individual policy of life
5-70 insurance without disability or other supplementary benefits,
6-1 provided application for the individual policy shall be made, and
6-2 the first premium paid to the insurer, within thirty-one (31) days
6-3 after such termination.
6-4 (f) Each such policy may contain any provision
6-5 substantially as follows:
6-6 (1) A provision that the policy is
6-7 renewable at the option of the insurer only;
6-8 (2) A provision for termination of
6-9 coverage by the insurer upon termination of employment by the
6-10 insured employee;
6-11 (3) A provision requiring a person
6-12 eligible for insurance to furnish evidence of individual
6-13 insurability satisfactory to the insurer as condition to coverage.
6-14 (g) The limitation as to amount of group and
6-15 wholesale, franchise or employee life insurance on any person shall
6-16 not apply to group insurance on other than the term plan where such
6-17 insurance is to be used to fund benefits under a pension plan and
6-18 the amount of such insurance does not exceed that required to
6-19 provide at normal retirement date the pension specified by the
6-20 plan, and except that a group policy which is issued by the same or
6-21 another carrier to replace another group policy may provide term
6-22 insurance not to exceed the amounts provided by the policy which it
6-23 replaces, or the amounts provided above, whichever are greater.
6-24 (h) Nothing contained in this Subsection (7)
6-25 shall in any manner alter, impair or invalidate (1) any policy
6-26 heretofore issued prior to the effective date of this Act; nor (2)
6-27 any such plan heretofore placed in force and effect provided such
6-28 prior plan was at date of issue legal and valid; nor (3) any policy
6-29 issued on a salary savings franchise plan, bank deduction plan,
6-30 pre-authorized check plan or similar plan of premium collection.
6-31 (7A) A policy may be issued to a principal, or if such
6-32 principal is a life or life and accident or life, accident and
6-33 health insurer, by or to such principal, covering when issued not
6-34 less than ten (10) agents of the principal, subject to the
6-35 following requirements:
6-36 (a) As used in this section, the term "agents"
6-37 shall be deemed to include general agents, subagents and salesmen.
6-38 (b) The agents eligible for insurance under the
6-39 policy shall be those who are under contract to render personal
6-40 services for the principal for a commission or other fixed or
6-41 ascertainable compensation.
6-42 (c) The premium for the policy shall be paid
6-43 either wholly by the principal or partly from funds contributed by
6-44 the principal and partly from funds contributed by the insured
6-45 agents. A policy on which no part of the premium is to be derived
6-46 from funds contributed by the insured agents must insure all of the
6-47 eligible agents or all of any class or classes thereof determined
6-48 by conditions pertaining to the services to be rendered by the
6-49 agents to the principal. A policy on which part of the premium is
6-50 to be derived from funds contributed by the insured agents must
6-51 cover at issue at least seventy-five percent (75%) of the eligible
6-52 agents or at least seventy-five percent (75%) of any class or
6-53 classes thereof determined by conditions pertaining to the services
6-54 to be rendered by the agents; provided, however, that the benefits
6-55 may be extended to other classes of agents as seventy-five percent
6-56 (75%) thereof express the desire to be covered.
6-57 (d) The amounts of insurance under the policy
6-58 must be based upon some plan precluding individual selection either
6-59 by the principal or by the agents. No policy may be issued which
6-60 provides term insurance on any agent which together with any other
6-61 term insurance under any group life insurance policy or policies
6-62 issued to the principal exceeds Two <One> Hundred Fifty Thousand
6-63 Dollars ($250,000.00) <($100,000.00)>, unless seven <four> hundred
6-64 percent <(400%)> of the annual commissions or other fixed or
6-65 ascertainable compensation of such agent from the principal exceeds
6-66 Two <One> Hundred Fifty Thousand Dollars ($250,000.00)
6-67 <($100,000.00)>, in which event all such term insurance shall not
6-68 exceed seven <four> hundred percent <(400%)> of such annual
6-69 commissions or other fixed or ascertainable compensation.
6-70 (e) The insurance shall be for the benefit of
7-1 persons other than the principal.
7-2 (8) A policy issued to the Veterans Land Board of the
7-3 State of Texas, who shall be deemed the policyholder to insure
7-4 persons purchasing land under the Texas Veterans Land Program as
7-5 provided in Subchapter I, Chapter 161, Natural Resources Code
7-6 <Section 16(B) of Article 5421m, Vernon's Texas Civil Statutes
7-7 (Chapter 318, Acts of the 51st Legislature, Regular Session, 1949,
7-8 as amended)>.
7-9 (9) Any policy of group term life insurance may be
7-10 extended, in the form of group term life insurance only, to insure
7-11 the spouse and minor children, natural or adopted, of an insured
7-12 employee, provided the policy constitutes a part of the employee
7-13 benefit program established for the benefit of employees of the
7-14 United States government or any subdivision thereof, and provided
7-15 further, that the spouse or children of other employees covered by
7-16 the same employee benefit program in other states of the United
7-17 States are or may be covered by group term life insurance, subject
7-18 to the following requirements:
7-19 (a) The premiums for the group term life
7-20 insurance shall be paid by the policyholder from funds solely
7-21 contributed by the insured employee.
7-22 (b) The amounts of insurance under the policy
7-23 must be based upon some plan precluding individual selection either
7-24 by the insured employee or by the policyholder, provided that group
7-25 term life insurance upon the life of a spouse shall not exceed the
7-26 lesser of (1) Ten Thousand Dollars ($10,000.00) or (2) one-half of
7-27 the amount of insurance on the life of the insured employee under
7-28 the group policy; and provided that group term life insurance on
7-29 the life of any minor child shall not exceed Two Thousand Dollars
7-30 ($2,000.00).
7-31 (c) Upon termination of the group term life
7-32 insurance with respect to the spouse of any insured employee by
7-33 reason of such person's termination of employment or death, or
7-34 termination of the group contract, the spouse insured pursuant to
7-35 this section shall have the same conversion rights as to the group
7-36 term life insurance on his or her life as is provided for the
7-37 insured employee.
7-38 (d) Only one certificate need be issued for
7-39 delivery to an insured employee if a statement concerning any
7-40 dependent's coverage is included in such certificate.
7-41 (10) A policy of group life insurance may be issued to
7-42 a nonprofit service, civic, fraternal, or community organization or
7-43 association which has had an active existence for at least two
7-44 years, has a constitution or bylaws, was formed for purposes other
7-45 than obtaining insurance, and which association shall be deemed the
7-46 policyholder to insure members and employees of such association
7-47 for the benefit of persons other than the association or any of its
7-48 officers, subject to the following requirements:
7-49 (a) The persons eligible for insurance shall be
7-50 all the members of the association, or all of any class thereof
7-51 determined by conditions pertaining to membership in the
7-52 association.
7-53 (b) The amounts of insurance under the policy
7-54 shall be based upon some plan precluding individual selection
7-55 either by the insured members or by the association.
7-56 (c) The premium for the policy shall be paid by
7-57 the policyholder from the policyholder's own funds or from funds
7-58 contributed by the employees or members specifically for their
7-59 insurance, or from both. The policy may provide that the premium
7-60 may be paid directly to the insurer by individual employees or
7-61 members from their own funds, and in that event, the respective
7-62 employees or members become the premium payor for that particular
7-63 certificate.
7-64 (d) The policy shall cover at least twenty-five
7-65 (25) persons at date of issue.
7-66 SECTION 2. This Act takes effect September 1, 1995, and
7-67 applies only to an insurance policy that is delivered, issued for
7-68 delivery, or renewed on or after January 1, 1996. A policy
7-69 delivered, issued for delivery, or renewed before January 1, 1996,
7-70 is governed by the law as it existed immediately before the
8-1 effective date of this Act, and that law is continued in effect for
8-2 that purpose.
8-3 SECTION 3. The importance of this legislation and the
8-4 crowded condition of the calendars in both houses create an
8-5 emergency and an imperative public necessity that the
8-6 constitutional rule requiring bills to be read on three several
8-7 days in each house be suspended, and this rule is hereby suspended.
8-8 * * * * *