The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 103 : Life Insurance Policies and Annuity Contracts

Subchapter 005 : GROUP LIFE INSURANCE

• § 3809. Association of employers groups

  The lives of a group of individuals may be insured under a policy issued to an association of two or more employers, which association shall be deemed the policyholder, to insure employees of such employers for the benefits of persons other than the association or the employers, subject to the following requirements:

  (1) The policy may be issued only if:

  (A) the association has been in existence for at least five years and was formed for purposes other than obtaining the insurance; and

  (B) the participating employers 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 600, in which event such participating employers must constitute at least 25 percent of such total employers, in either case omitting from consideration any employer whose employees are already covered for group life insurance.

  (2) 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. The policy may provide that the term “employees” shall include the individual proprietor or partners whenever a participating employer is an individual proprietor or a partnership. The policy may provide that the term “employees” shall include retired employees. The policy may provide that the term “employees” shall include the employees of the association to which the policy is issued.

  (3) The premium for the policy shall be paid by the association, either wholly from the association’s funds or funds contributed by the employers, or partly from such funds and partly from funds contributed by the insured employees. No policy may be issued on which the entire premium payable by the policyholder is to be derived from funds contributed by the insured employees. A policy on which part of the premium so payable is to be derived from funds contributed by the insured employees may be placed in force only if at least 75 percent of the then eligible employees of each participating employer, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premiums so payable is to be derived from funds contributed by the insured employees must insure all eligible employees, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.

  (4) The policy must cover at least 100 employees at date of issue.

  (5) 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. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 9).)