§ 3810a. Associations and discretionary groups
(a) The lives of a group of individuals may be insured under a policy issued to an association,
or to the trustees of a fund established or maintained for the benefit of members
of an association, which association or trustees shall be deemed the policyholder,
to insure members of such association for the benefit of persons other than the association,
trustees, or their officials, subject to the following requirements:
(1) The association shall have a minimum of 100 members at the time of incorporation or
formation if it has been incorporated or formed outside this State, and a minimum
of 25 members at the time of incorporation or formation if it has been incorporated
or formed in this State.
(2) The association shall have been organized and maintained in good faith for purposes
other than that of obtaining insurance.
(3) The association shall have been in active existence for at least five years.
(4) The association shall have articles of association and bylaws that provide that:
(A) the association holds regular meetings not less than annually to further purposes
of the members;
(B) the association collects dues or solicits contributions from members; and
(C) the members have voting privileges and representation on the governing board and committees.
(5)(A) The premium for the policy shall be paid from funds contributed by the association,
or by members, or by both, or from funds contributed by the covered persons or from
both the covered persons and the association members.
(B) Except as provided in subdivision (C) of this subdivision (5), a policy on which no
part of the premium is to be derived from funds contributed by the covered persons
specifically for the insurance must insure all eligible persons, except those who
reject such coverage in writing.
(C) An insurer may exclude or limit the coverage on any person as to whom evidence of
individual insurability is not satisfactory to the insurer.
(6) The amount of insurance under the policy must be based upon some plan precluding anti-selection
either by the members or the association.
(b) The lives of a group of individuals may be insured under a policy issued to any other
group determined in the discretion of the Commissioner to be substantially similar
to those described in this chapter.
(c) The lives of individuals insured under a group policy authorized by this subchapter
may continue to be insured following termination of employment, membership, or other
affiliation of the individual with the group under a portability group approved by
the Commissioner, provided that the group policy complies with all the applicable
requirements of this subchapter. (Added 1993, No. 55, § 9, eff. June 3, 1993; amended 2009, No. 137 (Adj. Sess.), § 7.)