As Reported by the House Insurance Committee

126th General Assembly Regular Session 2005-2006

Sub. H. B. No. 193

Representatives Daniels, G. Smith, Fessler, Combs, Wolpert, C. Evans, Martin, Gibbs, D. Evans, Setzer, Barrett, Perry, DeBose, Boccieri, Hughes, Koziura 

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A BILL

To amend sections 9.90, 3917.01, 3917.06, and

1

3917.07, to enact new section 3917.03 and section

2

3917.02, and to repeal section 3917.03 of the

3

Revised Code to permit the sale of group life

4

insurance to specified groups and provide the

5

Superintendent of Insurance with the discretion to

6

authorize the sale of group life insurance to

7

additional groups.

8

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 9.90, 3917.01, 3917.06, and 3917.07	9
be amended and new section 3917.03 and section 3917.02 of the	10
Revised Code be enacted to read as follows:	11

Sec. 9.90.  (A) The governing board of any public institution	12
of higher education, including without limitation state	13
universities and colleges, community college districts, university	14
branch districts, technical college districts, and municipal	15
universities, or the board of education of any school district,	16
may, in addition to all other powers provided in the Revised Code:	17

(1) Contract for, purchase, or otherwise procure from an	18
insurer or insurers licensed to do business by the state of Ohio	19
for or on behalf of such of its employees as it may determine,	20
life insurance, or sickness, accident, annuity, endowment, health,	21
medical, hospital, dental, or surgical coverage and benefits, or	22
any combination thereof, by means of insurance plans or other	23
types of coverage, family, group or otherwise, and may pay from	24
funds under its control and available for such purpose all or any	25
portion of the cost, premium, or charge for such insurance,	26
coverage, or benefits. However, the governing board, in addition	27
to or as an alternative to the authority otherwise granted by	28
division (A)(1) of this section, may elect to procure coverage for	29
health care services, for or on behalf of such of its employees as	30
it may determine, by means of policies, contracts, certificates,	31
or agreements issued by at least two health insuring corporations	32
holding a certificate of authority under Chapter 1751. of the	33
Revised Code and may pay from funds under the governing board's	34
control and available for such purpose all or any portion of the	35
cost of such coverage.	36

(2) Make payments to a custodial account for investment in	37
regulated investment company stock for the purpose of providing	38
retirement benefits as described in section 403(b)(7) of the	39
Internal Revenue Code of 1954, as amended. Such stock shall be	40
purchased only from persons authorized to sell such stock in this	41
state.	42

Any income of an employee deferred under divisions (A)(1) and	43
(2) of this section in a deferred compensation program eligible	44
for favorable tax treatment under the Internal Revenue Code of	45
1954, as amended, shall continue to be included as regular	46
compensation for the purpose of computing the contributions to and	47
benefits from the retirement system of such employee. Any sum so	48
deferred shall not be included in the computation of any federal	49
and state income taxes withheld on behalf of any such employee.	50

(B) All or any portion of the cost, premium, or charge	51
therefor may be paid in such other manner or combination of	52
manners as the governing board or the school board may determine,	53
including direct payment by the employee in cases under division	54
(A)(1) of this section, and, if authorized in writing by the	55
employee in cases under division (A)(1) or (2) of this section, by	56
such governing board or school board with moneys made available by	57
deduction from or reduction in salary or wages or by the foregoing	58
of a salary or wage increase. Division (B)(7) ofNothing in	59
section 3917.01 and the last paragraph ofor section 3917.06 of	60
the Revised Code shall not prohibit the issuance or purchase of	61
group life insurance authorized by this section by reason of	62
payment of premiums therefor by the governing board or the school	63
board from its funds, and such group life insurance may be so	64
issued and purchased if otherwise consistent with the provisions	65
of sections 3917.01 to 3917.07 of the Revised Code.	66

Sec. 3917.01. (A) Group life insurance is that form of life	67
insurance covering not less than two employees with or without	68
medical examination, written under aAs used in sections 3917.01	69
to 3917.06 of the Revised Code, the following forms of life	70
insurance are group life insurance:	71

(A) A life insurance policy issued to thean employer, or to	72
a trusteethe trustees of a trust createdfund established by such	73
an employer, the premium on which is to be paid by the employer,	74
by the employer and employees jointly, or by such trustee out of	75
funds contributed by the employer or by the employer and employees	76
jointly, and insuring only all of the employer's employees or all	77
of any classes thereof, determined by sex, age, or conditions	78
pertaining to the employment, for amounts of insurance based upon	79
some plan which will preclude individual selection,which employer	80
or trustees shall be deemed the policyholder, to insure employees	81
of the employer for the benefit of persons other than the	82
employer; but when the premium is to be paid by the employer and	83
employee jointly and the benefits of the policy are offered to all	84
eligible employees, not less than seventy-five per cent of such	85
employees may be so insured. Such group, subject to all of the	86
following requirements:	87

(1) All of the employees of the employer, or all of any class	88
or classes of employees, are eligible for life insurance. The	89
policy may provide that "employees" includes the employees of one	90
or more subsidiary corporations and the employees, individual	91
proprietors, and partners of one or more affiliated corporations,	92
proprietorships, or partnerships if the business of the employer	93
and the affiliated corporations, proprietorships, or partnerships	94
is under common control. The policy may provide that "employees"	95
includes retired employees of the employer and the officers,	96
managers, former employees, and retired employees of subsidiary or	97
affiliated corporations and the individual proprietors, partners,	98
employees, and retired employees of affiliated individuals and	99
firms, when the business of such subsidiary or affiliated	100
corporations, firms, or individuals is controlled by the common	101
employer through stock ownership, contract, or otherwise. This	102
section does not define as a group the lives covered by a policy	103
issued on more than one life which provides for payments upon the	104
death of any one or more or upon the death of each of the lives so	105
insured, and upon which the premium rates charged are computed on	106
the same basis as used by the issuing company on single life	107
policies and upon its regular forms of insurance.	108

(B) As used in sections 3917.01 to 3917.06 of the Revised	109
Code, the following forms of life insurance are group life	110
insurance:	111

(1) Life insurance covering the members of one or more	112
companies, batteries, troops, battalions, divisions, or other	113
units of the national guard or naval militia of any state, written	114
under a policy issued to the commanding general of the national	115
guard or commanding officer of the naval militia, who is the	116
employer for the purposes of such sections, the premium on which	117
is to be paid by the members of such units for the benefit of	118
persons other than the employer; provided that when the benefits	119
of the policy are offered to all eligible members of a unit of the	120
national guard or naval militia, not less than seventy-five per	121
cent of the members of such a unit may be insured;	122

(2) Life insurance covering the members of one or more troops	123
or other units of the state troopers or state police of any state,	124
written under a policy issued to the commanding officer of the	125
state troopers or state police who is the employer for the	126
purposes of such sections, the premium on which is to be paid by	127
the members of such units for the benefit of persons other than	128
the employer; provided that when the benefits of the policy are	129
offered to all eligible members of a unit of the state troopers or	130
state police, not less than seventy-five per cent of the members	131
of such a unit may be insured;	132

(3) Life insurance covering the members of any labor union,	133
written under a policy issued to such union which is the employer	134
for the purposes of such sections, the premium on which is to be	135
paid by the union or by the union and its members jointly, and	136
insuring only all of its members, who are actively engaged in the	137
same occupation, for amounts of insurance based upon some plan	138
which will preclude individual selection, for the benefit of	139
persons other than the union or its officials; provided that in	140
case the insurance policy is cancellable at the end of any policy	141
year at the option of the insurance company and that the basis of	142
premium rates may be changed by the insurance company at the	143
beginning of any policy year, all members of a labor union may be	144
insured; and provided that when the premium is to be paid by the	145
union and its members jointly and the benefits are offered to all	146
eligible members, not less than seventy-five per cent of such	147
members may be insured; and provided that when members apply and	148
pay for additional amounts of insurance, a smaller percentage of	149
members may be insured for such additional amounts if they pass	150
satisfactory medical examinations or submit satisfactory evidence	151
of insurability;	152

(4) Life insurance written under adirectors of a corporate	153
employer. A policy issued to insure the employees of a public body	154
may provide that "employees" includes elected or appointed	155
officials.	156

(2) The premium for the policy shall be paid either from the	157
employer's funds or from funds contributed by the insured	158
employees, or from both. Except as provided in division (A)(3) of	159
this section, a policy for which no part of the premium is derived	160
from funds contributed by the insured employees shall insure all	161
eligible employees, except those employees who reject the coverage	162
in writing.	163

(3) An insurer may exclude or limit the coverage on any	164
employee as to whom evidence of individual insurability is not	165
satisfactory to the insurer.	166

(4) A policy issued pursuant to section 3911.091 of the	167
Revised Code is not subject to the requirements of this division.	168

(B) A life insurance policy issued to a creditor, whoor its	169
parent holding company or to a trustee or trustees or agent	170
designated by two or more creditors, which creditor, holding	171
company, affiliate, trustee, trustees, or agent shall be deemed	172
the policyholder, to insure debtors of the creditor or creditors,	173
subject to the following requirements:	174

(a)(1) The debtors eligible for insurance under the policy	175
shall be all of the debtors of the creditor, excepting that no	176
debtor is eligible unless the indebtedness constitutes an	177
obligation to repay that is binding upon the debtor during the	178
debtor's lifetime at and from the date the insurance becomes	179
effective upon the debtor's lifeor creditors, or all of any class	180
or classes of the debtors. The policy may provide that "debtors"	181
includes theall of the following:	182

(a) Borrowers of money or purchasers or lessees of goods,	183
services, or property for which payment is arranged through a	184
credit transaction;	185

(b) The debtors of one or more subsidiary corporations and	186
the;	187

(c) The debtors of one or more affiliated corporations,	188
proprietorsproprietorships, or partnerships if the business of	189
the policyholder and of suchthe affiliated corporations,	190
proprietorsproprietorships, or partnerships is under common	191
control through stock ownership, contract, or otherwise.	192

(b)(2) The premium for the policy shall be paid by the	193
policyholder, either from the creditor's funds, or from charges	194
collected from the insured debtors, or from both. A policy on	195
which part or all of the premium is to be derived from the	196
collection from the insured debtors of identifiable charges not	197
required of uninsured debtors shall not include debtors under	198
obligations outstanding at its date of issue without evidence of	199
individual insurability unless at least seventy-five per cent of	200
the then eligible debtors elect to pay the required charges. A	201
Except as provided in division (B)(3) of this section, a policy on	202
which no part of the premium is to be derived from the collection	203
of such identifiable charges mustfunds contributed by insured	204
debtors specifically for the debtors' insurance shall insure all	205
eligible debtors, or all except any.	206

(3) An insurer may exclude any debtor as to whom evidence of	207
individual insurability is not satisfactory to the insurer.	208

(c) The policy may be issued only if the group of eligible	209
debtors is then receiving new entrants at the rate of at least one	210
hundred persons yearly, or may reasonably be expected to receive	211
at least one hundred new entrants during the first policy year,	212
and continues to receive not less than one hundred new entrants to	213
the group yearly, and only if the policy reserves to the insurer	214
the right to require evidence of individual insurability if less	215
than seventy-five per cent of the new entrants become insured. The	216
policy may exclude from the classes eligible for insurance classes	217
of debtors determined by age.	218

(d) The amount of insurance on the life of any debtor may be	219
determined by the age of the debtor based upon a plan which will	220
preclude individual selection and shall at no time exceed the	221
amount owed by the debtor that is repayable in installments to the	222
creditor.	223

(e) The insurance shall be payable to the policyholder. Such	224
payment shall reduce or extinguish the unpaid indebtedness of the	225
debtor to the extent of such payment.	226

(5) Life insurance covering the members of any duly organized	227
corporation or association of veterans or veteran society or	228
association of the World War veterans, written under a policy	229
issued to such corporation, association, or society which is the	230
employer for the purpose of such sections, the premium on which is	231
to be paid by the corporation, association, society, and its	232
members jointly, and insuring all of its members who are actively	233
engaged in any occupation for amounts of insurance based upon some	234
plan which will preclude individual selection for the benefit of	235
persons other than the corporation, association, or society or its	236
officials; provided that when the premium is to be paid by the	237
corporation, association, or society and its members jointly and	238
the benefits are offered to all eligible members, not less than	239
seventy-five per cent of such members may be insured; and provided	240
that when members apply and pay for additional amounts of	241
insurance, a smaller percentage of members may be insured for such	242
additional amounts if they pass satisfactory medical examinations	243
or submit satisfactory evidence of insurability;	244

(6) Life insurance covering the members of any organization	245
of agriculturists or horticulturists organized under the	246
co-operative laws of this state, written under a policy issued to	247
such co-operative association which is the employer for the	248
purpose of such sections, the premium on which is to be paid by	249
the association or by the association and its members jointly, and	250
insuring all of its members who are actively engaged in	251
agricultural or horticultural pursuits, for an amount of insurance	252
based upon some plan which will preclude individual selection, and	253
for the benefit of persons other than the association or its	254
officials; provided that when the premium is to be paid by the	255
corporation, association, or society and its members jointly and	256
the benefits are offered to all eligible members, not less than	257
seventy-five per cent of such members may be insured; provided	258
that when members apply and pay for additional amounts of	259
insurance, a smaller percentage of members may be insured for such	260
additional amounts if they pass satisfactory medical examinations	261
or submit satisfactory evidence of insurability;	262

(7) Life insurance covering employees of a political	263
subdivision or district of this state, or of an educational or	264
other institution supported in whole or in part by public funds,	265
or of any classes thereof, determined by conditions pertaining to	266
employment, or of this state or any department or division	267
thereof, written under a policy issued to such political	268
subdivision, district, or institution, or the proper official or	269
board of this state or of such state department or division	270
thereof, which is the employer for the purpose of such sections,	271
the premium on which is to be paid by such employees, unless	272
otherwise provided by law, charter, or ordinance, for the benefit	273
of persons other than the employer; provided that when the	274
benefits of the policy are offered to all eligible employees of a	275
political subdivision or district of the state or of an	276
educational or other institution supported in whole, or in part by	277
public funds, or of this state or a state department or division	278
thereof, not less than seventy-five per cent of such employees may	279
be insured; and provided that when employees apply and pay for	280
additional amounts of insurance, a smaller percentage of employees	281
may be insured for such additional amounts if they pass	282
satisfactory medical examinations or submit satisfactory evidence	283
of insurability; and provided that upon acquisition by a political	284
subdivision of any privately owned property or enterprise, the	285
employees of which have been covered by a group policy of life or	286
other insurance as employees of such private employer, such	287
political subdivision and insurance company may continue such	288
contract in force upon similar conditions as the last preceding	289
private employer;	290

(8) Life insurance covering the members, or the members and	291
the employees of members of any duly organized association, other	292
than an association subject to any other provision of this	293
division, written under a policy issued to such association, which	294
association is the employer for the purpose of such sections, the	295
premium on which is to be paid by the insured members or their	296
employees, insuring members and their employees for amounts of	297
insurance based upon some plan which will preclude individual	298
selection except as provided in this section, for the benefit of	299
persons other than the association; provided the association has	300
been in existence for at least two years immediately preceding the	301
purchase of the insurance; provided that there must be at least	302
fifty insured members in any group; and provided that the	303
association has been organized and is maintained in good faith for	304
purposes other than that of obtaining insurance;	305

(9) Life(4) The amount of insurance on the life of any	306
debtor, at no time, shall exceed the greater of the scheduled or	307
actual amount of unpaid indebtedness to the creditor, except that	308
insurance written in connection with open-end credit having a	309
credit limit exceeding ten thousand dollars may be in an amount	310
not exceeding the credit limit.	311

(5) The insurance may be payable to the creditor or any	312
successor to the right, title, and interest of the creditor. The	313
payment shall reduce or extinguish the unpaid indebtedness of the	314
debtor to the extent of the payment and any excess of the	315
insurance shall be payable to the estate of the insured.	316

(6) Notwithstanding divisions (B)(1) to (5) of this section,	317
insurance on agricultural credit transaction commitments may be	318
written up to the amount of the loan commitment on a nondecreasing	319
or level term plan. Insurance on educational credit transaction	320
commitments may be written up to the amount of the loan commitment	321
less the amount of any repayments made on the loan.	322

(C) A life insurance policy issued to a labor union or	323
similar employee organization, which union or organization shall	324
be deemed the policyholder, to insure members of the union or	325
organization for the benefit of persons other than the union or	326
organization or any of its officials, representatives, or agents,	327
subject to all of the following requirements:	328

(1) All of the members of the union or organization, or all	329
of any class or classes of the members, are eligible for insurance	330
under the policy.	331

(2) The premium for the policy is paid either from funds of	332
the union or organization or from funds contributed by the insured	333
members specifically for the members' insurance, or from both.	334
Except as provided in division (C)(3) of this section, a policy on	335
which no part of the premium is derived from funds contributed by	336
the insured members specifically for the members' insurance shall	337
insure all eligible members, except those members who reject the	338
coverage in writing.	339

(3) An insurer may exclude or limit the coverage on any	340
member as to whom evidence of individual insurability is not	341
satisfactory to the insurer.	342

(D) A life insurance policy issued to a trust or to the	343
trustees of a trust fund established jointly by one or more	344
employers in the same industry, on the one hand, andor adopted by	345
two or more employees, or by one or more labor unions representing	346
as bargaining agents employees of such employers, on the other	347
hand, or by twoor similar employee organizations, or by one or	348
more employers in the same industry, or by twoand one or more	349
labor unions or similar employee organizations, which trust or	350
trustees shall be deemed the policyholder, to insure employees of	351
the employers or members of the unions or similar employee	352
organizations for the benefit of persons other than the employers	353
or the unions or the trusteesorganizations, subject to the	354
following requirements:	355

(a)(1) The persons eligible for such insurance shall be all	356
of the employees of the employers, or all of the members of the	357
unions or organizations, or all of any class of such employees	358
determined by sex, age, or conditions pertaining to their	359
employment, or to membership in the unions, or to any or all of	360
themor classes of the employees or members. The policy may	361
provide that "employees" includes the retired employees of the	362
employer and the officers, managers, employees, and retired	363
employees of one or more subsidiary or affiliated corporations and	364
the employees, individual proprietors, and partners, employees,	365
and retired employees of affiliated individuals and firms, when	366
the business of such subsidiary orof one or more affiliated	367
corporations, firms, or individuals is controlled by the common	368
employer through stock ownership, contract, or otherwise	369
proprietorships, or partnerships if the business of the employer	370
and of the affiliated corporations, proprietorships, or	371
partnerships is under common control. The policy may provide that	372
"employees" includes the individual proprietor or partners if the	373
employer is an individual proprietorproprietorship or a	374
partnership. The policy may provide that "employees" includes	375
retired employees, former employees, and directors of a corporate	376
employer. The policy may provide that "employees" includes the	377
trustees or their employees, or both, if their duties are	378
principally connected with suchthe trusteeship.	379

(b)(2) The premium for the policy shall be paid by the	380
trustees, either wholly from funds contributed by the employer or	381
employers of the insured persons, or partly from such funds and	382
partly from funds contributed by the insured employees. If part of	383
the premium is to be derived from funds contributed by the insured	384
employees, then such policy may be placed in force only if it	385
covers at least seventy-five per cent of the then eligible	386
employees. Aor by the union or unions or similar employee	387
organizations, or by both, or from funds contributed by the	388
insured persons or from both the insured persons and the employers	389
or unions or similar employee organizations. Except as provided in	390
division (D)(3) of this section, a policy on which no part of the	391
premium is derived from funds contributed by the insured employees	392
persons specifically for their insurance must insure all eligible	393
employees.	394

(c) Any policy must insure at least two persons at date of	395
issue.	396

(d) The amounts of insurance under the policy must be based	397
upon some plan precluding individual selection by the insured	398
persons or the policyholder or the employers or the unions or the	399
trustees.	400

(10) Life insurance covering the members of a credit union,	401
which shall be deemed to be the employer for the purposes of this	402
section, the premium on which is to be paid by the credit union or	403
by the credit union and its members jointly, and insuring all of	404
its eligible members for amounts of insurance not in excess of the	405
share balance as to each member, and for the benefit of persons	406
other than the credit union or its officers; provided that in the	407
determination of the eligibility of members there may be	408
classifications and limitations based upon age; provided also that	409
when the premium is to be paid by the credit union and its members	410
jointly and the benefits are offered to all eligible members, not	411
less than seventy-five per cent of such members may be so insured;	412
provided also that in obtaining such insurance, the officers of	413
the credit union shall consider proposals from any licensed	414
insurer; provided also that members may be required to provide	415
evidence of insurability satisfactory to the insurer.	416

(11) Life insurance covering the members of any duly	417
organized corporation or association of members of the Ohio	418
national guard, the Ohio naval militia, and the Ohio military	419
reserve, which shall have been in existence for at least two years	420
immediately preceding the purchase of such insurance, written	421
under a policy issued to such corporation or association, which	422
corporation or association is the employer for the purpose of such	423
sections, the premium on which is to be paid by the insured	424
members, insuring members for amounts of insurance based upon some	425
plan which will preclude individual selection, except as provided	426
in this section, for the benefit of persons other than the	427
corporation or association, provided that there must be at least	428
fifty insured members in any group, and provided further that	429
unless seventy-five per cent of all members or one thousand	430
members, whichever is the lesser number, are insured, each member	431
must pass a satisfactory medical examination in order to be	432
insured; and provided that, when members apply and pay for	433
additional amounts of insurance, they may be insured for such	434
additional amounts if they pass satisfactory medical examinations	435
or submit satisfactory evidence of insurabilitypersons, except	436
those persons who reject the coverage in writing.	437

(3) An insurer may exclude or limit the coverage on any	438
person as to whom evidence of individual insurability is not	439
satisfactory to the insurer.	440

(E) A life insurance policy issued to an association or to a	441
trust or the trustees of a fund established, created, or	442
maintained for the benefit of members of one or more associations,	443
which association, trust or trustee, or an agent, shall be deemed	444
the policyholder, subject to all of the following requirements:	445

(1) The association or associations have at the outset a	446
minimum of one hundred persons, have been organized and maintained	447
in good faith for purposes other than that of obtaining insurance,	448
have been in active existence for at least two years, and have a	449
constitution and bylaws providing for all of the following:	450

(a) The association or associations shall hold regular	451
meetings not less than annually to further purposes of the	452
members.	453

(b) The association or associations, except for credit	454
unions, shall collect dues or solicit contributions from members.	455

(c) The members of the association or associations shall have	456
voting privileges and representation on the governing board and	457
committees.	458

(2) The policy is subject to all of the following	459
requirements:	460

(a) The policy may insure one or more of the members of the	461
association or associations, employees of the association or	462
associations, or employees of members, or all of any class or	463
classes of the employees or members of the association or	464
associations, and employees of the members of the association or	465
associations, for the benefit of persons other than an employee's	466
employer.	467

(b) The premium for the policy is paid from funds contributed	468
by the association or associations, or by employer members, or by	469
both, or from funds contributed by the covered members or	470
employees or from both the covered members and employees and the	471
association, associations, or employer members.	472

(c) Except as provided in division (E)(3) of this section, a	473
policy on which no part of the premium is derived from funds	474
contributed by the covered members and employees specifically for	475
the covered members' and employees' insurance shall insure all	476
eligible members and employees, except those who reject the	477
coverage in writing.	478

(3) An insurer may exclude or limit the coverage on any	479
member or employee as to whom evidence of individual insurance is	480
not satisfactory to the insurer.	481

(F) A life insurance policy issued to a credit union or to a	482
trustee or trustees or agent designated by two or more credit	483
unions, which credit union, trustee, trustees, or agent shall be	484
deemed the policyholder, to insure the members of the credit union	485
or credit unions for the benefit of persons other than the credit	486
union or credit unions, trust or trustees, or agents or officials	487
of the credit union or credit unions or trust, subject to all of	488
the following requirements:	489

(1) All of the members of the credit union or credit unions,	490
or all of any class or classes of the members, are eligible for	491
insurance.	492

(2) The premium for the policy is paid by the policyholder	493
from the credit union's funds and except as provided in division	494
(F)(3) of this section shall insure all eligible members.	495

(3) An insurer may exclude or limit the coverage on any	496
member as to whom evidence of individual insurability is not	497
satisfactory to the insurer.	498

(12)(G) Life insurance that is written under a policy issued	499
to a trustee under a trust established by an insurer for the	500
purpose of providing continued group life insurance coverage to	501
those former employees, former members, or former members and the	502
employees of such members, and their spouses and dependent	503
childrendependents, previously covered under policies of group	504
life insurance issued by the insurer to employers or trustees	505
pursuant to division (A) of this section, to associations pursuant	506
to division (B)(8)(D) of this section, or to trustees pursuant to	507
division (B)(9)(E) of this section, or to groups pursuant to	508
division (I) of this section, and that is evidenced by the	509
issuance of a certificate of insurance or other evidence of	510
insurance to such former employees or members as required by	511
section 3917.06 of the Revised Code; provided that the amount of	512
the continued life insurance coverage made available to a former	513
employee or member and to the employee's or member's spouse and	514
dependents shall not exceed the amount of the group life insurance	515
coverage previously provided to the employee or member and the	516
employee's or member's eligible dependents at the time of the	517
employee's separation from employment or the member's termination	518
of membership.	519

(13)(H) Life insurance covering the members of a workforce	520
actively engaged in an occupation for, and performing services on	521
behalf of, a duly organized corporation, limited liability	522
company, partnership, proprietor, or a similar organization, whose	523
members are not employees of the organization, written under a	524
policy issued to the organization, which organization is the	525
members' employer for this purpose, the premium on which is to be	526
paid by the organization or by the organization and the members	527
jointly, insuring members for amounts of insurance based upon some	528
plan which will preclude individual selection, for the benefit of	529
persons other than the organization; provided, that when the	530
premium is to be paid by the organization and its members jointly	531
and the benefits are offered to all eligible members, not less	532
than seventy-five per cent of the members may be so insured;	533
provided also that members may be required to furnish evidence of	534
insurability satisfactory to the insurer. Life insurance meeting	535
this definition may also cover the organization's employees at the	536
option of the organization.	537

(C) Any policy issued pursuant to this section, except a	538
policy issued to a creditor pursuant to division (B)(4) of this	539
section, may be extended, in the form of group term life insurance	540
only, to insure the spouse and dependent children of an insured	541
employee or member, or any class or classes thereof, subject to	542
the following requirements:	543

(1) The premiums for the group term life insurance shall be	544
paid by the policyholder, either from the employer, union or	545
association funds, or from funds contributed by the employer,	546
union, or association, or from funds contributed by the insured	547
employee or member, or from both.	548

(2) The amounts of insurance under the policy must be based	549
upon some plan precluding individual selection either by the	550
insured employee or member or by the policyholder.	551

(3) Upon termination of the group term life insurance with	552
respect to the spouse of any insured employee or member by reason	553
of such person's termination of employment or membership or death,	554
the spouse insured pursuant to this section shall have the same	555
conversion rights as to the group term life insurance on the	556
spouse's life as is provided for the insured employee or member.	557

(4) Only one certificate need be issued for delivery to an	558
insured employee or member if a statement concerning any	559
dependent's coverage is included in such certificate.	560

(I)(1) A life insurance policy covering the members of a	561
group other than one listed in divisions (A) to (H) of this	562
section, subject to the superintendent finding all of the	563
following:	564

(a) The issuance of the policy is not contrary to the best	565
interest of the public.	566

(b) The issuance of the policy would result in economies of	567
acquisition or administration.	568

(c) The policy provides benefits that are reasonable in	569
relation to the premiums charged.	570

(2) An insurer shall not offer group life insurance in this	571
state under a policy issued in another state unless the	572
superintendent, or the insurance regulatory authority of another	573
state with requirements substantially similar to the requirements	574
set forth in division (I)(1) of this section, makes a	575
determination that the requirements in division (I)(1) of this	576
section have been met.	577

(3) The premium for a life insurance policy under this	578
division is paid either from the policyholder's funds or from	579
funds contributed by the insured members, or from both, and except	580
as provided in division (I)(4) of this section, the policy must	581
insure all eligible members except those members who reject the	582
coverage in writing.	583

(4) An insurer may exclude or limit the coverage on any	584
member as to whom evidence of individual insurability is not	585
satisfactory to the insurer.	586

Sec. 3917.02. (A) As used in this section:

587

(1) "Direct response solicitation" means a solicitation	588
through a sponsoring or endorsing entity through the mail,	589
telephone, or other mass communication media.	590

(2) "Sponsoring or endorsing entity" means an organization	591
that has arranged for the offering of a program of insurance in a	592
manner that communicates that eligibility for participation in the	593
program is dependent upon affiliation with the organization or	594
that the organization encourages participation in the program.	595

(B) With respect to a program of life insurance that, if	596
issued on a group basis, would not qualify as a policy of group	597
life insurance under divisions (A) to (H) of section 3917.01 of	598
the Revised Code, the insurer shall distribute a written notice to	599
prospective insureds that compensation will or may be paid, if	600
compensation of any kind will or may be paid, to one of the	601
following persons:	602

(1) A policyholder, or sponsoring or endorsing entity, in the	603
case of a group policy;	604

(2) A sponsoring or endorsing entity in the case of	605
individual, blanket, or franchise policies marketed by means of a	606
direct response solicitation.	607

(C) The insurer shall distribute the notice required by this	608
section whether the potential compensation is direct or indirect	609
and whether the compensation is paid to or retained by the	610
policyholder or sponsoring or endorsing entity or paid to or	611
retained by a third party, or an entity affiliated with the third	612
party by way of ownership, contract, or employment, at the	613
direction of the policyholder or sponsoring or endorsing entity.	614

(D) The notice required by this section shall be placed on or	615
accompany an application or enrollment form provided to	616
prospective insureds.	617

Sec. 3917.03. Any life insurance policy issued pursuant to	618
section 3917.01 of the Revised Code, except for a policy issued	619
pursuant to division (B) of section 3917.01 of the Revised Code,	620
may be extended to insure an employee's dependents or member's	621
dependents, as defined by the policy, or any class or classes of	622
dependents, subject to the following:	623

(A) The premium for the insurance shall be paid either from	624
the funds contributed by the employer, union, association, or	625
other person to whom the policy has been issued, or from funds	626
contributed by the covered persons, or from both. Except as	627
provided in division (B) of this section, a policy on which no	628
part of the premium for the dependent's coverage is derived from	629
funds contributed by the covered persons shall insure the	630
dependents of all eligible employees or members, or a class or	631
classes of dependents.	632

(B) A life insurer may exclude or limit the coverage on any	633
dependent as to whom evidence of individual insurability is not	634
satisfactory to the insurer.	635

Sec. 3917.06. NoExcept as provided in division (M) of this	636
section, no policy of group life insurance shall be issued or	637
delivered in this state until a copy of its form has been filed	638
with the superintendent of insurance and formally approved by the	639
superintendent; nor shall such policy be so issued or delivered	640
unless it contains in substance the following provisions or other	641
provisions, that in the opinion of the superintendent of insurance	642
are more favorable to the persons insured, or at least as	643
favorable to the persons insured and more favorable to the	644
policyholder:	645

(A) A provision that the policyholder is entitled to a grace	646
period of thirty-one days for the payment of any premiums due	647
except the first, during which grace period the death benefit	648
coverage shall continue in force, unless the policyholder has	649
given the insurer written notice of discontinuance in advance of	650
the date of discontinuance and in accordance with the terms of the	651
policy; the policy may provide that the policyholder is liable to	652
the insurer for the payment of a pro rata premium for the time the	653
policy was in force during such grace period;	654

(B) A provision that the policy is incontestable after two	655
years from its date of issue, except for nonpayment of premiums	656
and except for violation of the conditions of the policy relating	657
to military or naval service in time of war;. No statement made by	658
any individual insured under the policy relating to the	659
individual's insurability shall be used in contesting the validity	660
of the insurance, with respect to which the statement was made,	661
that has been in force prior to the contest for a period of two	662
years during the individual's life, unless the statement is	663
contained in a written instrument signed by the individual. This	664
division does not preclude the assertion at any time of defenses	665
based upon provisions in the policy that relate to eligibility for	666
coverage.	667

(C) A provision requiring that the policy anda copy of the	668
application submitted in connection therewith constitute the	669
entire contract between the partiesof the policyholder, if any,	670
be attached to the policy when issued, and that all statements	671
contained in such application are deemed, in the absence of fraud,	672
made by the policyholder and individuals insured shall be deemed	673
representations and not warranties, and that no such statement	674
made by any person insured shall be used in defense to a claim	675
under the policy, unless it is contained in a written application	676
any contest unless a copy of the instrument containing the	677
statement is furnished to the insured, or in the event of the	678
death or incapacity of the insured, to the insured's beneficiary	679
or personal representative;	680

(D) A provision setting forth the conditions, if any, under	681
which the insurer reserves the right to require an individual	682
eligible for insurance to furnish evidence of individual	683
insurability satisfactory to the insurer as a condition to part or	684
all of the individual's coverage;	685

(E) A provision for thespecifying an equitable adjustment of	686
the premium or the amount of insurance payablebenefits, or both,	687
to be made in the event of a misstatement of the age of an	688
employee or other person whose life is insured under a group life	689
policy;	690

(E) Except in the case of a policy described in division	691
(B)(4) of section 3917.01 of the Revised Code, a. The provision	692
shall contain a clear statement of the method of adjustment.	693

(F) A provision requiring that any sum becoming due by reason	694
of the death of the insured be payable to the beneficiary	695
designated by the insured. However, if the policy contains	696
conditions pertaining to family status, the beneficiary may be the	697
family member specified by the policy terms, subject to the	698
provisions of the policy in the event that there is no designated	699
beneficiary living at the time of the death of the insured as to	700
all or any part of the sum, and subject to any right reserved in	701
the policy by the insurer and set forth in the certificate to pay,	702
at the insurer's option, a part of the sum not exceeding two	703
thousand dollars to any beneficiary that the insurer believes is	704
equitably entitled to the amount by reason of having incurred	705
funeral or other expenses incident to the last illness or death of	706
the insured.	707

(G) A provision that the companyinsurer will issue to the	708
policyholder for delivery to each person whose life is insured	709
under such policy, an individuala certificate setting forth a	710
statement as to the insurance protection to which the person is	711
entitled, any dependent's coverage, to whom benefits are payable,	712
together withand the rights and conditions set forth in divisions	713
(H) to (K) of this section. The policyholder may issue a single	714
certificate for delivery to an insured employee or member if a	715
statement concerning any dependent's coverage is included in the	716
certificate.	717

(H)(1) A provision to the effect that in case ofif all or	718
any part of the insurance on an insured or an insured's dependents	719
ceases because of the termination of the employment for any reason	720
or of membership in the class or classes eligible for insurance	721
coverage under the policy, such person is entitled to have issued	722
to the person by the companyinsurer, without evidence of	723
insurability, and upon application made to the companyan	724
individual policy of life insurance without disability or	725
supplementary benefits, provided that application for the	726
individual policy is made, and the first premium is paid to the	727
insurer, within thirty-one days after such termination, and upon	728
the payment of the premium applicable to the class of risk to	729
which the person belongs and to the form and amount of the policy	730
at the person's then attained age, either a policy of life	731
insurance inprovided that all of the following conditions are	732
met:	733

(a) The individual policy is on any one of the forms	734
customarily issued by the company, except term insurance, in any	735
amount not in excess of the amount of the person's protection	736
under the group insurance policy at the time of the termination,	737
as the person elects or, if applicable, the coverage described in	738
division (B)(12) of section 3917.01 of the Revised Code;	739

(F)insurer to that age and for the amount applied for,	740
except that the group policy may exclude the option to elect term	741
insurance.	742

(b) The individual policy is in an amount not in excess of	743
the amount of life insurance that ceases because of termination,	744
less the amount of any life insurance for which the person is	745
eligible under the same or any other group policy within	746
thirty-one days after termination, provided that any amount of	747
life insurance that matures on or before the date of termination	748
as an endowment payable to the insured, whether in one sum,	749
installments, or in the form of an annuity, shall not, for	750
purposes of this division, be included in the amount that is	751
considered to cease because of termination.	752

(c) The premium on the individual policy is set at the	753
insurer's then customary rate applicable to the form and amount of	754
the individual policy, the individual's class of risk, and the	755
individual's age as of the effective date of the individual	756
policy.	757

(2) Subject to the conditions set forth in division (H)(1) of	758
this section, the conversion privilege is available to the	759
following individuals:	760

(a) A surviving dependent, if any, at the death of the	761
employee or member, with respect to the coverage under the group	762
policy that terminates by reason of the employee's or member's	763
death;	764

(b) A dependent of an employee or member upon termination of	765
the dependent's coverage, while the employee or member remains	766
insured under the group policy, by reason of the dependent ceasing	767
to be a dependent under the group policy.	768

(3) If the individual is not given notice of the right to	769
obtain individual coverage under this division at least fifteen	770
days prior to the expiration of the thirty-one-day conversion	771
period provided by division (H)(1) of this section then the	772
individual shall have an additional period to exercise that right.	773
This additional period shall extend for fifteen days after the	774
individual is given notice, but in no event shall the period	775
extend beyond sixty days after the expiration date of the period	776
provided in the policy. Written notice provided to the individual	777
or mailed by the policyholder to the last known address of the	778
individual, or mailed by the insurer to the last known address of	779
the individual furnished to the insurer by the policyholder,	780
constitutes notice for purposes of this division.	781

(4) Nothing contained in the division shall be construed to	782
continue any insurance beyond the expiration date of the period	783
provided in the policy.	784

(I) A provision that if the group policy terminates or is	785
amended so as to terminate the insurance of any class of insured	786
persons, every person insured thereunder at the date of such	787
termination whose insurance terminates, including an insured's	788
dependent, and who has been so insured for at least five years	789
prior to such termination date is entitled to have issued to the	790
person by the insurer an individual policy of life insurance,	791
subject to the same conditions and limitations as are provided by	792
division (E)(H) of this section, except that the group policy may	793
provide that the amount of such individual policy shall not exceed	794
the smaller of (1) the amount of the person's life insurance	795
protection ceasing because of the termination or amendment of the	796
group policy, less the amount of any life insurance for which the	797
person is or becomes eligible under any group policy issued or	798
reinstated by the same or another insurer within thirty-one days	799
after such termination, and (2) twoten thousand dollars;	800

(G)(J) A provision that if a person insured under the group	801
policy, or an insured's dependent, dies during the period within	802
which the person would have been entitled to have an individual	803
policy issued to the person in accordance with division (E)(H) or	804
(F)(I) of this section, and before such an individual policy has	805
become effective, the amount of life insurance which the person	806
would have been entitled to have issued to the person under such	807
individual policy shall be payable as a claim under the group	808
policy, whether or not application for the individual policy or	809
the payment of the first premium therefor has been made;	810

(H) A provision that to the group or class of persons	811
originally insured there shall be added from time to time all new	812
employees of the employer or other persons eligible to insurance	813
in such group or class;	814

(I) In the case of a policy issued to a labor union covering	815
all members of the union, a notice that the annual renewable term	816
premium depends upon the attained ages of the members in the group	817
and increases with advancing ages.	818

Policies of group life insurance, when issued in this state	819
by any company not organized under the laws of this state, may	820
contain, when issued, any provision required by the law of the	821
state, territory, or district of the United States under which the	822
company is organized; and policies issued in other states or	823
countries by companies organized in this state, may contain any	824
provision required or permitted by the laws of the state,	825
territory, district, or country in which the same are issued. Any	826
such policy may be issued or delivered in this state which in the	827
opinion of the superintendent contains provisions on any one or	828
more of the requirements of this section more favorable to the	829
policyholder or to the person whose life is insured under such	830
policy than such requirements.	831

The group life insurance policy together with any application	832
in connection therewith shall be available for inspection during	833
regular business hours at the office of the policyholder where	834
such policy is on file, by any beneficiary thereunder or by an	835
authorized representative of such beneficiary.	836

Except as provided in sections 3917.01 to 3917.06 of the	837
Revised Code, no contract of life insurance shall be made covering	838
a group in this state.	839

(K) Where active employment is a condition of insurance, a	840
provision that an insured may continue coverage during the	841
insured's total disability by timely payment to the policyholder	842
of that portion, if any, of the premium that would have been	843
required from the insured if the insured's total disability had	844
not occurred. The continuation shall be on a premium basis for a	845
period of six months after the date on which the insured's total	846
disability started, but not later than the earlier of either of	847
the following:	848

(1) The insurer approving of continuation of the coverage	849
under any disability provision that the group policy may contain;	850

(2) The discontinuance of the group life insurance policy.

851

(L) In the case of a life insurance policy insuring the lives	852
of debtors, a provision requiring that the insurer furnish to the	853
policyholder for delivery to each debtor insured under the policy	854
a certificate of insurance describing the coverage and specifying	855
that the death benefit first be applied to reduce or extinguish	856
the debtor's unpaid indebtedness.	857

(M)(1) Divisions (F) to (K) of this section do not apply to	858
group policies insuring the lives of debtors.	859

(2) With the exception of division (K) of section 3915.05 and	860
section 3915.052 of the Revised Code, Chapter 3915. of the Revised	861
Code does not apply to group policies.	862

(3) If a group policy is other than a term plan of insurance,	863
the policy shall contain a nonforfeiture provision or provisions,	864
which, in the opinion of the superintendent, are equitable to the	865
insureds and the policyholder. Nothing in this division shall be	866
construed to require group life insurance policies to contain the	867
same nonforfeiture provisions as are required for individual life	868
insurance policies.	869

(4)(a) If a group policy is other than a term plan of	870
insurance the policy shall contain a policy loan provision	871
authorizing insureds to borrow upon the policy, unless the loan	872
value of certificates issued under the policy is established by	873
federal law. The policy loan provision may include one or more of	874
the following conditions:	875

(i) The borrower has held a certificate under the policy for	876
a minimum period, not to exceed three years;	877

(ii) No premium on the policy is in default beyond the grace	878
period for payment;	879

(iii) A minimum loan amount, not to exceed one thousand	880
dollars;	881

(iv) The borrower accepts an adjustable interest rate charge,	882
not to exceed two per cent above the rate used to compute the cash	883
surrender value.	884

(b) For purposes of the policy loan provision, the loan value	885
of a certificate shall equal one of the following:	886

(i) Ninety per cent of the cash surrender value of the	887
certificate at the time that the loan is made, less any	888
outstanding indebtedness including any unpaid interest not already	889
deducted;	890

(ii) The cash surrender value of the certificate at the time	891
that the loan is made, less any outstanding indebtedness including	892
any unpaid interest not already deducted, less the amount needed	893
to pay the certificate's cost of insurance charges and expenses	894
for as long as three months after the time that the loan is made.	895

Sec. 3917.07.  No provision in section 3917.06 of the Revised	896
Code shall prohibit a person whose life is insured under any such	897
policy of group life insurance from making an assignment of all or	898
any part of histhe person's incidents of ownership under such	899
policy including specifically, but not by way of limitation, any	900
right to designate a beneficiary or beneficiaries thereunder and	901
any right to have an individual policy issued to himthe person in	902
accordance with division (E)(H) or (F)(I) of section 3917.06 of	903
the Revised Code. Subject to the terms of the policy relating to	904
assignment of incidents of ownership thereunder, such an	905
assignment by an insured, made either before or after the	906
effective date of this section, is valid for the purpose of	907
vesting in the assignee, in accordance with any provisions	908
included therein as to the time at which it is to be effective,	909
all of such incidents of ownership so assigned, but without	910
prejudice to the insurer on account of any payment it may make or	911
individual policy it may issue in accordance with division (E)(H)	912
or (F)(I) of section 3917.06 of the Revised Code prior to receipt	913
of notice of the assignment.	914

Section 2. That existing sections 9.90, 3917.01, 3917.06, and	915
3917.07 and section 3917.03 of the Revised Code are hereby	916
repealed.	917