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Sub. H. B. No. 193 As Reported by the House Insurance Committee
As Reported by the House Insurance Committee
126th General Assembly | Regular Session | 2005-2006 |
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Representatives Daniels, G. Smith, Fessler, Combs, Wolpert, C. Evans, Martin, Gibbs, D. Evans, Setzer, Barrett, Perry, DeBose, Boccieri, Hughes, Koziura
A BILL
To amend sections 9.90, 3917.01, 3917.06, and 3917.07, to enact new section 3917.03 and section 3917.02, and to repeal section 3917.03 of the Revised Code to permit the sale of group life insurance to specified groups and provide the Superintendent of Insurance with the discretion to authorize the sale of group life insurance to additional groups.
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 be amended and new section 3917.03 and section 3917.02 of the Revised Code be enacted to read as follows:
Sec. 9.90. (A) The governing board of any public
institution of higher education, including without limitation
state universities and colleges, community college districts,
university branch districts, technical college districts, and
municipal universities, or the board of education of any school
district, may, in addition to all other powers provided in the
Revised Code: (1) Contract for, purchase, or otherwise procure from an
insurer or insurers licensed to do business by the state of Ohio
for or on behalf of such of its employees as it may determine,
life insurance, or sickness, accident, annuity, endowment,
health, medical, hospital, dental, or surgical coverage and
benefits, or any combination thereof, by means of insurance plans
or other types of coverage, family, group or otherwise, and may
pay from funds under its control and available for such purpose
all or any portion of the cost, premium, or charge
for such insurance, coverage, or benefits. However, the governing
board, in addition to or as an alternative to the authority otherwise
granted by division (A)(1) of this section, may elect to procure
coverage for health care services, for or on behalf of such of its employees
as it may determine, by means of policies,
contracts, certificates, or agreements issued by at least two
health insuring corporations holding a certificate of authority
under Chapter 1751. of the Revised Code and may
pay from funds
under the governing board's control and available for such purpose all or
any portion of the cost of such coverage. (2) Make payments to a custodial account for investment in
regulated investment company stock for the purpose of providing
retirement benefits as described in section 403(b)(7) of the
Internal Revenue Code of 1954, as amended. Such stock shall be
purchased only from persons authorized to sell such stock in this
state. Any income of an employee deferred under divisions (A)(1)
and (2) of this section in a deferred compensation program
eligible for favorable tax treatment under the Internal Revenue
Code of 1954, as amended, shall continue to be included as
regular compensation for the purpose of computing the
contributions to and benefits from the retirement system of such
employee. Any sum so deferred shall not be included in the
computation of any federal and state income taxes withheld on
behalf of any such employee. (B) All or any portion of the cost, premium, or charge
therefor may be paid in such other manner or combination of
manners as the governing board or the school board may determine,
including direct payment by the employee in cases under division
(A)(1) of this section, and, if authorized in writing by the
employee in cases under division (A)(1) or (2) of this section,
by such governing board or school board with moneys made
available by deduction from or reduction in salary or wages or by
the foregoing of a salary or wage increase. Division (B)(7) of Nothing in
section 3917.01 and the last paragraph of or section 3917.06 of the
Revised Code shall not prohibit the issuance or purchase of group
life insurance authorized by this section by reason of payment of
premiums therefor by the governing board or the school board from
its funds, and such group life insurance may be so issued and
purchased if otherwise consistent with the provisions of sections
3917.01 to 3917.07 of the Revised Code.
Sec. 3917.01. (A) Group life insurance is that form of
life insurance covering not less than two employees with or
without medical examination, written under a As used in sections 3917.01 to 3917.06 of the Revised Code, the following forms of life insurance are group life insurance:
(A) A life insurance policy issued to the an
employer, or to a trustee the trustees of a trust created fund established by such an employer,
the premium on which is to be paid by the employer, by the
employer and employees jointly, or by such trustee out of funds
contributed by the employer or by the employer and employees
jointly, and insuring only all of the employer's employees
or all of any
classes thereof, determined by sex, age, or conditions pertaining
to the employment, for amounts of insurance based upon some plan
which will preclude individual selection, which employer or trustees shall be deemed the policyholder, to insure employees of the employer for the benefit of
persons other than the employer; but when the premium is to be
paid by the employer and employee jointly and the benefits of the
policy are offered to all eligible employees, not less than
seventy-five per cent of such employees may be so insured. Such
group, subject to all of the following requirements:
(1) All of the employees of the employer, or all of any class or classes of employees, are eligible for life insurance. The policy may provide that "employees" includes the employees of one or more subsidiary corporations and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietorships, or partnerships if the business of the employer and the affiliated corporations, proprietorships, or partnerships is under common control. The policy may provide that "employees" includes retired
employees of the employer and the officers, managers, former employees,
and retired employees of subsidiary or affiliated corporations
and the individual proprietors, partners, employees, and retired
employees of affiliated individuals and firms, when the business
of such subsidiary or affiliated corporations, firms, or
individuals is controlled by the common employer through stock
ownership, contract, or otherwise. This section does not define
as a group the lives covered by a policy issued on more than one
life which provides for payments upon the death of any one or
more or upon the death of each of the lives so insured, and upon
which the premium rates charged are computed on the same basis as
used by the issuing company on single life policies and upon its
regular forms of insurance. (B) As used in sections 3917.01 to 3917.06 of the Revised
Code, the following forms of life insurance are group life
insurance:
(1) Life insurance covering the members of one or more
companies, batteries, troops, battalions, divisions, or other
units of the national guard or naval militia of any state,
written under a policy issued to the commanding general of the
national guard or commanding officer of the naval militia, who is
the employer for the purposes of such sections, the premium on
which is to be paid by the members of such units for the benefit
of persons other than the employer; provided that when the
benefits of the policy are offered to all eligible members of a
unit of the national guard or naval militia, not less than
seventy-five per cent of the members of such a unit may be
insured;
(2) Life insurance covering the members of one or more
troops or other units of the state troopers or state police of
any state, written under a policy issued to the commanding
officer of the state troopers or state police who is the employer
for the purposes of such sections, the premium on which is to be
paid by the members of such units for the benefit of persons
other than the employer; provided that when the benefits of the
policy are offered to all eligible members of a unit of the state
troopers or state police, not less than seventy-five per cent of
the members of such a unit may be insured;
(3) Life insurance covering the members of any labor
union, written under a policy issued to such union which is the
employer for the purposes of such sections, the premium on which
is to be paid by the union or by the union and its members
jointly, and insuring only all of its members, who are actively
engaged in the same occupation, for amounts of insurance based
upon some plan which will preclude individual selection, for the
benefit of persons other than the union or its officials;
provided that in case the insurance policy is cancellable at the
end of any policy year at the option of the insurance company and
that the basis of premium rates may be changed by the insurance
company at the beginning of any policy year, all members of a
labor union may be insured; and provided that when the premium is
to be paid by the union and its members jointly and the benefits
are offered to all eligible members, not less than seventy-five
per cent of such members may be insured; and provided that when
members apply and pay for additional amounts of insurance, a
smaller percentage of members may be insured for such additional
amounts if they pass satisfactory medical examinations or submit
satisfactory evidence of insurability;
(4) Life insurance written under a directors of a corporate employer. A policy issued to insure the employees of a public body may provide that "employees" includes elected or appointed officials.
(2) The premium for the policy shall be paid either from the employer's funds or from funds contributed by the insured employees, or from both. Except as provided in division (A)(3) of this section, a policy for which no part of the premium is derived from funds contributed by the insured employees shall insure all eligible employees, except those employees who reject the coverage in writing.
(3) An insurer may exclude or limit the coverage on any employee as to whom evidence of individual insurability is not satisfactory to the insurer.
(4) A policy issued pursuant to section 3911.091 of the Revised Code is not subject to the requirements of this division.
(B) A life insurance policy issued to a
creditor, who or its parent holding company or to a trustee or trustees or agent designated by two or more creditors, which creditor, holding company, affiliate, trustee, trustees, or agent shall be deemed the policyholder, to insure debtors
of the creditor or creditors, subject to the following requirements: (a)(1) The debtors eligible for insurance under the policy
shall be all of the debtors of the creditor, excepting that no debtor is
eligible
unless
the indebtedness constitutes an obligation to repay that
is binding upon the debtor during the
debtor's lifetime at and from the date the insurance becomes effective
upon the debtor's life or creditors, or all of any class or classes of the debtors. The policy may provide that
"debtors" includes the all of the following:
(a) Borrowers of money or purchasers or lessees of goods, services, or property for which payment is arranged through a credit transaction;
(b) The debtors of one or more subsidiary corporations and the;
(c) The
debtors of one or more affiliated corporations, proprietors proprietorships, or partnerships
if the business of the
policyholder and of such the affiliated corporations, proprietors proprietorships, or
partnerships is under common control through stock ownership,
contract, or otherwise. (b)(2) The premium for the policy shall be paid by the
policyholder, either from the creditor's funds, or from charges
collected from the insured debtors, or from both. A policy on
which part or all of the premium is to be derived from the
collection from the insured debtors of identifiable charges not
required of uninsured debtors shall not include debtors under
obligations outstanding at its date of issue without evidence of
individual insurability unless at least seventy-five per cent of
the then eligible debtors elect to pay the required charges. A Except as provided in division (B)(3) of this section, a
policy on which no part of the premium is to be derived from the
collection of such identifiable charges must funds contributed by insured debtors specifically for the debtors' insurance shall insure all eligible
debtors, or all except any.
(3) An insurer may exclude any debtor as to whom evidence of individual
insurability is not satisfactory to the insurer. (c) The policy may be issued only if the group of eligible
debtors is then receiving new entrants at the rate of at least
one hundred persons yearly, or may reasonably be expected to
receive at least one hundred new entrants during the first policy
year, and continues to receive not less than one hundred new
entrants to the group yearly, and only if the policy reserves to
the insurer the right to require evidence of individual
insurability if less than seventy-five per cent of the new
entrants become insured. The policy may exclude from the classes
eligible for insurance classes of debtors determined by age.
(d) The amount of insurance on the life of any debtor may
be determined by the age of the debtor based upon a plan which
will preclude individual selection and shall at no time exceed
the amount owed by the debtor that is repayable in
installments to the creditor.
(e) The insurance shall be payable to the policyholder.
Such payment shall reduce or extinguish the unpaid indebtedness
of the debtor to the extent of such payment.
(5) Life insurance covering the members of any duly
organized corporation or association of veterans or veteran
society or association of the World War veterans, written under a
policy issued to such corporation, association, or society which
is the employer for the purpose of such sections, the premium on
which is to be paid by the corporation, association, society, and
its members jointly, and insuring all of its members who are
actively engaged in any occupation for amounts of insurance based
upon some plan which will preclude individual selection for the
benefit of persons other than the corporation, association, or
society or its officials; provided that when the premium is to be
paid by the corporation, association, or society and its members
jointly and the benefits are offered to all eligible members, not
less than seventy-five per cent of such members may be insured;
and provided that when members apply and pay for additional
amounts of insurance, a smaller percentage of members may be
insured for such additional amounts if they pass satisfactory
medical examinations or submit satisfactory evidence of
insurability;
(6) Life insurance covering the members of any
organization of agriculturists or horticulturists organized under
the co-operative laws of this state, written under a policy
issued to such co-operative association which is the employer for
the purpose of such sections, the premium on which is to be paid
by the association or by the association and its members jointly,
and insuring all of its members who are actively engaged in
agricultural or horticultural pursuits, for an amount of
insurance based upon some plan which will preclude individual
selection, and for the benefit of persons other than the
association or its officials; provided that when the premium is
to be paid by the corporation, association, or society and its
members jointly and the benefits are offered to all eligible
members, not less than seventy-five per cent of such members may
be insured; provided that when members apply and pay for
additional amounts of insurance, a smaller percentage of members
may be insured for such additional amounts if they pass
satisfactory medical examinations or submit satisfactory evidence
of insurability;
(7) Life insurance covering employees of a political
subdivision or district of this state, or of an educational or
other institution supported in whole or in part by public funds,
or of any classes thereof, determined by conditions pertaining to
employment, or of this state or any department or division
thereof, written under a policy issued to such political
subdivision, district, or institution, or the proper official or
board of this state or of such state department or division
thereof, which is the employer for the purpose of such sections,
the premium on which is to be paid by such employees, unless
otherwise provided by law, charter, or ordinance, for the benefit
of persons other than the employer; provided that when the
benefits of the policy are offered to all eligible employees of a
political subdivision or district of the state or of an
educational or other institution supported in whole, or in part
by public funds, or of this state or a state department or
division thereof, not less than seventy-five per cent of such
employees may be insured; and provided that when employees apply
and pay for additional amounts of insurance, a smaller percentage
of employees may be insured for such additional amounts if they
pass satisfactory medical examinations or submit satisfactory
evidence of insurability; and provided that upon acquisition by a
political subdivision of any privately owned property or
enterprise, the employees of which have been covered by a group
policy of life or other insurance as employees of such private
employer, such political subdivision and insurance company may
continue such contract in force upon similar conditions as the
last preceding private employer;
(8) Life insurance covering the members, or the members
and the employees of members of any duly organized association,
other than an association subject to any other provision of this
division, written under a policy issued to such association,
which association is the employer for the purpose of such
sections, the premium on which is to be paid by the insured
members or their employees, insuring members and their employees
for amounts of insurance based upon some plan which will preclude
individual selection except as provided in this section, for the
benefit of persons other than the association; provided the
association has been in existence for at least two years
immediately preceding the purchase of the insurance; provided
that there must be at least fifty insured members in any group;
and provided that the association has been organized and is
maintained in good faith for purposes other than that of
obtaining insurance;
(9) Life (4) The amount of insurance on the life of any debtor, at no time, shall exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor, except that insurance written in connection with open-end credit having a credit limit exceeding ten thousand dollars may be in an amount not exceeding the credit limit.
(5) The insurance may be payable to the creditor or any successor to the right, title, and interest of the creditor. The payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of the payment and any excess of the insurance shall be payable to the estate of the insured.
(6) Notwithstanding divisions (B)(1) to (5) of this section, insurance on agricultural credit transaction commitments may be written up to the amount of the loan commitment on a nondecreasing or level term plan. Insurance on educational credit transaction commitments may be written up to the amount of the loan commitment less the amount of any repayments made on the loan.
(C) A life insurance policy issued to a labor union or similar employee organization, which union or organization shall be deemed the policyholder, to insure members of the union or organization for the benefit of persons other than the union or organization or any of its officials, representatives, or agents, subject to all of the following requirements:
(1) All of the members of the union or organization, or all of any class or classes of the members, are eligible for insurance under the policy.
(2) The premium for the policy is paid either from funds of the union or organization or from funds contributed by the insured members specifically for the members' insurance, or from both. Except as provided in division (C)(3) of this section, a policy on which no part of the premium is derived from funds contributed by the insured members specifically for the members' insurance shall insure all eligible members, except those members who reject the coverage in writing.
(3) An insurer may exclude or limit the coverage on any member as to whom evidence of individual insurability is not satisfactory to the insurer.
(D) A life insurance policy issued to a trust or to the trustees of a trust fund
established jointly by one or more employers in the same
industry, on the one hand, and or adopted by two or more employees, or by one or more labor unions
representing as bargaining agents employees of such employers, on
the other hand, or by two or similar employee organizations, or by one or more employers in the same industry,
or by two and one or more labor unions or similar employee organizations, which trust or trustees shall be deemed
the policyholder, to insure employees of the employers or members
of the unions or similar employee organizations for the benefit of persons other than the employers or
the unions or the trustees organizations, subject to the following
requirements: (a)(1) The persons eligible for such insurance shall be all
of the employees of the employers, or all of the members of the
unions or organizations, or all of any class of such employees determined by sex,
age, or conditions pertaining to their employment, or to
membership in the unions, or to any or all of them or classes of the employees or members. The policy
may provide that "employees" includes the retired employees of
the employer and the officers, managers, employees, and retired
employees of one or more subsidiary or affiliated corporations and the employees,
individual proprietors, and partners, employees, and retired
employees of affiliated individuals and firms, when the business
of such subsidiary or of one or more affiliated corporations, firms, or
individuals is controlled by the common employer through stock
ownership, contract, or otherwise proprietorships, or partnerships if the business of the employer and of the affiliated corporations, proprietorships, or partnerships is under common control. The policy may provide that
"employees" includes the individual proprietor or partners if the
employer is an individual proprietor proprietorship or a partnership. The policy
may provide that "employees" includes retired employees, former employees, and directors of a corporate employer. The policy may provide that "employees" includes the trustees or their
employees, or both, if their duties are principally connected
with such the trusteeship.
(b)(2) The premium for the policy shall be paid by the
trustees, either wholly from funds contributed by the employer or employers
of the insured persons, or partly from such funds and partly from
funds contributed by the insured employees. If part of the
premium is to be derived from funds contributed by the insured
employees, then such policy may be placed in force only if it
covers at least seventy-five per cent of the then eligible
employees. A or by the union or unions or similar employee organizations, or by both, or from funds contributed by the insured persons or from both the insured persons and the employers or unions or similar employee organizations. Except as provided in division (D)(3) of this section, a policy on which no part of the premium is derived
from funds contributed by the insured employees persons specifically for their insurance must insure all
eligible employees.
(c) Any policy must insure at least two persons at date of
issue.
(d) The amounts of insurance under the policy must be
based upon some plan precluding individual selection by the
insured persons or the policyholder or the employers or the
unions or the trustees.
(10) Life insurance covering the members of a credit
union, which shall be deemed to be the employer for the purposes
of this section, the premium on which is to be paid by the credit
union or by the credit union and its members jointly, and
insuring all of its eligible members for amounts of insurance not
in excess of the share balance as to each member, and for the
benefit of persons other than the credit union or its officers;
provided that in the determination of the eligibility of members
there may be classifications and limitations based upon age;
provided also that when the premium is to be paid by the credit
union and its members jointly and the benefits are offered to all
eligible members, not less than seventy-five per cent of such
members may be so insured; provided also that in obtaining such
insurance, the officers of the credit union shall consider
proposals from any licensed insurer; provided also that members
may be required to provide evidence of insurability satisfactory
to the insurer.
(11) Life insurance covering the members of any duly
organized corporation or association of members of the Ohio
national guard, the Ohio naval militia, and the Ohio military
reserve, which shall have been in existence for at least two
years immediately preceding the purchase of such insurance,
written under a policy issued to such corporation or association,
which corporation or association is the employer for the purpose
of such sections, the premium on which is to be paid by the
insured members, insuring members for amounts of insurance based
upon some plan which will preclude individual selection, except
as provided in this section, for the benefit of persons other
than the corporation or association, provided that there must be
at least fifty insured members in any group, and provided further
that unless seventy-five per cent of all members or one thousand
members, whichever is the lesser number, are insured, each member
must pass a satisfactory medical examination in order to be
insured; and provided that, when members apply and pay for
additional amounts of insurance, they may be insured for such
additional amounts if they pass satisfactory medical examinations
or submit satisfactory evidence of insurability persons, except those persons who reject the coverage in writing.
(3) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.
(E) A life insurance policy issued to an association or to a trust or the trustees of a fund established, created, or maintained for the benefit of members of one or more associations, which association, trust or trustee, or an agent, shall be deemed the policyholder, subject to all of the following requirements:
(1) The association or associations have at the outset a minimum of one hundred persons, have been organized and maintained in good faith for purposes other than that of obtaining insurance, have been in active existence for at least two years, and have a constitution and bylaws providing for all of the following:
(a) The association or associations shall hold regular meetings not less than annually to further purposes of the members.
(b) The association or associations, except for credit unions, shall collect dues or solicit contributions from members.
(c) The members of the association or associations shall have voting privileges and representation on the governing board and committees.
(2) The policy is subject to all of the following requirements:
(a) The policy may insure one or more of the members of the association or associations, employees of the association or associations, or employees of members, or all of any class or classes of the employees or members of the association or associations, and employees of the members of the association or associations, for the benefit of persons other than an employee's employer.
(b) The premium for the policy is paid from funds contributed by the association or associations, or by employer members, or by both, or from funds contributed by the covered members or employees or from both the covered members and employees and the association, associations, or employer members.
(c) Except as provided in division (E)(3) of this section, a policy on which no part of the premium is derived from funds contributed by the covered members and employees specifically for the covered members' and employees' insurance shall insure all eligible members and employees, except those who reject the coverage in writing.
(3) An insurer may exclude or limit the coverage on any member or employee as to whom evidence of individual insurance is not satisfactory to the insurer.
(F) A life insurance policy issued to a credit union or to a trustee or trustees or agent designated by two or more credit unions, which credit union, trustee, trustees, or agent shall be deemed the policyholder, to insure the members of the credit union or credit unions for the benefit of persons other than the credit union or credit unions, trust or trustees, or agents or officials of the credit union or credit unions or trust, subject to all of the following requirements:
(1) All of the members of the credit union or credit unions, or all of any class or classes of the members, are eligible for insurance.
(2) The premium for the policy is paid by the policyholder from the credit union's funds and except as provided in division (F)(3) of this section shall insure all eligible members.
(3) An insurer may exclude or limit the coverage on any member as to whom evidence of individual insurability is not satisfactory to the insurer. (12)(G) Life insurance that is written under a policy
issued to a trustee under a trust established by an insurer for
the purpose of providing continued group life insurance coverage
to those former employees,
former members, or former members and the employees of such members, and their
spouses and dependent children dependents,
previously covered under policies of group life insurance issued
by the insurer to employers or trustees pursuant to
division (A) of this section, to associations pursuant to division
(B)(8)(D) of this section, or to trustees pursuant to division
(B)(9)(E) of this section, or to groups pursuant to division (I) of this section, and
that is evidenced by the issuance of a certificate of insurance or other evidence of insurance
to such former employees or members as required by section 3917.06 of the Revised Code; provided that the amount of the continued
life
insurance coverage made available to a former employee or member and to
the employee's or member's spouse and dependents shall not exceed the amount
of the group life insurance coverage previously provided to
the employee or member and the employee's or member's eligible dependents at
the time
of the
employee's separation from employment or the member's termination of
membership.
(13)(H) Life insurance covering the members of a workforce actively engaged in an occupation for, and performing services on behalf of, a duly organized corporation, limited liability company, partnership, proprietor, or a similar organization, whose members are not employees of the organization, written under a policy issued to the organization, which organization is the members' employer for this purpose, the premium on which is to be paid by the organization or by the organization and the members jointly, insuring members for amounts of insurance based upon some plan which will preclude individual selection, for the benefit of persons other than the organization; provided, that when the premium is to be paid by the organization and its members jointly and the benefits are offered to all eligible members, not less than seventy-five per cent of the members may be so insured; provided also that members may be required to furnish evidence of insurability satisfactory to the insurer. Life insurance meeting this definition may also cover the organization's employees at the option of the organization.
(C) Any policy issued pursuant to this section, except a
policy issued to a creditor pursuant to division (B)(4) of this
section, may be extended, in the form of group term life
insurance only, to insure the spouse and dependent children of an
insured employee or member, or any class or classes thereof,
subject to the following requirements:
(1) The premiums for the group term life insurance shall
be paid by the policyholder, either from the employer, union or
association funds, or from funds contributed by the employer,
union, or association, or from funds contributed by the insured
employee or member, or from both.
(2) The amounts of insurance under the policy must be
based upon some plan precluding individual selection either by
the insured employee or member or by the policyholder.
(3) Upon termination of the group term life insurance with
respect to the spouse of any insured employee or member by reason
of such person's termination of employment or membership or
death, the spouse insured pursuant to this section shall have the
same conversion rights as to the group term life insurance on the
spouse's life as is provided for the insured employee or
member.
(4) Only one certificate need be issued for delivery to an
insured employee or member if a statement concerning any
dependent's coverage is included in such certificate.
(I)(1) A life insurance policy covering the members of a group other than one listed in divisions (A) to (H) of this section, subject to the superintendent finding all of the following:
(a) The issuance of the policy is not contrary to the best interest of the public.
(b) The issuance of the policy would result in economies of acquisition or administration.
(c) The policy provides benefits that are reasonable in relation to the premiums charged.
(2) An insurer shall not offer group life insurance in this state under a policy issued in another state unless the superintendent, or the insurance regulatory authority of another state with requirements substantially similar to the requirements set forth in division (I)(1) of this section, makes a determination that the requirements in division (I)(1) of this section have been met.
(3) The premium for a life insurance policy under this division is paid either from the policyholder's funds or from funds contributed by the insured members, or from both, and except as provided in division (I)(4) of this section, the policy must insure all eligible members except those members who reject the coverage in writing.
(4) An insurer may exclude or limit the coverage on any member as to whom evidence of individual insurability is not satisfactory to the insurer.
Sec. 3917.02. (A) As used in this section:
(1) "Direct response solicitation" means a solicitation through a sponsoring or endorsing entity through the mail, telephone, or other mass communication media.
(2) "Sponsoring or endorsing entity" means an organization that has arranged for the offering of a program of insurance in a manner that communicates that eligibility for participation in the program is dependent upon affiliation with the organization or that the organization encourages participation in the program.
(B) With respect to a program of life insurance that, if issued on a group basis, would not qualify as a policy of group life insurance under divisions (A) to (H) of section 3917.01 of the Revised Code, the insurer shall distribute a written notice to prospective insureds that compensation will or may be paid, if compensation of any kind will or may be paid, to one of the following persons:
(1) A policyholder, or sponsoring or endorsing entity, in the case of a group policy;
(2) A sponsoring or endorsing entity in the case of individual, blanket, or franchise policies marketed by means of a direct response solicitation.
(C) The insurer shall distribute the notice required by this section whether the potential compensation is direct or indirect and whether the compensation is paid to or retained by the policyholder or sponsoring or endorsing entity or paid to or retained by a third party, or an entity affiliated with the third party by way of ownership, contract, or employment, at the direction of the policyholder or sponsoring or endorsing entity.
(D) The notice required by this section shall be placed on or accompany an application or enrollment form provided to prospective insureds.
Sec. 3917.03. Any life insurance policy issued pursuant to section 3917.01 of the Revised Code, except for a policy issued pursuant to division (B) of section 3917.01 of the Revised Code, may be extended to insure an employee's dependents or member's dependents, as defined by the policy, or any class or classes of dependents, subject to the following:
(A) The premium for the insurance shall be paid either from the funds contributed by the employer, union, association, or other person to whom the policy has been issued, or from funds contributed by the covered persons, or from both. Except as provided in division (B) of this section, a policy on which no part of the premium for the dependent's coverage is derived from funds contributed by the covered persons shall insure the dependents of all eligible employees or members, or a class or classes of dependents.
(B) A life insurer may exclude or limit the coverage on any dependent as to whom evidence of individual insurability is not satisfactory to the insurer.
Sec. 3917.06. No Except as provided in division (M) of this section, no policy of group life insurance shall be
issued or delivered in this state until a copy of its form has
been filed with the superintendent of insurance and formally
approved by the superintendent; nor shall such policy be so
issued or delivered unless it contains in substance the following provisions or other provisions, that in the opinion of the superintendent of insurance are more favorable to the persons insured, or at least as favorable to the persons insured and more favorable to the policyholder: (A) A provision that the policyholder is entitled to a
grace period of thirty-one days for the payment of any premiums
due except the first, during which grace period the death benefit
coverage shall continue in force, unless the policyholder has
given the insurer written notice of discontinuance in advance of
the date of discontinuance and in accordance with the terms of
the policy; the policy may provide that the policyholder is
liable to the insurer for the payment of a pro rata premium for
the time the policy was in force during such grace period; (B) A provision that the policy is incontestable after two
years from its date of issue, except for nonpayment of premiums
and except for violation of the conditions of the policy relating
to military or naval service in time of war;. No statement made by any individual insured under the policy relating to the individual's insurability shall be used in contesting the validity of the insurance, with respect to which the statement was made, that has been in force prior to the contest for a period of two years during the individual's life, unless the statement is contained in a written instrument signed by the individual. This division does not preclude the assertion at any time of defenses based upon provisions in the policy that relate to eligibility for coverage. (C) A provision requiring that the policy and a copy of the application
submitted in connection therewith constitute the entire contract
between the parties of the policyholder, if any, be attached to the policy when issued, and that all statements contained in such
application are deemed, in the absence of fraud, made by the policyholder and individuals insured shall be deemed representations
and not warranties, and that no such statement made by any person insured shall be used in
defense to a claim under the policy, unless it is contained in a
written application any contest unless a copy of the instrument containing the statement is furnished to the insured, or in the event of the death or incapacity of the insured, to the insured's beneficiary or personal representative; (D) A provision setting forth the conditions, if any, under which the insurer reserves the right to require an individual eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of the individual's coverage;
(E) A provision for the specifying an equitable adjustment of the
premium or the amount of insurance payable benefits, or both, to be made in the event of a
misstatement of the age of an employee or other person whose life
is insured under a group life policy; (E) Except in the case of a policy described in division
(B)(4) of section 3917.01 of the Revised Code, a. The provision shall contain a clear statement of the method of adjustment.
(F) A provision requiring that any sum becoming due by reason of the death of the insured be payable to the beneficiary designated by the insured. However, if the policy contains conditions pertaining to family status, the beneficiary may be the family member specified by the policy terms, subject to the provisions of the policy in the event that there is no designated beneficiary living at the time of the death of the insured as to all or any part of the sum, and subject to any right reserved in the policy by the insurer and set forth in the certificate to pay, at the insurer's option, a part of the sum not exceeding two thousand dollars to any beneficiary that the insurer believes is equitably entitled to the amount by reason of having incurred funeral or other expenses incident to the last illness or death of the insured.
(G) A provision that
the company insurer will issue to the policyholder for delivery to each
person whose life is insured under such policy, an individual a
certificate setting forth a statement as to the insurance
protection to which the person is entitled, any dependent's coverage, to whom benefits are payable, together with and the rights and conditions set forth in divisions (H) to (K) of this section. The policyholder may issue a single certificate for delivery to an insured employee or member if a statement concerning any dependent's coverage is included in the certificate.
(H)(1) A provision to the effect that in case of if all or any part of the insurance on an insured or an insured's dependents ceases because of the termination of
the employment for any reason or of membership in the class or classes
eligible for insurance coverage under the policy, such person is entitled
to have issued to the person by the company insurer, without
evidence of insurability, and upon application made to the company an individual policy of life insurance without disability or supplementary benefits, provided that application for the individual policy is made, and the first premium is paid to the insurer, within
thirty-one days after such termination, and upon the payment of
the premium applicable to the class of risk to which the
person belongs and to the form and amount of the policy at
the person's then attained age, either a policy of life
insurance in provided that all of the following conditions are met:
(a) The individual policy is on any one
of the forms
customarily issued by the company, except term insurance, in any
amount not in excess of the amount of the person's
protection under the group insurance policy at the time of
the termination,
as the person elects or, if applicable, the coverage
described in division (B)(12) of section 3917.01 of the Revised Code; (F) insurer to that age and for the amount applied for, except that the group policy may exclude the option to elect term insurance.
(b) The individual policy is in an amount not in excess of the amount of life insurance that ceases because of termination, less the amount of any life insurance for which the person is eligible under the same or any other group policy within thirty-one days after termination, provided that any amount of life insurance that matures on or before the date of termination as an endowment payable to the insured, whether in one sum, installments, or in the form of an annuity, shall not, for purposes of this division, be included in the amount that is considered to cease because of termination.
(c) The premium on the individual policy is set at the insurer's then customary rate applicable to the form and amount of the individual policy, the individual's class of risk, and the individual's age as of the effective date of the individual policy.
(2) Subject to the conditions set forth in division (H)(1) of this section, the conversion privilege is available to the following individuals:
(a) A surviving dependent, if any, at the death of the employee or member, with respect to the coverage under the group policy that terminates by reason of the employee's or member's death;
(b) A dependent of an employee or member upon termination of the dependent's coverage, while the employee or member remains insured under the group policy, by reason of the dependent ceasing to be a dependent under the group policy.
(3) If the individual is not given notice of the right to obtain individual coverage under this division at least fifteen days prior to the expiration of the thirty-one-day conversion period provided by division (H)(1) of this section then the individual shall have an additional period to exercise that right. This additional period shall extend for fifteen days after the individual is given notice, but in no event shall the period extend beyond sixty days after the expiration date of the period provided in the policy. Written notice provided to the individual or mailed by the policyholder to the last known address of the individual, or mailed by the insurer to the last known address of the individual furnished to the insurer by the policyholder, constitutes notice for purposes of this division.
(4) Nothing contained in the division shall be construed to continue any insurance beyond the expiration date of the period provided in the policy.
(I) A provision that if the group policy terminates or is
amended so as to terminate the insurance of any class of insured
persons, every person insured thereunder at the date of such
termination whose insurance terminates, including an insured's dependent, and who has been so
insured for at least five years prior to such termination date is
entitled to have issued to the person by the insurer an
individual policy of life insurance, subject to the same conditions and limitations as are
provided by division (E)(H) of this section, except that the group
policy may provide that the amount of such individual policy
shall not exceed the smaller of (1) the amount of the person's
life insurance protection ceasing because of the termination
or amendment of the group policy, less the amount of any life
insurance for which the person is or becomes eligible under
any group
policy issued or reinstated by the same or another insurer within
thirty-one days after such termination, and (2) two ten thousand
dollars; (G)(J) A provision that if a person insured under the group
policy, or an insured's dependent, dies during the period within which the person would
have been entitled to have an individual policy issued to the
person in accordance with division (E)(H) or (F)(I) of this section, and before
such an
individual policy has become effective, the amount of life
insurance which the person would have been entitled to have
issued to the person under such individual policy shall be
payable as a claim under the group policy, whether or not application for the
individual policy or the payment of the first premium therefor has been
made;
(H) A provision that to the group or class of persons
originally insured there shall be added from time to time all new
employees of the employer or other persons eligible to insurance
in such group or class;
(I) In the case of a policy issued to a labor union
covering all members of the union, a notice that the annual
renewable term premium depends upon the attained ages of the
members in the group and increases with advancing ages.
Policies of group life insurance, when issued in this state
by any company not organized under the laws of this state, may
contain, when issued, any provision required by the law of the
state, territory, or district of the United States under which
the company is organized; and policies issued in other states or
countries by companies organized in this state, may contain any
provision required or permitted by the laws of the state,
territory, district, or country in which the same are issued.
Any such policy may be issued or delivered in this state which in
the opinion of the superintendent contains provisions on any one
or more of the requirements of this section more favorable to the
policyholder or to the person whose life is insured under such
policy than such requirements.
The group life insurance policy together with any
application in connection therewith shall be available for
inspection during regular business hours at the office of the
policyholder where such policy is on file, by any beneficiary
thereunder or by an authorized representative of such
beneficiary.
Except as provided in sections 3917.01 to 3917.06 of the Revised Code, no
contract of life insurance
shall be made covering a group in this state.
(K) Where active employment is a condition of insurance, a provision that an insured may continue coverage during the insured's total disability by timely payment to the policyholder of that portion, if any, of the premium that would have been required from the insured if the insured's total disability had not occurred. The continuation shall be on a premium basis for a period of six months after the date on which the insured's total disability started, but not later than the earlier of either of the following:
(1) The insurer approving of continuation of the coverage under any disability provision that the group policy may contain;
(2) The discontinuance of the group life insurance policy.
(L) In the case of a life insurance policy insuring the lives of debtors, a provision requiring that the insurer furnish to the policyholder for delivery to each debtor insured under the policy a certificate of insurance describing the coverage and specifying that the death benefit first be applied to reduce or extinguish the debtor's unpaid indebtedness.
(M)(1) Divisions (F) to (K) of this section do not apply to group policies insuring the lives of debtors.
(2) With the exception of division (K) of section 3915.05 and section 3915.052 of the Revised Code, Chapter 3915. of the Revised Code does not apply to group policies.
(3) If a group policy is other than a term plan of insurance, the policy shall contain a nonforfeiture provision or provisions, which, in the opinion of the superintendent, are equitable to the insureds and the policyholder. Nothing in this division shall be construed to require group life insurance policies to contain the same nonforfeiture provisions as are required for individual life insurance policies. (4)(a) If a group policy is other than a term plan of insurance the policy shall contain a policy loan provision authorizing insureds to borrow upon the policy, unless the loan value of certificates issued under the policy is established by federal law. The policy loan provision may include one or more of the following conditions: (i) The borrower has held a certificate under the policy for a minimum period, not to exceed three years;
(ii) No premium on the policy is in default beyond the grace period for payment; (iii) A minimum loan amount, not to exceed one thousand dollars;
(iv) The borrower accepts an adjustable interest rate charge, not to exceed two per cent above the rate used to compute the cash surrender value.
(b) For purposes of the policy loan provision, the loan value of a certificate shall equal one of the following:
(i) Ninety per cent of the cash surrender value of the certificate at the time that the loan is made, less any outstanding indebtedness including any unpaid interest not already deducted;
(ii) The cash surrender value of the certificate at the time that the loan is made, less any outstanding indebtedness including any unpaid interest not already deducted, less the amount needed to pay the certificate's cost of insurance charges and expenses for as long as three months after the time that the loan is made.
Sec. 3917.07. No provision in section 3917.06 of the Revised Code shall
prohibit a person whose life is insured under any such policy of group life
insurance from making an assignment of all or any part of his the
person's incidents of ownership under such policy including specifically,
but not by way of limitation, any right to designate a beneficiary or
beneficiaries thereunder and any right to have an individual policy issued to
him the person in accordance with
division (E)(H) or (F)(I) of section 3917.06 of the Revised Code. Subject to the
terms of the policy relating to assignment of incidents of ownership
thereunder, such an assignment by an insured, made either before or after the
effective date of this section, is valid for the purpose of vesting in the
assignee, in accordance with any provisions included therein as to the time at
which it is to be effective, all of such incidents of ownership so assigned,
but without prejudice to the insurer on account of any payment it may make or
individual policy it may issue in accordance with division (E)(H) or (F)(I) of
section 3917.06 of the Revised Code prior to receipt of notice of the
assignment.
Section 2. That existing sections 9.90, 3917.01, 3917.06, and 3917.07 and section 3917.03 of the Revised Code are hereby repealed.
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