GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

H	1 

HOUSE BILL 841

Short Title:  Group Life Insurance.	(Public)
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Sponsors: Representative Beall.
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Referred to:  Commerce.
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April 16, 1991

A BILL TO BE ENTITLED
AN ACT TO AFFECT GROUP LIFE INSURANCE.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 58-58-135(5) reads as rewritten:
"(5)	A policy issued to an association, which association shall be deemed the policyholder, to insure members of such association for the benefit of persons other than the association or any of its officials, representatives or agents, subject to the following requirements:
a.	Such association shall have had an active existence for at least two years immediately preceding the purchase of such insurance, shall have been formed for purposes other than procuring insurance and shall not derive its funds principally from contributions of insured members toward the payment of premiums for the insurance.
b.	The members eligible for insurance under the policy shall be all of the members of the association or all of any class or classes thereof determined by conditions pertaining to their employment, or the membership in the association, or both.  The policy may provide that the term "members" shall include the employees of members, if their duties are principally connected with the member's business or profession.
c.	The premium for the policy shall be paid by the policyholder, either wholly from the association's funds, or partly from such funds and partly from funds contributed by the insured members specifically for their insurance.  No policy may be issued on which the entire premium is to be derived from funds contributed by the insured members specifically for their insurance, nor if the Commissioner finds that the rate of such contributions will exceed the maximum rate customarily charged employees insured under like group life insurance policies issued in accordance with the provisions of subdivision (1).  A policy on which part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed in force provided the group is structured on an actuarially sound basis.  A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
d.	The policy must cover at least 25 members at date of issue.
e.	The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members or by the association."
Sec. 2.  This act is effective upon ratification.