[Rev. 11/21/2013 1:11:57
PM--2013]
CHAPTER 688B - GROUP LIFE INSURANCE
NRS 688B.010 Short
title; scope.
NRS 688B.020 “Wholesale
life insurance” defined.
NRS 688B.030 Group
life insurance prohibited unless approved by Commissioner; exempt policies;
exclusion or limitation of coverage; applicability.
NRS 688B.040 Provisions
required in group contracts.
NRS 688B.050 Grace
period.
NRS 688B.060 Incontestability.
NRS 688B.070 Provisions
required in policy of group life insurance.
NRS 688B.080 Insurability.
NRS 688B.090 Misstatement
of age.
NRS 688B.100 Payment
of benefits.
NRS 688B.110 Certificate:
Filing; approval.
NRS 688B.120 Conversion
on termination of eligibility.
NRS 688B.130 Conversion
on termination of policy.
NRS 688B.140 Death
pending conversion.
NRS 688B.150 Information
to debtor.
NRS 688B.160 Notice
as to right of conversion.
NRS 688B.170 Readjustment
of premium.
NRS 688B.180 Application
of dividends; rate reductions.
NRS 688B.190 Proceeds
of benefits to be paid within 30 days after death of insured.
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NRS 688B.010 Short title; scope.
1. This chapter may be known and cited as
the Group Life Insurance Law.
2. This chapter applies only to group life
insurance and wholesale life insurance.
3. This chapter does not apply to any
group life insurance contract entered into or issued prior to January 1, 1972,
or to any extensions, renewals or modifications thereof or amendments thereto
whenever made.
(Added to NRS by 1971, 1746)
NRS 688B.020 “Wholesale life insurance” defined.
1. As used in this Code, “wholesale life
insurance” is that plan of life insurance, other than salary savings life
insurance or pension trust insurance and annuities, issued to:
(a) Three or more employees of any corporation,
copartnership or individual employer or any governmental corporation, agency or
department thereof; or
(b) Ten or more members, employees or employees
of members of any trade or professional association, or of a labor union, or of
any association of members in the same or related occupations, profession or
industry having had an active existence for at least 2 years, where such
association or union has a constitution or bylaws and is formed in good faith
for purposes other than that of obtaining insurance,
Ê where such
persons, with or without their dependents are issued the same form of an
individual policy on the plan, varying only as to amounts of coverage applied
for by such persons and under an arrangement whereby the premiums on such
policies may be paid to the insurer periodically by the employer, with or
without payroll deductions, or by the insured or association or union for its
members, or by some designated person acting on behalf of such employer,
association or union. The term “employees” as used in this section shall be
deemed to include the officers, managers, employees and retired employees of
the employer and the individual proprietor or partners if the employer is an individual
or partnership.
2. Each policy issued under this section
shall provide that the coverage shall terminate when the insured individual no
longer qualifies for such policy under this section; but the policy may provide
that it may be continued in force or be replaced with another policy if the
premium, benefits and other relevant factors of the continued or replacement
policy are the same as those of a similar individual policy not issued under or
pursuant to this section.
(Added to NRS by 1971, 1746)
NRS 688B.030 Group life insurance prohibited unless approved by Commissioner;
exempt policies; exclusion or limitation of coverage; applicability.
1. Except as otherwise provided in this
section, no policy of group life insurance may be delivered or issued for
delivery in this State to a group which was formed for the purpose of
purchasing one or more policies of group life insurance.
2. A policy of group life insurance may be
delivered to a group described in subsection 1 if the Commissioner approves the
issuance. The Commissioner must not grant approval unless the Commissioner
finds that:
(a) The benefits of the policy are reasonable in
relation to the premiums charged; and
(b) The group to which the policy is issued is
organized and operated in a fiscally sound manner.
3. The provisions of subsection 1 do not
apply to a policy of group life insurance which is delivered or issued for
delivery in this State to a group whose members:
(a) Are related by blood, marriage or legal
adoption;
(b) Have a common interest through ownership of a
business enterprise or a substantial legal interest or equity therein, and who
are actively engaged in the management thereof; or
(c) Otherwise have an insurable interest in each
other’s lives.
4. An insurer may exclude or limit the
coverage in a policy issued pursuant to this section of any person as to whom
evidence of insurability is not satisfactory to the insurer.
5. The provisions of this section apply to
the offering in this State of a policy issued in another state.
(Added to NRS by 1971, 1747; A 1987, 118)
NRS 688B.040 Provisions required in group contracts. No
policy of group life insurance shall be delivered in this State unless it
contains in substance the provisions set forth in NRS
688B.040 to 688B.150, inclusive, or provisions
which in the opinion of the Commissioner are more favorable to the persons
insured, or at least as favorable to the persons insured and more favorable to
the policyholder; except:
1. NRS 688B.100
to 688B.140, inclusive, do not apply to policies
issued to a creditor to insure debtors of such creditor;
2. The standard provisions required for
individual life insurance policies do not apply to group life insurance
policies; and
3. If the group life insurance policy is
on a plan of insurance other than the term plan, it shall contain a
nonforfeiture provision or provisions which in the opinion of the Commissioner
is or are equitable to the insured persons and to the policyholder; but nothing
in this subsection shall be construed to require that group life insurance
policies contain the same nonforfeiture provisions as are required for
individual life insurance policies.
(Added to NRS by 1971, 1747)
NRS 688B.050 Grace period. The
group life insurance policy shall contain a provision that the policyholder is
entitled to a grace period of 31 days for the payment of any premium 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 shall be
liable to the insurer for the payment of a pro rata premium for the time the
policy was in force during such grace period.
(Added to NRS by 1971, 1747)
NRS 688B.060 Incontestability. The
group life insurance policy shall contain a provision that the validity of the
policy shall not be contested, except for nonpayment of premium, after it has
been in force for 2 years from its date of issue; and that no statement made by
any person insured under the policy relating to the insurability of the person
shall be used in contesting the validity of the insurance with respect to which
such statement was made after such insurance has been in force prior to the
contest for a period of 2 years during such person’s lifetime nor unless it is
contained in a written instrument signed by the person.
(Added to NRS by 1971, 1748)
NRS 688B.070 Provisions required in policy of group life insurance. The group life insurance policy shall contain
a provision:
1. That a copy of the application, if any,
of the policyholder shall be attached to the policy when issued and become a
part of the contract;
2. That all statements made by the
policyholder or by the persons insured shall be deemed representations and not
warranties; and
3. That no statement made by any person
insured shall be used in any contest unless a copy of the instrument containing
the statement is or has been furnished to such person or to the beneficiary of
the person.
(Added to NRS by 1971, 1748)
NRS 688B.080 Insurability. The
group life insurance policy shall contain a provision setting forth the
conditions, if any, under which the insurer reserves the right to require a
person eligible for insurance to furnish evidence of individual insurability
satisfactory to the insurer as a condition to part or all of the coverage of
the person.
(Added to NRS by 1971, 1748)
NRS 688B.090 Misstatement of age. The
group life insurance policy shall contain a provision specifying an equitable
adjustment of premiums or of benefits or both to be made if the age of a person
insured has been misstated, such provision to contain a clear statement of the
method of adjustment to be used.
(Added to NRS by 1971, 1748)
NRS 688B.100 Payment of benefits. The
group life insurance policy shall contain a provision that any sum becoming due
by reason of the death of the person insured shall be payable to the
beneficiary designated by the person insured, subject to the provision of the
policy if there is no designated beneficiary, as to all or any part of such
sum, living at the death of the person insured, and subject to any right
reserved by the insurer in the policy and set forth in the certificate to pay
at its option a part of such sum not exceeding $500 to any person appearing to
the insurer to be equitably entitled thereto by reason of having incurred
funeral or other expenses incident to the last illness or death of the person
insured.
(Added to NRS by 1971, 1748)
NRS 688B.110 Certificate: Filing; approval.
1. The group life policy shall contain a
provision that the insurer will issue to the policyholder for delivery to each
person insured a certificate setting forth a statement in summary form of the
essential features of the insurance coverage of such employee or member, to
whom benefits thereunder are payable, and the rights and conditions set forth
in NRS 688B.120, 688B.130
and 688B.140. If dependents are included in the
coverage, only one statement need be issued for each family unit.
2. The Commissioner may, in the discretion
of the Commissioner, require the form of each such certificate proposed to be
delivered in this state under a group policy not made under the laws of this state,
to be filed with the Commissioner by the insurer for informational purposes
only.
(Added to NRS by 1971, 1749)
NRS 688B.120 Conversion on termination of eligibility. The group life insurance policy shall contain
a provision that if the insurance on a person covered under the policy ceases
because of termination of employment or of membership in the class or classes
eligible for coverage under the policy, such person shall be entitled to have
issued to him or her by the insurer, without evidence of insurability, an
individual policy of life insurance without disability or other supplementary
benefits, provided application for the individual policy shall be made, and the
first premium paid to the insurer, within 31 days after such termination, and provided
further that:
1. The individual policy shall, at the
option of such person, be on any one of the forms, except term insurance, then
customarily issued by the insurer at the age and for the amount applied for;
2. The individual policy shall be in an
amount not in excess of the amount of life insurance which ceases because of
such termination less the amount of any life insurance for which such person is
or becomes eligible under the same or any other group policy within 31 days
after such termination, but any amount of insurance which has matured on or
before the date of such termination as an endowment payable to the person
insured, whether in one sum or in installments or in the form of an annuity,
shall not, for the purposes of this section, be included in the amount which is
considered to cease because of such termination; and
3. The premium on the individual policy
shall be at the insurer’s then customary rate applicable to the form and amount
of the individual policy, to the class of risk to which such person then
belongs, and to the age of the person attained on the effective date of the
individual policy.
(Added to NRS by 1971, 1749)
NRS 688B.130 Conversion on termination of policy. The
group life insurance policy shall contain 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 and who has been so insured for at least
5 years prior to such termination date shall be 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 NRS
688B.120, 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 31 days after such termination; and
2. $2,000.
(Added to NRS by 1971, 1750)
NRS 688B.140 Death pending conversion. The
group life insurance policy shall contain a provision that if a person insured
under the policy dies during the period within which the person would have been
entitled to have an individual policy issued to him or her in accordance with NRS 688B.120 or 688B.130
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 him or
her 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.
(Added to NRS by 1971, 1750)
NRS 688B.150 Information to debtor. A
policy issued to a creditor to insure debtors of such creditor shall contain a
provision that the insurer will furnish to the policyholder for delivery to
each debtor insured under the policy a form which will contain a statement that
the life of the debtor is insured under the policy and that any death benefit
paid thereunder by reason of the death of the debtor shall be applied to reduce
or extinguish the indebtedness.
(Added to NRS by 1971, 1750)
NRS 688B.160 Notice as to right of conversion.
1. If any individual insured under a group
life insurance policy delivered in this state after January 1, 1972, becomes
entitled under the terms of such policy to have an individual policy of life
insurance issued to the individual without evidence of insurability, subject to
the making of an application and payment of the first premium within the period
specified in such policy, and if such individual is not given notice of the
existence of such right at least 15 days prior to the expiration date of such
period, then the individual shall have an additional period within which to
exercise such right; but nothing contained in this section shall be construed
to continue any insurance beyond the period provided in such policy.
2. This additional period shall expire 15
days next after the individual is given such notice, but in no event shall such
additional period extend beyond 60 days next after the expiration date of the
period provided in such policy.
3. Written notice presented 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
as furnished by the policyholder shall constitute notice for the purpose of
this section.
(Added to NRS by 1971, 1750)
NRS 688B.170 Readjustment of premium. Any
group life insurance contract may provide for a readjustment of the premium
rate based upon the experience thereunder.
(Added to NRS by 1971, 1751)
NRS 688B.180 Application of dividends; rate reductions.
1. If a policy dividend is declared after
January 1, 1972, or a reduction in rate is made after January 1, 1972, or
continued for the first or any subsequent year of insurance under any policy of
group life insurance issued before, on or after January 1, 1972, to any
policyholder, the excess, if any, of the aggregate dividends or rate reductions
under such a policy and all other group insurance policies of the policyholder
over the aggregate expenditure for insurance under such policies made from
money contributed by the policyholder, or by an employer of insured persons, or
by a union or association to which the insured persons belong, including
expenditures made in connection with administration of such policies, must be
applied by the policyholder for the sole benefit of insured employees or
members.
2. This section does not apply to debtor
groups.
(Added to NRS by 1971, 1751; A 1997, 1626)
NRS 688B.190 Proceeds of benefits to be paid within 30 days after death of
insured. An insurer shall pay the
proceeds of any benefits under a group life insurance policy not more than 30
days after the death of the insured. If the proceeds are not paid within this
period, the insurer shall pay interest on the proceeds, at a rate that is not
less than the current rate of interest on death proceeds on deposit with the
insurer, from the date of death of the insured to the date when the proceeds
are paid.
(Added to NRS by 1997, 3033)
