Nrs: Chapter 688B - Group Life Insurance

Link to law: https://www.leg.state.nv.us/NRS/NRS-688B.html
Published: 2015

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[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.

_________

_________

 

      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)