The Vermont Statutes Online
Banking and Insurance
LIFE INSURANCE POLICIES AND ANNUITY CONTRACTS
GROUP LIFE INSURANCE
3803. Employee groups
The lives of a
group of individuals may be insured under a policy issued to an employer, or to
the trustees of a fund established by an employer, which employer or trustees
shall be deemed the policyholder, to insure employees of the employer for the
benefit of persons other than the employer, subject to the following
employees eligible for insurance under the policy shall be all of the employees
of the employer, or all of any class or classes thereof determined by
conditions pertaining to their employment. The policy may provide that the term
"employees" shall include the employees of one or more subsidiary
corporations, and the employees, individual proprietors, and partners of one or
more affiliated corporations, proprietors, or partnerships if the business of
the employer and of such affiliated corporations, proprietors, or partnerships
is under common control through stock ownership, contract, or otherwise. The
policy may provide that the term "employees" shall include the
individual proprietor or partners if the employer is an individual proprietor
or a partnership. The policy may provide that the term "employees"
shall include retired employees. No director of a corporate employer shall be
eligible for insurance under the policy unless such person is otherwise
eligible as a bona fide employee of the corporation, by performing services
other than the usual duties of a director. No individual proprietor or partner
shall be eligible for insurance under the policy unless he or she is actively
engaged in and devotes a substantial part of his or her time to the conduct of
the business of the proprietor or partnership. A policy issued to insure the
employees of a public body may provide that the term "employees"
shall include elected or appointed officials.
(2) The premium
for the policy shall be paid by the policyholder, either wholly from the
employer's funds or funds contributed by him or her, or partly from such funds
and partly from funds contributed by the insured employees. No policy may be
issued on which the entire premium is to be derived from funds contributed by
the insured employees. A policy on which no part of the premium is to be
derived from funds contributed by the insured employees must insure all
eligible employees, or all except any as to whom evidence of individual
insurability is not satisfactory to the insurer.
(3) The policy
must cover at least two employees at date of issue.
(4) The amounts
of insurance under the policy must be based upon some plan precluding
individual selection either by the employees or by the employer or trustees.
(Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 3); amended 2005,
No. 36, § 7, eff. June 1, 2005; 2009, No. 137 (Adj. Sess.), § 5.)