408:15 Group Standard Provisions. –
No policy or certificate of group life insurance, or any form attached to a policy or certificate of group life insurance, shall be delivered or issued for delivery in this state to a resident of this state unless it contains in substance the following provisions, 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 or certificate holder, provided, however, that (a) provisions in paragraphs II-VIII inclusive shall not apply to policies issued to a creditor to insure debtors of such creditor or to policies issued to a credit union to insure members of such credit union; and (b) 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 or certificate holder, but nothing herein shall be construed to require that group life insurance policies and certificates contain the same nonforfeiture provisions as are required for individual life insurance policies:
I. 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 his or her coverage.
II. 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 provisions of the policy. In the event there is no living designated beneficiary as to all or any part of such sum at the death of the person insured, the insurer may, subject to any right reserved by the insurer in the policy and set forth in the certificate, pay at its option a part of such sum, not exceeding $2,000, 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.
III. A provision that the insurer will issue to the policyholder, for delivery to each person insured, an individual certificate setting forth a statement as to the insurance protection to which he or she is entitled, to whom the insurance benefits are payable, and the rights and conditions set forth in paragraphs IV, V, VI, and VII following.
IV. A provision that if the insurance, or any portion of it, on a person covered under the policy, or on the dependent of a person covered, 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 a right of conversion. The right of conversion entitles such person to have an individual life insurance policy issued by the insurer, without evidence of insurability and without disability or other supplementary benefits.
(a) Application for the individual policy shall be made, and the first premium paid to the insurer, within 31 days after such termination.
(b) 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.
(c) The individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of such termination, provided that any amount of insurance which shall have matured, on or before the date of such termination, as an endowment payable to the person insured, whether in one sum or in installments in the form of an annuity, shall not, for the purposes of this provision, be included in the amount which is considered to cease because of such termination.
(d) 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 person's age attained on the effective date of the individual policy. Subject to the same conditions set forth in subparagraphs (a)-(c), the conversion privilege shall be available:
(1) To 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 death; and
(2) To the dependent of the employee or member upon termination of coverage of the dependent, while the employee or member remains insured under the group policy, by reason of the dependent ceasing to be a qualified family member under the group policy.
(e) The suicide provision of the individual policy shall no longer apply after the second anniversary of the effective date of the group life insurance from which the conversion was made.
(f) The individual policy shall not be contestable after the second anniversary of the effective date of the group life insurance from which conversion was made.
V. A portability option, including for term insurance, may be offered, in addition to and not in lieu of the conversion right, when coverage ceases because of termination of employment or of membership in the class or classes eligible for coverage under the group policy, provided the subsequent policy, certificate, and group meet all the requirements in this chapter. The portability option, if offered, shall be made available to all employees or members, without evidence of insurability and regardless of the reason for the termination of employment or of membership in the class or classes eligible for coverage. Portability may be provided through a group life portability trust, established and maintained in New Hampshire and solely for the purpose of making ported life insurance available to employees or members whose coverage would terminate under the group life policy, provided it meets the requirements of a discretionary group as provided under RSA 408:14, VII and is approved by the commissioner.
VI. 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 the insured dependent of a covered person, and who has been so insured for at least 5 years prior to such termination date shall be entitled to have issued by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by paragraph IV, except that the group policy may provide that the amount of such individual policy shall not exceed the smaller of:
(a) The amount of the person's life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of life insurance for which he or she is or becomes eligible under any group policy issued or reinstated by the same or another insurer within 31 days after such termination, or
(b) $10,000.
VII. If an individual insured under a group life insurance policy hereafter delivered in this state becomes entitled under the terms of the policy to have an individual policy or ported coverage certificate of life insurance issued without evidence of insurability, subject to making an application and payment of the first premium within the period specified in the policy, and if the individual is not given notice of the existence of the right at least 15 days prior to the expiration date of the period, then in that event, the individual shall have an additional period within which to exercise the right, but nothing herein contained shall be construed to continue any insurance beyond the period provided in the policy. This additional period shall expire 15 days after the individual is given notice, but in no event shall the additional period extend beyond 60 days after the expiration date of the period provided in the policy. It shall be the responsibility of the insurer to notify the individual of the right to elect conversion coverage. 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 adequate notice for the purpose of this paragraph.
VIII. A provision that if a person insured under the group policy dies during the period within which he or she would have been entitled to have an individual policy or ported coverage certificate issued to him or her in accordance with paragraph IV, V, or VI, and before such coverage shall have become effective, the amount of life insurance which he or she would have been entitled to have issued to him or her 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.
IX. Whenever any policy of group life insurance extends group life insurance to the spouse, child or children, or other dependents of an employee, or other member of the group, and if the coverage of any dependent of any employee or member of the group insured by such policy who is mentally or physically incapable of earning a living on the date as of which such dependent's status as a covered family member would otherwise expire because of age, shall continue under such policy while such policy remains in force or is replaced by another group policy as long as such incapacity continues and as long as the dependent remains chiefly financially dependent on the employee or member of the group or the employee or the employee's estate is chargeable for the care of the dependent, provided that due proof of such incapacity is received by the insurer within 31 days of such expiration date. If such coverage is continued in accordance with this paragraph, such dependent shall be entitled upon termination of such incapacity to a converted policy in accordance with and subject to the terms and conditions of the conversion privilege clause, if such privilege is afforded by the policy, provided that such dependent has not attained the limiting age, if any, for conversion of adults specified in the policy.