SUBPART C. GROUP LIFE

§941. Group life insurance defined; eligibility; payment of premiums; limits and coverage

            A. A policy of group life insurance may be issued to any of the following groups or combination thereof, or to the trustees thereof who shall be deemed the policyholder:

            (1) Employees or retired employees of any employer or subsidiary employer, individual proprietors or partners if the employee is an individual proprietor or partnership, or a trust established by an insurer on behalf of participating employers, provided all participating employers and employees have the same statutory protections that would apply if such policy were purchased by the employer directly from the insurer. Directors shall not be considered as employees unless they perform substantial duties for the employer in addition to those usually performed as directors.

            (2) Full privileged and contributing members or employees of members of any organization or association which has been formed for purposes other than procuring insurance for the members or employees.

            (3) Life insurance covering only the lives of all members of a group of persons, numbering not less than ten new entrants to the group yearly, who become borrowers from one financial institution, including subsidiary or affiliated companies, or who become purchasers of securities, merchandise, or other property from one vendor under agreement to repay the sum borrowed or to pay the balance of the price of the securities, merchandise, or other property purchased, whether in installments or in a single sum on a stated date, to the extent of their indebtedness to said financial institution or vendor, written under a policy which may be issued upon the application of and made payable to the financial institution or vendor or other creditor to whom such vendor may have transferred title to the indebtedness, as beneficiary, the premium on such policy to be payable by the financial institution, vendor, or other creditor, either from funds of the financial institution, vendor, or other creditor, or from charges collected from the insured debtors or from both.

            (4) Life insurance covering the members of one or more companies, batteries, troops, or other units of the national guard of any state other than Louisiana, written under a policy issued to the commanding general of the national guard who shall be deemed to be the employer for the purposes of this Section, the premium on which is to be paid by the members of such units for the benefit of persons other than the employer.

            (5) Members of a group other than one described in Paragraphs (1) through (4) of this Subsection subject to the following requirements:

            (a) A policy of group life insurance shall not be delivered in this state unless the commissioner finds all of the following:

            (i) The issuance of the group policy is not contrary to the best interest of the public.

            (ii) The issuance of the group policy would result in economies of acquisition or administration.

            (iii) The benefits are reasonable in relation to the premiums charged.

            (b) A policy of group life insurance shall not be offered in this state by an insurer under a policy issued in another state unless the state has requirements substantially similar to those in Subparagraph (a) of this Paragraph, and this state has determined that the requirements have been met.

            (c) The premium for the policy shall be paid from either or both of the following sources:

            (i) The policyholder's funds.

            (ii) Funds contributed by the covered persons.

            (d) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.

            (e) The issuance of the group policy shall be actuarially sound.

            B. Each policy of group life insurance may cover one or more employees or members at date of issue as follows:

            (1) The amounts of insurance under the policy must be based upon some plan precluding individual selection, either by the insurer, member, employer, or trustee.

            (2) The premium for the policy shall be paid by the policyholder either wholly from the policyholder's funds or funds contributed by him, partially from such funds and partially from funds contributed by the insureds or from funds contributed entirely by the insureds.

            (3) A policy on which all or a part of the premium is to be derived from funds contributed by the insured employees may be placed in force, excluding any employee as to whom evidence of individual insurability is not satisfactory to the insurer. 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 as to whom evidence of individual insurability is not satisfactory to the insurer. An insurer may but shall not be required to establish a percentage of eligible employees who are required to enroll and participate in a group policy if the entire premium is not paid by the employer.

            (4) The persons eligible for group insurance, except for that insurance issued pursuant to Paragraph A(3) of this Section shall be all the employees of an employer or all the members of any association or employees of such members, or all of any class or classes thereof determined by conditions pertaining to their employment or membership.

            (5) The policy shall be issued to insure lives for the benefits of persons other than the employer or association, except those policies issued pursuant to Paragraph A(3) of this Section in which case benefits shall be paid to the creditor as his interest may appear.

            (6) Any policy issued under this Section may provide for the readjustment of the rate of premium based on the experience at the end of the first year or of any subsequent year of insurance and such readjustment may be made retroactive only for such policy year. Any refund on any plan for readjustment of the rate of premium based on the experience of the group policies hereafter issued, and any dividend paid under such policies may be used to reduce the employer's share of the cost of coverage, except that if the aggregate refunds or dividends under such group policy and in any other group policy or contract issued to the policyholder exceed the aggregate contributions of the employer toward the cost of the coverages, such excess shall be applied by the policyholder for the sole benefit of insured employees.

            (7) Insurance under any group life insurance policy except those policies issued pursuant to Paragraph (A)(3) of this Section, may be extended to insure any one person, with or without any eligible members, including spouse and unmarried children under twenty-one years of age or, in the case of full-time students, unmarried children under the age of twenty-four, and unmarried grandchildren under twenty-one years of age in the legal custody of and residing with the grandparent or, in the case of full-time students, unmarried grandchildren under the age of twenty-four who are in the legal custody of and residing with the grandparent, except that the policy may provide for continuing coverage for any unmarried child or grandchild in the legal custody of and residing with the grandparent who is incapable of self-sustaining employment by reason of intellectual or physical disability, who became so incapable prior to attainment of age twenty-one, and any other person dependent upon the insured employee or member in accordance with the plan which precludes individual selection by the employees or members or by the employer or trustee.

            Acts 1958, No. 125. Amended by Acts 1958, No. 99, §1; Acts 1962, No. 38, §1; Acts 1962, No. 158, §1; Acts 1962, No. 307, §1; Acts 1966, No. 170, §1; Acts 1968, No. 656, §1; Acts 1970, No. 399, §1; Acts 1972, No. 151, §1; Acts 1975, No. 555, §1; Acts 1977, No. 309, §1; Acts 1980, No. 656, §1; Acts 1995, No. 1184, §3; Acts 1999, No. 474, §1; Acts 2001, No. 180, §1, eff. Jan. 1, 2002; Acts 2007, No. 260, §1, eff. July 6, 2007; Acts 2008, No. 404, §1, eff. June 21, 2008; Redesignated from R.S. 22:175 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 326, §1, eff. Jan. 1, 2009; Acts 2011, No. 94, §1, eff. Jan. 1, 2012; Acts 2011, No. 406, §4, eff. July 5, 2011; Acts 2014, No. 811, §11, eff. June 23, 2014; Acts 2022, No. 114, §1.

NOTE: Former R.S. 22:941 redesignated as R.S. 22:651 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.