HOUSE BILL NO. 620

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Bill Status



H0620...........................................................by BUSINESS
VOLUNTARY GROUP LIFE INSURANCE - Amends existing law to eliminate the
restriction on the sale of voluntary group life insurance policies for
employee groups, labor union groups, trustee groups and dependents'
coverage.
                                                                        
02/06    House intro - 1st rdg - to printing
02/09    Rpt prt - to Bus
02/20    Rpt out - rec d/p - to 2nd rdg
02/23    2nd rdg - to 3rd rdg
02/25    3rd rdg - PASSED - 69-0-1
      AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Bell,
      Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
      Crow, Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood, Henbest,
      Jaquet, Jones, Kellogg, Kulczyk, Lake, Langford, Langhorst, Martinez,
      McGeachin, McKague, Meyer, Miller, Mitchell, Moyle, Naccarato,
      Nielsen, Pasley-Stuart, Raybould, Ridinger, Ring, Ringo, Roberts,
      Robison, Rydalch, Sali, Sayler, Schaefer, Shepherd, Shirley, Skippen,
      Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills, Mr.
      Speaker
      NAYS -- None
      Absent and excused -- Wood
    Floor Sponsor - Black
    Title apvd - to Senate
02/26    Senate intro - 1st rdg - to Com/HuRes
03/10    Rpt out - rec d/p - to 2nd rdg
03/11    2nd rdg - to 3rd rdg
03/18    3rd rdg - PASSED - 35-0-0
      AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
      Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes,
      Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge, Malepeai,
      Marley, McKenzie, McWilliams, Noble, Noh, Pearce, Richardson,
      Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Cameron
    Title apvd - to House
03/19    To enrol - Rpt enrol - Sp signed - Pres signed
03/22    To Governor
03/23    Governor signed
         Session Law Chapter 256
         Effective: 03/23/04

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 620
                                                                        
                                   BY BUSINESS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO GROUP LIFE INSURANCE; AMENDING SECTIONS 41-2003 AND 41-2004, IDAHO
  3        CODE, TO ELIMINATE THE RESTRICTION ON THE SALE  OF  VOLUNTARY  GROUP  LIFE
  4        INSURANCE  POLICIES  AND  TO  CORRECT  CODIFIER  ERRORS; AMENDING SECTIONS
  5        41-2007 AND 41-2009, IDAHO CODE, TO ELIMINATE THE RESTRICTION ON THE  SALE
  6        OF VOLUNTARY GROUP LIFE INSURANCE POLICIES, TO CORRECT CODIFIER ERRORS AND
  7        TO MAKE TECHNICAL CORRECTIONS; AND DECLARING AN EMERGENCY.
                                                                        
  8    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  9        SECTION  1.  That  Section 41-2003, Idaho Code, be, and the same is hereby
 10    amended to read as follows:
                                                                        
 11        41-2003.  EMPLOYEE GROUPS. The lives of a  group  of  individuals  may  be
 12    insured  under  a  policy  issued to an employer, or to the trustees of a fund
 13    established by an employer, which employer or trustees  shall  be  deemed  the
 14    policy  holder policyholder, to insure employees of the employer for the bene-
 15    fit of persons other than the employer, subject to the following requirements:
 16        (1)  The employees eligible for insurance under the policy shall be all of
 17    the employees of the employer, or all of any class or classes  thereof  deter-
 18    mined  by  conditions  pertaining  to their employment. The policy may provide
 19    that the term "employees" shall include the employees of one (1) or more  sub-
 20    sidiary  corporations, and the employees, individual proprietors, and partners
 21    of one (1) or more affiliated corporations, proprietors or partnerships if the
 22    business of the employer and of such affiliated corporations,  proprietors  or
 23    partnerships  is  under  common  control  through stock ownership, contract or
 24    otherwise. The policy may provide that the term "employees" shall include  the
 25    individual  proprietor or partners if the employer is an individual proprietor
 26    or a partnership. The policy may  provide  that  the  term  "employees"  shall
 27    include retired employees. No director of a corporate employer shall be eligi-
 28    ble for insurance under the policy unless such person is otherwise eligible as
 29    a bona fide employee of the corporation, by performing services other than the
 30    usual  duties of a director. No individual proprietor or partner shall be eli-
 31    gible for insurance under the policy unless he  is  actively  engaged  in  and
 32    devotes  a  substantial part of his time to the conduct of the business of the
 33    proprietor or partnership. A policy issued to insure the employees of a public
 34    body may provide that the term "employees" shall include elected or  appointed
 35    officials.
 36        (2)  The premium for the policy shall be paid by the policy holder, either
 37    wholly  from  the employer's funds or funds contributed by him, or partly from
 38    such funds and partly from funds contributed by the insured employees, or from
 39    both. No policy may be issued on which the entire premium  is  to  be  derived
 40    from funds contributed by the insured employees. A policy on which part of the
 41    premium  is  to be derived from funds contributed by the insured employees may
 42    be placed in force only if at least seventy-five per cent (75%)  of  the  then
 43    eligible employees, excluding any as to whom evidence of individual insurabil-
                                                                        
                                           2
                                                                        
  1    ity  is  not satisfactory to the insurer, elect to make the required contribu-
  2    tion. A policy on which no part of the premium is to  be  derived  from  funds
  3    contributed  by  the  insured employees must insure all eligible employees, or
  4    all except any as to whom evidence of individual insurability is not satisfac-
  5    tory to the insurer, or who have rejected the coverage in writing.
  6        (3)  The policy must cover at least five (5) employees at date of issue.
  7        (4)  The amounts of insurance under the policy must  be  based  upon  some
  8    plan  precluding  individual  selection  either  by  the  employees  or by the
  9    employer or trustees.
                                                                        
 10        SECTION 2.  That Section 41-2004, Idaho Code, be, and the same  is  hereby
 11    amended to read as follows:
                                                                        
 12        41-2004.  LABOR  UNION  GROUPS. The lives of a group of individuals may be
 13    insured under a policy issued to a labor union, which shall be deemed the pol-
 14    icy holder policyholder, to insure members of such union for  the  benefit  of
 15    persons  other  than  the  union  or  any of its officials, representatives or
 16    agents, subject to the following requirements:
 17        (1)  The members eligible for insurance under the policy shall be  all  of
 18    the members of the union, or all of any class or classes thereof determined by
 19    conditions  pertaining  to their employment, or to membership in the union, or
 20    both.
 21        (2)  The premium for the policy shall be paid by the policy holder policy-
 22    holder, either wholly from the union's funds, or partly from  such  funds  and
 23    partly  from  funds  contributed by the insured members specifically for their
 24    insurance, or from both. No policy may be issued on which the  entire  premium
 25    is  to  be  derived from funds contributed by the insured members specifically
 26    for their insurance. A policy on which part of the premium is  to  be  derived
 27    from funds contributed by the insured members specifically for their insurance
 28    may  be  placed  in  force only if at least seventy-five per cent (75%) of the
 29    then eligible members excluding any as to whom evidence of  individual  insur-
 30    ability is not satisfactory to the insurer, elect to make the required contri-
 31    butions.  A policy on which no part of the premium is to be derived from funds
 32    contributed by the insured  members  specifically  for  their  insurance  must
 33    insure all eligible members, or all except any as to whom evidence of individ-
 34    ual  insurability is not satisfactory to the insurer, or who have rejected the
 35    coverage in writing.
 36        (3)  The policy must cover at least ten (10) members at date of issue.
 37        (4)  The amounts of insurance under the policy must  be  based  upon  some
 38    plan precluding individual selection either by the members or by the union.
                                                                        
 39        SECTION  3.  That  Section 41-2007, Idaho Code, be, and the same is hereby
 40    amended to read as follows:
                                                                        
 41        41-2007.  TRUSTEE GROUPS. The lives of  a  group  of  individuals  may  be
 42    insured  under  a  policy issued to the trustees of a fund established in this
 43    state by two (2) or more employers in the same industry or to the trustees  of
 44    a  fund  established  by  one  (1) or more labor unions, or by one (1) or more
 45    employers and one (1) or more labor unions, which trustees shall be deemed the
 46    policy holder policyholder, to insure employees of the employers or members of
 47    the unions for the benefit of persons other than the employers or the  unions,
 48    subject to the following requirements:
 49        (1)  The  persons  eligible for insurance shall be all of the employees of
 50    the employers or all of the members of the unions, or  all  of  any  class  or
 51    classes thereof determined by conditions pertaining to their employment, or to
                                                                        
                                           3
                                                                        
  1    membership  in  the  unions,  or to both. The policy may provide that the term
  2    "employees" shall include retired employees, and the individual proprietor  or
  3    partners  if  an  employer  is  an  individual proprietor or a partnership. No
  4    director of a corporate employer shall be eligible  for  insurance  under  the
  5    policy unless such person is otherwise eligible as a bona fide employee of the
  6    corporation  by performing services other than the usual duties of a director.
  7    No individual proprietor or partner shall be eligible for insurance under  the
  8    policy  unless he is actively engaged in and devotes a substantial part of his
  9    time to the conduct of the business of the proprietor or partnership. The pol-
 10    icy may provide that the  term "employees"  shall  include  the  trustees,  or
 11    their  employees, or both, if their duties are principally connected with such
 12    trusteeship.
 13        (2)  The premium for the policy shall be paid by the trustees wholly  from
 14    funds  contributed  by the employer or employers of the insured persons, or by
 15    the union or unions, or by both, or partly from such  funds  and  partly  from
 16    funds contributed by the insured persons, or from any combination of these. No
 17    policy  may  be issued on which the entire premium is to be derived from funds
 18    contributed by the insured persons specifically for their insurance. A  policy
 19    on  which  part  of the premium is to be derived from funds contributed by the
 20    insured persons specifically for their insurance may be placed in  force  only
 21    if  at least seventy-five per cent (75%) of the then eligible persons, exclud-
 22    ing any as to whom evidence of individual insurability is not satisfactory  to
 23    the  insurer,  elect  to make the required contributions. A policy on which no
 24    part of the premium is to be derived from funds  contributed  by  the  insured
 25    persons  specifically for their insurance must insure all eligible persons, or
 26    all except any as to whom evidence of individual insurability is not satisfac-
 27    tory to the insurer, or who have rejected the coverage in writing.
 28        (3)  The policy must cover at date of issue at least twenty-five (25) per-
 29    sons and not less than an average of four (4) persons, other  than  individual
 30    proprietors  or partners, per employer unit; and if the fund is established by
 31    the members of an association of employers the policy may be issued only if
 32        (a)  Either (i) the participating employers constitute at date of issue at
 33        least sixty per cent (60%) of those employer members whose  employees  are
 34        not  already  covered for group life insurance or (ii) the total number of
 35        persons covered at date of issue exceed six hundred (600); and
 36        (b)  The policy shall not require that, if a participating  employer  dis-
 37        continues  membership  in  the association, the insurance of his employees
 38        shall cease solely by reason of such discontinuance.
 39        (4)  The amounts of insurance under the policy must  be  based  upon  some
 40    plan  precluding  individual selection either by the insured persons or by the
 41    policy holder, employers, or unions.
                                                                        
 42        SECTION 4.  That Section 41-2009, Idaho Code, be, and the same  is  hereby
 43    amended to read as follows:
                                                                        
 44        41-2009.  DEPENDENTS'   COVERAGE.  Any  group  life  policy  issued  under
 45    sections 41-2003 (employee  groups),  or  41-2004  (labor  union  groups),  or
 46    41-2006  (public employee groups), or 41-2007 (trustee groups) may be extended
 47    to insure the employees or members against loss due  to  the  death  of  their
 48    spouses  and  minor  children, or any class or classes thereof, subject to the
 49    following requirements:
 50        (1)  The premium for the insurance shall be paid by the policy holder pol-
 51    icyholder, either from the employer's or union's funds or funds contributed by
 52    the employer or union, or from funds contributed by the insured  employees  or
 53    members,  or from both. If any part of the premium is to be derived from funds
                                                                        
                                           4
                                                                        
  1    contributed by the insured employees or members, the insurance with respect to
  2    spouses and children may be placed in force only if at least seventy-five  per
  3    cent  (75%)  of  the  then  eligible employees or members, excluding any as to
  4    whose family members evidence of  insurability  is  not  satisfactory  to  the
  5    insurer,  elected to make the required contribution. If no part of the premium
  6    is to be derived from funds contributed by the employees or members, all  eli-
  7    gible  employees or members, excluding any as to whose family members evidence
  8    of insurability is not satisfactory to  the  insurer,  must  be  insured  with
  9    respect to their spouses and children.
 10        (2)  The  amounts  of  insurance  must  be based upon some plan precluding
 11    individual selection either by the employees  or  members  or  by  the  policy
 12    holder, employer or union.
 13        (3)  Upon  termination of the insurance with respect to the members of the
 14    family of any employee or member by reason of the employee's or member's  ter-
 15    mination of employment, termination of membership in the class or classes eli-
 16    gible for coverage under the policy, or death, the spouse shall be entitled to
 17    have  issued  by  the insurer, without evidence of insurability, an individual
 18    policy of life insurance, without disability or other supplementary  benefits,
 19    providing  application  for the individual policy shall be made, and the first
 20    premium paid to the insurer, within thirty-one (31) days after  such  termina-
 21    tion, subject to the requirements of subdivisions subsections (1), (2) and (3)
 22    of section 41-2018, of this chapter Idaho Code. If any group policy terminates
 23    or  is  amended  so as to terminate the insurance of any class of employees or
 24    members and the employee or member is entitled to have  issued  an  individual
 25    policy,  under  section  41-2019, of this chapter Idaho Code, the spouse shall
 26    also be entitled to have issued by the insurer an individual  policy,  subject
 27    to  the  conditions  and limitations provided above. If the spouse dies within
 28    the period during which he would have been entitled to have an individual pol-
 29    icy issued in accordance with this provision, the  amount  of  life  insurance
 30    which  he would have been entitled to have issued under such individual policy
 31    shall be payable as a claim under the group policy, whether or not application
 32    for the individual policy or the payment of the  first  premium  therefor  has
 33    been made.
 34        (43)  Notwithstanding  section  41-2017,  of this chapter Idaho Code, only
 35    one (1) certificate need be issued for delivery to  an  insured  person  if  a
 36    statement concerning any dependent's coverage is included in such certificate.
                                                                        
 37        SECTION  5.  An  emergency  existing  therefor,  which emergency is hereby
 38    declared to exist, this act shall be in full force and effect on and after its
 39    passage and approval.

Statement of Purpose / Fiscal Impact


                      STATEMENT OF PURPOSE
                            RS 13814
                                
This legislation will create consistency with the statutes of
surrounding states and the NAIC Model Act, and will provide
employers with some relief from the high cost of employee benefits
while continuing to allow employees to own group life insurance if
they wish to do so.
                                   




                          FISCAL NOTE
None.
     
     





Contact:  John Mackey
          United Heritage Insurance
          322.2685


STATEMENT OF PURPOSE/FISCAL NOTE                     H 620