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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
]]]] 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
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