                                 CODE OF VIRGINIA

GROUP LIFE INSURANCE REQUIREMENTS (§ 38.2-3318.1)

Except as provided in § 38.2-3319.1, no policy of group life insurance shall be
delivered in this Commonwealth unless it conforms to one of the following
descriptions:

A. 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 requirements:

   1. The employees eligible for insurance under the policy shall be all of the
   employees of the employer, or all of any class or classes thereof. The policy
   may provide that the term &#8220;employees&#8221; include:
   				a. The employees of one or more subsidiary corporations, and the
   employees, individual proprietors, and partners of one or more affiliated
   corporations, proprietorships or partnerships if the business of the employer
   and of such affiliated corporations, proprietorships, or partnerships is under
   common control;
   				b. The individual proprietor or partners if the employer is an individual
   proprietorship or partnership;
   				c. Retired employees, former employees and directors of a corporate
   employer; or
   				d. If the policy is issued to insure the employees of a public body,
   elected or appointed officials.

   2. The premium for the policy shall be paid either from the employer&#8217;s
   funds or from funds contributed by the insured employees, or from both. Except
   as provided in subdivision 3 of this subsection, 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, except those who reject such coverage in
   writing.

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

B. A policy which is:

   1. Not subject to Chapter 37.1 (&#xA7; 38.2-3727 et seq.) of this title, and

   2. Issued to a creditor or its parent holding company or to a trustee or
   trustees or agent designated by two or more creditors, which creditor, holding
   company, affiliate, trustee, trustees or agent shall be deemed the
   policyholder, to insure debtors of the creditor, or creditors, subject to the
   following requirements:
   				a. The debtors eligible for insurance under the policy shall be all of the
   debtors of the creditor or creditors, or all of any class or classes thereof.
   The policy may provide that the term &#8220;debtors&#8221; includes:

      1. Borrowers of money or purchasers or lessees of goods, services, or
      property for which payment is arranged through a credit transaction;

      2. The debtors of one or more subsidiary corporations; and

      3. The debtors of one or more affiliated corporations, proprietorships, or
      partnerships if the business of the policyholder and of such affiliated
      corporations, proprietorships, or partnerships is under common control.
      					b. The premium for the policy shall be paid either from the
      creditor&#8217;s funds, or from charges collected from the insured debtors,
      or from both. Except as provided in subdivision 3 of this subsection, a
      policy on which no part of the premium is to be derived from the funds
      contributed by insured debtors specifically for their insurance must insure
      all eligible debtors.

   3. An insurer may exclude any debtors as to whom evidence of individual
   insurability is not satisfactory to the insurer.

   4. The amount of the insurance on the life of any debtor shall at no time
   exceed the greater of the scheduled or actual amount of unpaid indebtedness to
   the creditor.

   5. The insurance may be payable to the creditor or any successor to the right,
   title, and interest of the creditor. Such payment shall reduce or extinguish
   the unpaid indebtedness of the debtor to the extent of such payment and any
   excess of the insurance shall be payable to the estate of the insured.

   6. Notwithstanding the provisions of the above subsections, insurance on
   agricultural credit transaction commitments may be written up to the amount of
   the loan commitment on a nondecreasing or level term plan. Insurance on
   educational credit transaction commitments may be written up to the amount of
   the loan commitment less the amount of any repayments made on the loan.

C. A policy issued to a labor union, or similar employee organization, which
shall be deemed to be the policyholder, to insure members of such union or
organization for the benefit of persons other than the union or organization or
any of its officials, representatives, or agents, subject to the following
requirements:

   1. The members eligible for insurance under the policy shall be all of the
   members of the union or organization, or all of any class or classes thereof.

   2. The premium for the policy shall be paid either from funds of the union or
   organization, or from funds contributed by the insured members specifically
   for their insurance, or from both. Except as provided in subdivision 3 of this
   subsection, a policy on which no part of the premium is to be derived from
   funds contributed by the insured members specifically for their insurance must
   insure all eligible members, except those who reject such coverage in writing.

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

D. A policy issued to or for (i) a multiple employer welfare arrangement, a
rural electric cooperative, or a rural electric telephone cooperative as these
terms are defined in 29 U.S.C. § 1002, or (ii) a trust or to the trustees of a
fund established or adopted by two or more employers, or by one or more labor
unions or similar employee organizations, or by one or more employers and one or
more labor unions or similar employee organizations, which trust or trustees
shall be deemed the policyholder, to insure employees of the employers or
members of the unions or organizations for the benefit of persons other than the
employees or the unions or organizations, subject to the following requirements:

   1. The persons eligible for insurance shall be all of the employees of the
   employers or all of the members of the unions or organizations, or all of any
   class or classes thereof. The policy may provide that the term employees
   includes:
   				a. The employees of one or more subsidiary corporations, and the
   employees, individual proprietors, and partners of one or more affiliated
   corporations, proprietorships or partnerships if the business of the employer
   and of such affiliated corporations, proprietorships or partnerships is under
   common control;
   				b. The individual proprietor or partners if the employer is an individual
   proprietorship or partnership;
   				c. Retired employees, former employees and directors of a corporate
   employer; or
   				d. The trustees or their employees, or both, if their duties are
   principally connected with such trusteeship.

   2. The premium for the policy shall be paid from funds contributed by the
   employer or employers of the insured persons, or by the union or unions or
   similar employee organizations, or by both, or from funds contributed by the
   insured persons or from both the insured persons and the employers or unions
   or similar employee organizations. Except as provided in subdivision 3 of this
   subsection, a policy on which no part of the premium is to be derived from
   funds contributed by the insured persons specifically for their insurance must
   insure all eligible persons, except those who reject such coverage in writing.

   3. 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. 1. A policy issued to an association or to a trust or to the trustees of a
fund established, created, or maintained for the benefit of members of one or
more associations. The association or associations shall:
			a. Have at the outset a minimum of 100 persons;
			b. Have been organized and maintained in good faith for purposes other than
that of obtaining insurance;
			c. Have been in active existence for at least five years; and
			d. Have a constitution and bylaws which provide that: (i) the association or
associations hold regular meetings not less than annually to further purposes of
the members, (ii) except for credit unions, the association or associations
collect dues or solicit contributions from members, and (iii) the members have
voting privileges and representation on the governing board and committees.

   2. The policy shall be subject to the following requirements:
   				a. The policy may insure members of such association or associations,
   employees thereof or employees of members, or one or more of the preceding or
   all of any class or classes thereof for the benefit of persons other than the
   employee&#8217;s employer.
   				b. The premium for the policy shall be paid from funds contributed by the
   association or associations, or by employer members, or by both, or from funds
   contributed by the covered persons or from both the covered persons and the
   association, associations, or employer members.
   				c. Except as provided in clause d of this subdivision, a policy on which
   no part of the premium is to be derived from funds contributed by the covered
   persons specifically for the insurance must insure all eligible persons,
   except those who reject such coverage in writing.
   				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.

F. A policy issued to a credit union or to a trustee or trustees or agent
designated by two or more credit unions, which credit union, trustee, trustees,
or agent shall be deemed policyholder, to insure members of such credit union or
credit unions for the benefit of persons other than the credit union or credit
unions, trustee or trustees, or agent or any of their officials, subject to the
following requirements:

   1. The members eligible for insurance shall be all of the members of the
   credit union or credit unions, or all of any class or classes thereof.

   2. The premium for the policy shall be paid by the policyholder from the
   credit union&#8217;s funds and, except as provided in subdivision 3 of this
   subsection, must insure all eligible members.

   3. An insurer may exclude or limit the coverage on any member as to whom
   evidence of individual insurability is not satisfactory to the insurer.

G. A policy issued to an incorporated association as described in § 38.2-4000,
whose principal purpose is to assist its members in (i) financial planning for
their funerals and burials and (ii) obtaining insurance for the payment, in
whole or in part, for funeral, burial and other expenses. The association shall
be deemed the policyholder, to insure the members of the association for the
benefit of persons other than the association. The policy shall be subject to
the following requirements:

   1. A policy may not be issued to an association in which membership is
   conditioned upon the member&#8217;s designation at any time of a specific
   funeral director or cemetery as the beneficiary under the insurance, so as to
   deprive the representatives or family of the deceased member from, or in any
   way control them in, obtaining funeral supplies and services in an open
   competitive market.

   2. The policy shall insure members of such association.

   3. The premium for the policy shall be paid from funds contributed by the
   association, or from funds contributed by the covered persons, or both.

   4. Except as provided in subdivision 5 of this subsection, a policy on which
   no part of the premium is to be derived from funds contributed by the covered
   persons specifically for the insurance must insure all eligible persons except
   those who reject the coverage in writing.

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

HISTORY: 1998, c. 154.