509.14 Group insurance on franchise plan.
It shall be lawful for an authorized insurer to issue life, accident and sickness insurance policies on a franchise plan at reduced rates, covering the members of an association, subject to the following:
1. An “association” as referred to herein shall consist of a labor union, trade association, association of employees, industrial association or professional association, which has been organized and operating more than two years for purposes other than procuring insurance.
2. A “franchise plan” as referred to herein shall consist of an insurance policy or policies covering the insurable members of an association, but in no case less than ten. Such policies may be written in the name of the association or may be written individually for the insured members, subject to the following:
a. A life insurance policy written in the name of the association, shall conform to the provisions of section 509.2.
b. An individual policy on the life of a member of an association, providing for term insurance renewable only during the continuation of membership, shall also provide in the event of termination of membership the same provision for conversion as set out in section 509.2, subsection 8.
c. An individual life policy written on any basis other than term shall provide that the policyholder may elect to continue it in force upon the policyholder’s termination of membership in the association by giving the insurer a notice in writing of such election within thirty days thereafter and paying therefor the renewal premium, which the insurer may increase to reflect the normal individual rate for the policyholder as determined by the policyholder’s age and class at the date of issue of the policy.
d. If an accident and sickness policy is written in the name of the association, it shall conform to the provisions of section 509.3.
e. An individual accident and sickness policy shall be subject to the provisions of chapter 514A.
f. Premiums for such policies may be paid entirely from the funds of the association, entirely from the funds of the members or partly from the funds of each.
g. Accident and sickness policies may include the spouse and dependents of the insured.
[C54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §509.14]
Referred to in §509.19, 514D.3, 514D.4