§ 3810a. Associations and discretionary groups
(a) The lives of a group of individuals may be insured under a policy issued to an association, or to the trustees of a fund established or maintained for the benefit of members of an association, which association or trustees shall be deemed the policyholder, to insure members of such association for the benefit of persons other than the association, trustees, or their officials, subject to the following requirements:
(1) The association shall have a minimum of 100 members at the time of incorporation or formation if it has been incorporated or formed outside this State, and a minimum of 25 members at the time of incorporation or formation if it has been incorporated or formed in this State.
(2) The association shall have been organized and maintained in good faith for purposes other than that of obtaining insurance.
(3) The association shall have been in active existence for at least five years.
(4) The association shall have articles of association and bylaws which provide that:
(A) the association holds regular meetings not less than annually to further purposes of the members;
(B) the association collects dues or solicits contributions from members; and
(C) the members have voting privileges and representation on the governing board and committees.
(5)(A) The premium for the policy shall be paid from funds contributed by the association, or by members, or by both, or from funds contributed by the covered persons or from both the covered persons and the association members.
(B) Except as provided in subdivision (5)(C) 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 such coverage in writing.
(C) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.
(6) The amount of insurance under the policy must be based upon some plan precluding anti-selection either by the members or the association.
(b) The lives of a group of individuals may be insured under a policy issued to any other group determined in the discretion of the Commissioner to be substantially similar to those described in this chapter.
(c) The lives of individuals insured under a group policy authorized by this subchapter may continue to be insured following termination of employment, membership, or other affiliation of the individual with the group under a portability group approved by the Commissioner, provided that the group policy complies with all the applicable requirements of this subchapter. (Added 1993, No. 55, § 9, eff. June 3, 1993; amended 2009, No. 137 (Adj. Sess.), § 7.)