2019 -- H 6184 SUBSTITUTE A AS AMENDED

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LC002568/SUB A/2

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO INSURANCE -- LIFE INSURANCE POLICIES AND RESERVES

     Introduced By: Representatives Caldwell, Speakman, Mendez, Vella-Wilkinson, and

     Date Introduced: June 05, 2019

     Referred To: House Health, Education & Welfare

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 27-4 of the General Laws entitled "Life Insurance Policies and

Reserves" is hereby amended by adding thereto the following section:

     27-4-1.1. Denial of applicant based on naloxone prescription.

     (a) No life insurance company organized or doing business within this state shall:

     (1) Deny the application of an individual seeking coverage for any life insurance policy

pursuant to this chapter solely on the basis that the applicant has a prescription to carry or possess

the drug naloxone;

     (2) Otherwise discriminate in the offering, issuance, cancellation, amount of coverage,

price or any other condition of a life insurance policy based solely and without any additional

actuarial justification upon the fact that an individual has been issued a prescription for naloxone

or has purchased naloxone.

     (b) Any denial of insurance coverage in violation of the provisions of this section:

     (i) Shall be void;

     (ii) The insurer shall reopen the application and underwriting process for consideration of

coverage and the life insurance company shall be deemed to have provided coverage to the

eligible person retroactive to the date of the initial application.

     SECTION 2. Section 27-4.8-1 of the General Laws in Chapter 27-4.8 entitled "Group

Life Insurance" is hereby amended to read as follows:

     27-4.8-1. Group life insurance definitions.

     Except as provided in 27-4.8-2, no policy of group life insurance shall be delivered in this

state unless it conforms to one of the following descriptions:

     (1) 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:

     (i) 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

"employees" shall include 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 the affiliated corporations,

proprietorships or partnerships is under common control. The policy may provide that the term

"employees" shall include the individual proprietor or partners if the employer is an individual

proprietorship or partnership. The policy may provide that the term "employees" may include

retired employees, former employees and directors of a corporate employer. A policy issued to

insure the employees of a public body may provide that the term "employees" shall include

elected or appointed officials.

     (ii) The premium for the policy shall be paid either from the employer's funds or from

funds contributed by the insured employees, or from both. Except as provided in paragraph (iii), a

policy on which no part of the premium is to be derived from funds contributed by the insured

employees shall insure all eligible employees, except those who reject the coverage in writing.

     (iii) An insurer may exclude or limit the coverage on any person as to whom evidence of

individual insurability is not satisfactory to the insurer; provided, however, that any exclusion or

limitation shall not be based solely on the fact that the person has a prescription to carry or

possess the drug naloxone.

     (2) A policy issued to a creditor or its parent holding company or to a trustee or trustees

or agent designated by two (2) 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:

     (i) 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

"debtors" shall include:

     (A) Borrowers of money or purchasers or lessees of goods, services or property for which

payment is arranged through a credit transaction;

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     (B) The debtors of one or more subsidiary corporations; and

     (C) The debtors of one or more affiliated corporations, proprietorships or partnerships if

the business of the policyholder and of the affiliated corporations, proprietorships or partnerships

is under common control.

     (ii) The premium for the policy shall be paid either from the creditor's finds, or from

charges collected from the insured debtors, or from both. Except as provided in paragraph (3), a

policy on which no part of the premium is to be derived from the funds contributed by insured

debtors specifically for their insurance shall insure all eligible debtors.

     (iii) An insurer may exclude any debtors as to whom evidence of individual insurability is

not satisfactory to the insurer; provided, however, that any exclusion shall not be based solely on

the fact that the person has a prescription to carry or possess the drug naloxone.

     (iv) 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, except that

insurance written in connection with open-end credit having a credit limit exceeding ten-thousand

dollars ($10,000) may be in an amount not exceeding the credit limit.

     (v) The insurance may be payable to the creditor or any successor to the right, title, and

interest of the creditor. The payment shall reduce or extinguish the unpaid indebtedness of the

debtor to the extent of the payment and any excess of the insurance shall be payable to the estate

of the insured.

     (vi) Notwithstanding the provisions of the above subsections, insurance on agricultural

non-decreasing 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.

     (3) A policy issued to a labor union, or similar employee organization, which shall be

deemed to be the policyholder, to insure members of the 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:

     (i) 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.

     (ii) 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 paragraph (iii), a policy on which no part of the premium is

to be derived from funds contributed by the insured members specifically for their insurance shall

insure all eligible members, except those who reject the coverage in writing.

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     (iii) An insurer may exclude or limit the coverage on any persons to whom evidence of

individual insurability is not satisfactory to the insurer; provided, however, that any exclusion or

limitation shall not be based solely on the fact that the person has a prescription to carry or

possess the drug naloxone.

     (4) A policy issued to a trust or to the trustees of a fund established or adopted by two (2)

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 person other than the employers or the unions or

organizations, subject to the following requirements:

     (i) 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" shall include 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 the affiliated

corporations, proprietorships or partnerships is under common control. The policy may provide

that the term "employees" shall include the individual proprietor or partners if the employer is an

individual proprietorship or partnership. The policy may provide that the term "employees" shall

include retired employees, former employees and directors of a corporate employer. The policy

may provide that the term "employees" shall include the trustees or their employees, or both, if

their duties are principally connected with the trusteeship.

     (ii) 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 paragraph (iii),

a policy on which no part of the premium is to be derived from funds contributed by the insured

persons specifically for their insurance shall insure all eligible persons, except those who reject

the coverage in writing.

     (iii) An insurer may exclude or limit the coverage on any person as to whom evidence of

individual insurability is not satisfactory to the insurer; provided, however, that any exclusion or

limitation shall not be based solely on the fact that the person has a prescription to carry or

possess the drug naloxone.

     (5) 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

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associations shall have at the outset a minimum of one hundred (100) persons; shall have been

organized and maintained in good faith for purposes other than that obtaining insurance; shall

have been in active existence for at least two (2) years; and shall have a constitution and by-laws

which provides 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. The policy shall be subject to the following requirements:

     (A) The policy may insure members of the 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'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 paragraph (D), a policy on which no part of the premium is to

be derived from funds contributed by the covered persons specifically for the insurance shall

insure all eligible persons, except those who reject the 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; provided, however, that any exclusion or

limitation shall not be based solely on the fact that the person has a prescription to carry or

possess the drug naloxone.

     (6) A policy issued to a credit union or to a trustee or trustees or agent designated by two

(2) or more credit unions, which credit union, trustee, trustees, or agent shall be deemed

policyholder, to insure members of the 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:

     (i) 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.

     (ii) The premium for the policy shall be paid by the policyholder from the credit union's

funds and, except as provided in paragraph (iii), shall insure all eligible members.

     (iii) An insurer may exclude or limit the coverage on any member as to whom evidence

of individual insurability is not satisfactory to the insurer; provided, however, that any exclusion

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or limitation shall not be based solely on the fact that the person has a prescription to carry or

possess the drug naloxone.

     SECTION 3. This act shall take effect upon passage and shall apply to any application for

life insurance filed on or after the effective date of this act.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- LIFE INSURANCE POLICIES AND RESERVES

***

     This act would prohibit a denial or limitation of coverage or an increase in insurance

premiums under a life insurance policy based on the fact that an individual has been issued a

prescription for naloxone or has purchased naloxone. A denial of insurance policy coverage in

violation of this act would be void as violation of public policy.

     This act would take effect upon passage and shall apply to any application for life

insurance filed on or after the effective date of this act

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