TITLE 27
Insurance

CHAPTER 27-4
Life Insurance Policies and Reserves

SECTION 27-4-22.1


§ 27-4-22.1 Continuation of group life insurance – Labor disputes – Involuntary layoffs.

(a) No group life insurance policy shall be issued or delivered in this state where the premium or any part of the premium is paid or is to be paid in whole or in part by an employer pursuant to the terms of a collective bargaining agreement unless the policy provides that in the event of a cessation of work by the employees covered by the policy as the result of a labor dispute or involuntary layoff, the policy, upon timely payment of the premium, shall continue in effect with respect to all employees insured by the policy on the date of the cessation of work who continue to pay their individual contribution and who assume and pay the contribution from the employer, for the period of cessation of work, under the following conditions:

(1) If the policyholder is not a trustee or the trustees of a fund established or maintained in whole or in part by the employer, the policy shall provide that the employee's individual contribution shall be the rate in the policy, on the date cessation of work occurs, applicable to an individual in the class to which the employee belongs as set forth in the policy;

(2) If the policyholder is a trustee or the trustees of a fund established or maintained in whole or in part by the employer, the employee's contribution shall be the amount which he or she and the employer would have been required to contribute to the trust for the employee if (i) the cessation of work had not occurred and (ii) the agreement requiring the employer to make contributions to the trust were in full force;

(3) The policy may provide that the continuation of insurance is contingent upon the collection of individual contributions by the union or unions representing the employees for policies referred to in subdivision (a)(1), and by the policyholder or the policyholder's agent with respect to policies referred to in subdivision (a)(2);

(4) The policy may provide that the continuation of insurance on each employee is contingent upon timely payment of contributions by the individual and timely payment of the premium by the entity responsible for collecting the individual contributions;

(5) The policy may provide that each individual premium rate shall be increased by an amount up to six percent (6%) of the premium rate of that shown in the policy during the cessation of work in order to cover increased administrative costs and increased mortality and morbidity. If the policy does provide for an increase, this shall have the effect of increasing the employee's contribution by a similar percent;

(6) Nothing in this section shall be deemed to limit any right which the insurer may have in accordance with the terms of the policy to increase or decrease the premium rates before, during, or after a cessation of work if, in fact, the insurer would have had the right to increase the premium rate had the cessation of work not occurred. If this premium rate change is made, it shall be effective, notwithstanding any other provisions of this section, on a date the insurer shall determine in accordance with the terms of the policy;

(7) The policy may provide that, if a premium is unpaid at the date of cessation of work and the premium became due prior to the cessation of work, the continuation of insurance is contingent upon payment of the premium prior to the date the next premium becomes due under the terms of the policy; and

(8) Nothing contained in this section shall be deemed to require continuation of any group life insurance policy unless or until the greater of (i) one hundred (100) employees and (ii) at least fifty-one percent (51%) of the employees in the group eligible to continue the coverage under this section satisfy all of the requirements to do so.

(b) No individual employee shall be eligible to continue coverage under this section after he or she becomes employed full time with the same or any other employer.

History of Section.
(P.L. 1992, ch. 167, § 1.)