Chap. 115.—An ACT to amend and re-enact Sections 4258-h and 4258-i of the Code
of Virginia, defining group life insurance and providing standard provisions for
group life insurance policies. [H B 241]

Approved March 6, 1942

1. Be it enacted by the General Assembly of Virginia, That sec-
tions forty-two hundred and fifty-eight-h and forty-two hundred and
fifty-eight-i of the Code of Virginia be amended and re-enacted so as to
read as follows:

— Section 4258-h. Definition of group life insurance.—Group life
insurance is hereby declared to be that form of life insurance covering
not less than twenty-five employees with or without medical examination,
written under a policy issued to the employer, the premium on which is
to be paid by the employees, employer or by the employer and employees
jointly, and insuring only all of his employees, or all of any class or
classes thereof determined by conditions pertaining to the employment,
for amounts of insurance based upon some plan which will preclude
individual selection, for the benefit of persons other than the employer:
provided, however, that when the premium is to be paid by the employees
or by the employer and employee jointly and the benefits of the policy
are offered to all eligible employees, not less than seventy-five per centum
of such employees may be so insured.

The following forms of life insurance are hereby declared to be
group life insurance within the meaning of this section: (a) life insur-
ance covering the members of one or more companies, batteries, troops,
or other units of the national guard, of any state or the District of Co-
lumbia, written under a policy issued to the commanding general of the
national guard, who shall be deemed to be the employer for the purposes
of this section, the premium on which is to be paid by the members of
such units for the benefits of persons other than the employer ; provided,
however, that when the benefits of the policy are offered to all eligible
members of a unit of the national guard,.not less than seventy-five per
centum of the members of such a unit may be so insured; (b) life insur-
ance covering the members of one or more troops or other units of Fed-
eral, State, or municipal troopers or Federal, State, or municipal police
of any state, written under a policy issued to the commanding officer of
the Federal, State, or municipal troopers or Federal, State or municipal
police, who shall be deemed to be the employer for the purposes of this
section, the premium on which is to be paid by the members of such units
for the benefit of persons other than the employer; provided, however,
that when the benefits of the policy are offered to all eligible members of
a unit of the Federal, State, or municipal troopers or Federal, State, or
municipal police not less than seventy-five per centum of the members of
such unit may be so insured; (c) life insurance covering not less than
fifty employees of the Federal, State or a municipal government or of
any department thereof, or of any Federal, State, or municipal bureau,
board, commission or institution, with or without medical examination,
written under a policy issued to the Governor of the State, or to the head
of any Federal, State, or municipal department, bureau, board, commis-
sion, or institution, as the case may be, the premium on which is to be
paid by the employees and insuring only all employees, or all of any class
or classes thereof determined by conditions pertaining to the employment,
for amounts of insurance based upon some plan which will preclude indi-
vidual selection, for the benefit of persons other than the employer ; pro-
vided, that when the benefits of the policy are offered to all eligible
employees, not less than seventy-five per centum of such employees may
be so insured; (d) life insurance covering the members of any labor
union, written under a policy issued to such union which shall be deemed
to be the employer for the purpose of this section, the premium on which
is to be paid by the union or by the union and its members, jointly, and
insuring only all of its members who are actively engaged in the same
occupation, for amounts of insurance based upon some plan which will
preclude individual selection, for the benefit of persons other than the
union or its officials; provided, however, that when the premium is to be
paid by the union and its members jointly and the benefits are offered to
all eligible members, not less than seventy-five per centum of such mem-
bers may be so insured ; provided further, that when members apply and
cH. 115] ACTS OF ASSEMBLY 153

pay for additional amounts of insurance a smaller percentage of members
may be insured for such additional amounts if they pass satisfactory
medical examinations; (e) life insurance covering the members of any
voluntary association of employees of one employer, written under a
policy issued to such association which shall be deemed to be the em-
ployer for the purpose of this section, the premium on which shall be paid
by the association, and insuring a portion or all of its members for
amounts of insurance based upon some plan which shall preclude indi-
vidual selection, for the benefit of persons other than the employer ; pro-
vided, however, such members may obtain additional insurance through
such association if they furnish evidence of insurability satisfactory to the
life insurance company; (f) life insurance issued to a creditor or vendor,
who or which shall be deemed to be the policyholder and for the purpose
of this section the employer, insuring only all of the members, or only all
of the members except those as to whom the evidence of insurability sub-
mitted is not satisfactory to the insurer, of a group of debtors or vendees,
defined as follows: all of the borrowers, or borrowers and guarantors of
borrowers, from one financial or other institution or from such institution
and its subsidiary or affiliated companies, or all of the purchasers of
securities, merchandise or other property from one vendor, or all of any
class or classes of such debtors or purchasers determined by conditions
pertaining to the type of indebtedness or purchase, under agreements by
such debtors or such purchasers for the payment of the sum borrowed or
the balance of the purchase price, as the case may be, in instalments over
a period of not more than ten years; when the premium, or any part
thereof, for such insurance is to be paid, either directly or indirect'y, by
the insured debtors, guarantors or debtors or vendees and the benefits of
the policy are offered to all eligible debtors, guarantors of debtors or
vendees, not less than seventy-five per centum of such debtors, guarantors
of debtors or vendees may be so insured; no such group shall be eligible
for insurance hereunder unless the new entrants to such group number
at least one hundred persons annually; such policy may be issued to an
assignee to whom such creditor or vendor has transferred or agreed to
transfer all of its right, title, and interest to the unpaid indebtedness, or
to the unpaid purchase price, under all such agreements made by it; the
amount of insurance thereunder on any person insured shall not at any
time exceed the amount of unpaid indebtedness due from such person or
the amount of the purchase price unpaid by such person, nor the sum of
ten thousand dollars, whichever is less; the premiums on such insurance
shall be remitted by the policyholder to the insurer; the benefits thereof
shall be payable to the policyholder, and the receipt of such benefits by
the policyholder shall release the insurer from all obligations under the
policy to the extent of the benefits so paid; the amount of any death
benefit received by the policyholder thereunder shall be applied by the
policyholder to the discharge of any obligation of the person insured, or
his personal representatives, to the policyholder.

~ Section 4258-i. Standard provisions for policies of group life insur-
ance—No policy of group life insurance shall be issued or delivered in
this State-unless and until a-copy of the form thereof has been filed with
the State Corporation Commission and formally approved by it ; nor shall
a policy be so issued or delivered unless it contains in substance the
following provisions : .

First. A provision that the policy shall be incontestable after one
year from its date of issue, except in case the insured shall within two
years from the date of the policy die by suicide whether sane or insane,
and except for non-payment of premiums and except for violation of the
conditions of the policy requiring the payment of additional premium in
the event of military or naval service in time of war.

_ Second. A provision that the policy, the application of the em-
ployer, and the individual applications, if any, of the employees insured
shall constitute the entire contract between the parties, and that all state-
ments made by the employer or by the individual employees shall, in the
absence of fraud, be deemed representations and not warranties, and that
no such statement shall be used in defense to a claim under the policy,
unless it is contained in a written application. er ee ee
Third. <A provision for the equitable adjustment of the premium or
the amount of insurance payable in the event of a misstatement of the age
of an employee. et wm
Fourth. <A provision that the company will issue to the employer
for delivery to the employee, whose life is insured under such policy, an
individual certificate setting forth a statement as to the insurance pro-
tection to which he is entitled, to whom payable, together with provisions
to the effect that in case of the termination of the employment for any
reason whatsoever the employee shall be entitled to have issued to. him by
the company, without evidence of insurability, and upon application made
to the company within thirty-one days after such termination and upon
the payment of the premium applicable to the class of risk to which he
belongs and to the form and amount of the policy at his then attained age,
a policy of life insurance in any one of the forms customarily issued by
the company, except term insurance, in an amount equal to the amount
of his protection under such group insurance policy at the time of such
termination. This provision shall not be required in policies described in
subdivision (f) of section forty-two hundred and fifty-eight-h.

Fifth. A provision that all new employees of the employer or all
new members of the labor union, or other association or group as defined
in this section or in section forty-two hundred and fifty-eight-h or all new
debtors of the vendor or creditor, as the case may be, in the groups or
classes eligible for such insurance must be added to such groups or
classes for which they are respectively eligible. .

Except as provided in this chapter it shall be unlawful to make a
contract of life insurance covering a group in this State. |

Policies of group life insurance, when issued for delivery in this
State by any company not organized under the laws of this State may
contain, when issued, any provisions required by the law of the state
or territory or district of the United States under which the company is
organized ; and policies issued for delivery in other states or countries by
companies organized in this State may contain any provision required by
the laws of the district, territory, state, or country in which the same are
cH. 116] | ACTS. OF. ASSEMBLY 155

issued, anything in this section to the contrary notwithstanding. Any
policy of group life insurance may be issued for delivery in this State
which in the opinion of the State Corporation Commission contains pro-
visions:on any one or more of the several foregoing requirements more
favorable to the employer or to the employee than hereinbefore required.

2. .An emergency existing, this act shall be in force from its passage.