I move that Senate Bill 233 be amended to read as follows:
Replace the effective dates in SECTIONS 1 through 3 with
"[EFFECTIVE UPON PASSAGE]".
favorable to the policyholder;
than the provisions set forth in subsection (b).
(b) The provisions referred to in subsection (a)(1) are as follows:
(1) A provision that the policyholder is entitled to a grace period of thirty-one (31) days for the payment of any premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder has given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder is liable to the insurer for the payment of a pro rata premium for the time the policy was in force during the grace period.
(2) A provision that the validity of the policy may not be contested
except for nonpayment of premiums, after the policy
has been in force for two (2) years after its date of issue, and that
no statement made by a person insured under the policy relating
to the person's insurability may be used in contesting the validity
of the insurance with respect to which the statement was made,
unless: except as provided in clause (A), (B), (C), or (D):
the insurance has not been in force for a period of two (2)
years or longer during the person's lifetime; or The validity of
a policy may be contested at any time for nonpayment of
the statement is contained in a written instrument signed
by the insured person. The validity of a policy may be
contested based on a statement made by a person insured
under the policy that relates to the person's insurability if:
(i) the statement is set forth in a written instrument signed by the insured; and
(ii) the policy has not been in force for two (2) years after the date of issue.
(C) The validity of a policy may be contested based on a statement made by a person insured under the policy that relates to the person's insurability if:
(i) the policy has not been in force for at least two (2) years during the person's lifetime; and
(ii) the policy has not been in force for two (2) years after its date of issue.
(D) The validity of a policy that is part of a viatical settlement contract (as defined in IC 27-8-19.8-6) may be contested on the grounds of fraud in connection with an application for life insurance benefits under the policy until the policy has been in force for six (6) years after the date of issue.
However, a provision under this subdivision may not preclude the assertion at any time of defenses based upon provisions in the policy that relate to eligibility for coverage.
coverage under the policy, the person or dependent is entitled,
without evidence of insurability, to an individual policy of life
insurance issued to the person or dependent by the insurer without
disability or other supplementary benefits, provided that an
application for the individual policy is made and that the first
premium is paid to the insurer within thirty-one (31) days after the
termination, and provided further that:
(A) the individual policy must, at the option of the person or dependent, be on any one (1) of the forms then customarily issued by the insurer at the age and for the amount applied for, except that the group policy may exclude the option to elect term insurance;
(B) the individual policy must be in an amount not in excess of the amount of life insurance that ceases because of the termination, less the amount of any life insurance for which the person or dependent becomes eligible under the same policy or any other group policy within thirty-one (31) days after the termination (however, any amount of insurance that has matured on or before the date of the termination as an endowment payable to the person insured, whether in one (1) sum, in installments, or in the form of an annuity, may not, for the purposes of this clause, be included in the amount of insurance that is considered to cease because of the termination); and
(C) the premium on the individual policy must be at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which the person or dependent then belongs, and to the individual age attained by the person or dependent on the effective date of the individual policy.
Subject to the conditions set forth in this subdivision, the conversion privilege created by this subdivision must be available to a surviving dependent of a person covered under a group policy, with respect to the coverage under the group policy that terminates by reason of the death of the person covered, and to the dependent of an employee or member after termination of the coverage of the dependent because the dependent ceases to be a qualified family member under the group policy, while the employee or member remains insured under the group policy.
(9) A provision that if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured under the policy at the date of the termination whose insurance terminates, including the insured dependent of a covered person, and who has been so insured for at least five (5) years before the termination date, is entitled to have issued by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided in
subdivision (8), except that the group policy may provide that the
amount of the individual policy may not exceed the lesser of:
(A) the amount of the person's life insurance protection that is ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which the person is eligible or becomes eligible under a group policy issued or reinstated by the same insurer or another insurer within thirty-one (31) days after the termination; or
(B) ten thousand dollars ($10,000).
(10) A provision that if a person insured under the group policy, or the insured dependent of a covered person, dies during the period within which the covered person or dependent would have been entitled to have an individual policy issued under subdivision (8) or (9) or before such an individual policy becomes effective, the amount of life insurance that the covered person or dependent would have been entitled to have issued under an individual policy is payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium for the individual policy has been made.
(11) If active employment is a condition of insurance, a provision that an insured may continue coverage during the insured's total disability by timely payment to the policyholder of that portion, if any, of the premium that would have been required for the insured had total disability not occurred. The continuation of coverage under this subdivision on a premium paying basis must extend for a period of six (6) months from the date on which the total disability started, but not beyond the earlier of:
(A) the date of approval by the insurer of continuation of the coverage under any disability provision that the group insurance policy may contain; or
(B) the date of discontinuance of the group insurance policy.
(12) In the case of a policy insuring the lives of debtors, a provision that the insurer will furnish to the policyholder, for delivery to each debtor insured under the policy, a certificate of insurance describing the coverage and specifying that the death benefit will first be applied to reduce or extinguish the indebtedness.
(c) Subsections (b)(6) through (b)(11) do not apply to policies insuring the lives of debtors. The standard provisions required under
IC 27-1-12 this chapter for individual life insurance policies do not
apply to group life insurance policies.
(d) If a group life insurance policy is on a plan of insurance other than the group plan, it must contain a nonforfeiture provision that, in the opinion of the commissioner, is equitable to the insured persons and to the policyholder. However, group life insurance policies need not contain the same nonforfeiture provisions as are required for
individual life insurance policies under
IC 27-1-12 this chapter.".