J. MILLARD TAWES, Governor                     1193

debtors of one or more subsidiary corporations, and the debtors of
one or more affiliated corporations, proprietors or partnerships if
the business of the policyholder and of such affiliated corporations,
proprietors or partnerships is under common control. No debtor shall
be eligible unless the indebtedness constitutes an irrevocable obliga-
tion to repay which is binding upon him during his lifetime, at and
from the date the insurance becomes effective upon his life.

(2)   The premium for the policy shall be paid by the policyholder,
either from the creditor's funds, or from charges collected from the
insured debtors, or from both. A policy on which part or all of the
premium is to be derived from the collection from the insured debtors
of identifiable charges not required of uninsured debtors shall not
include, in the class or classes of debtors eligible for insurance, debt-
ors under obligations outstanding at its date of issue without evi-
dence of individual insurability unless at least seventy-five percent
of the then eligible debtors elect to pay the required charges. A policy
on which no part of the premium is to be derived from the collection
of such identifiable charges must insure all eligible debtors, or all
except any as to whom evidence of individual insurability is not
satisfactory to the insurer.

(3)   The policy may be issued only if the group of eligible debtors
is then receiving new entrants at the rate of at least one hundred
(100) persons yearly, or may reasonably be expected to receive at
least one hundred new entrants during the first policy year, and only
if the policy reserves to the insurer the right to require evidence of
individual insurability if less than seventy-five percent (75%) of the
new entrants become insured. The policy may exclude from the
classes eligible for insurance classes of debtors determined by age.

(4)   The amount of insurance in the life of any debtor shall at no
time exceed the amount owed by him to the creditor, or ten thousand
dollars ($10,000), whichever is less. Where the indebtedness is re-
payable in one sum to the creditor, the insurance on the life of any
debtor shall in no instance be in effect for a period in excess of
eighteen months, except that such insurance may be continued for an
additional period not exceeding six months in the case of default, ex-
tension or recasting of the loan.

(5)   The insurance shall be payable to the policyholder. Such pay-
ment shall reduce or extinguish the unpaid indebtedness of the debtor
to the extent of such payment.

424. Credit Union Groups.

The lives of a group of individuals may be insured under a policy
issued to a credit union organized pursuant to the laws of Maryland
or the Federal Credit Union Act, which shall be deemed the policy-
holder, to insure the members of the credit union, for the benefit of
persons other than the credit union or its officials, subject to the fol-
lowing requirements:

(1)   The members eligible for insurance under the policy shall be
all of the members of the credit union, or all of any class or classes
thereof determined by conditions pertaining to their age, or to mem-
bership in the credit union, or both.

(2)   The premium for the policy shall be paid by the policyholder,
either wholly from the credit union's funds, or partly from such
funds and partly from funds contributed by the insured members