THEODORE R. McKELDIN, GOVERNOR                   1027

(4) A policy issued to the trustees of a fund established by two
or more employers in the same industry or by one or more labor
unions, or by one or more employers and one or more labor unions,
which trustees shall be deemed the policyholder, to insure employees
of the employers or members of the unions for the benefit of persons
other than the employers or the unions, subject to the following
requirements:

(a)   The persons eligible for insurance shall be all of the employees
of the employers or all of the members of the unions, or all of any
class or classes thereof determined by conditions pertaining to their
employment, or to membership in the unions, or to both. The policy
may provide that the term "employees" shall include retired employ-
ees and the individual proprietor or partners if an employer is an
individual proprietor or partnership. No director of a corporate em-
ployer shall be eligible for insurance under the policy unless such
person is othenvise eligible as a bona fide employee of the corporation
by performing services other than the usual duties of a director. No
individual proprietor or partner shall be eligible for insurance under
the policy unless he is actively engaged in and devotes a substantial
part of his time to the conduct of the business of the proprietor or
partnership. The policy may provide that the term "employees" shall
include the trustees or their employees or both, if their duties are
principally connected with such trusteeship.

(b)   The premium for the policy shall be paid by the trustees
wholly from funds contributed by the employer or employers of the
insured persons, or by the union or unions, or by both, or except in
the case of a policy issued to the trustee of a fund established wholly
by two or more employers, partly from such funds and partly from
funds contributed by the insured persons. No policy may be issued
to the trustees of a fund established wholly by two or more employers,
on which any part of the premium is to be derived from funds con-
tributed by the insured persons specifically for their insurance. A
policy on which part of the premium is to be derived from funds con-
tributed by the insured persons specifically for their insurance may
be placed in force only if at least 75% of the then eligible persons,
excluding any as to whom evidence of insurability is not satsifactory
to the insurer, elect to make the required contributions. A policy on
which no part of the premium is to be derived from funds contributed
by the insured persons specifically for their insurance must insure all
eligible persons, or all except any as to whom evidence of individual
insurability is not satisfactory to the insurer.

(c)  The policy must cover at date of issue at least one hundred
persons and not less than an average of five persons other than in-
dividual proprietors or partners, per employer unit; and if the fund
is established by the members of an association of employers the
policy may be issued only if:

(i) Either

(A)  The participating employers constitute at date of issue at
least 60% of those employer members whose employees are not al-
ready covered for group life insurance, or

(B)  The total number of persons covered at date of isue exceeds
six hundred; and

(ii) The policy shall not require that, if a participating employer