1188                            LAWS OF MARYLAND                       [CH. 553

(1)   Insuring only individuals related by blood, marriage or legal
adoption; or

(2)   Insuring only individuals having a common interest through
ownership of a business enterprise, or a substantial legal interest or
equity therein, and who are actively engaged in the management
thereof; or

(3)   Insuring only individuals otherwise having an insurable in-
terest in each other's lives.

418. Employee Groups.

The lives of a group of individuals may be insured under a policy
issued to an employer, or to the trustees of a fund established by an
employer, which employer or trustees shall be deemed the policy-
holder, to insure employees of the employer for the benefit of persons
other than the employer, subject to the following requirements:

(1)   The employees eligible for insurance under the policy shall be
all of the employees of the employer, or all of any class or classes
thereof determined by conditions pertaining to their employment.
The policy may provide that the term "employees" shall include
the employees of one or more subsidiary corporations, and the
employees, individual proprietors, and partners of one or more
affiliated corporations, proprietors or partnerships if the business
of the employer and of such affiliated corporations, proprietors or
partnerships is under common control. The policy may provide that
the term "employees" shall include the individual proprietor or
partners if the employer is an individual proprietor or a partnership.
The policy may provide that the term "employees" shall include
retired employees. No director of a corporate employer shall be
eligible for insurance under the policy unless such person is otherwise
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.

(2)   The premium for the policy shall be paid by the policyholder,
either wholly from the employer's funds or funds contributed by him,
or partly from such funds and partly from funds contributed by the
insured employees. No policy may be issued on which the entire
premium is to be derived from funds contributed by the insured
employees. A policy on which part of the premium is to be derived
from funds contributed by the insured employees may be placed in
force only if at least seventy-five percent (75%) of the then
eligible employees, excluding any as to whom evidence of individual
insurability is not satisfactory to the insurer, elect to make the re-
quired contributions. A policy on which no part of the premium is
to be derived from funds contributed by the insured employees must
insure all eligible employees, or all except any as to whom evidence of
individual insurability is not satisfactory to the insurer.

(3)   The policy must cover at least ten (10) employees at date of
issue.

(4)   The amounts of insurance under the policy must be based
upon some plan precluding individual selection either by the em-
ployees or by the employer or trustees.