Ch. 11

1996 LAWS OF MARYLAND

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 433.

Defined terms: "Insurance" § 1-101
"Insurer" § 1-101
"Life insurance" § 1-101
"Person" § 1-101
"Policy" § 1-101

17-309. CONVERSION OF GROUP POLICY — TERMINATION OF ELIGIBILITY.

(A)     IN GENERAL.

EACH POLICY OF GROUP LIFE INSURANCE SHALL CONTAIN A PROVISION THAT
IF THE INSURANCE OR ANY PART OF IT ON AN INSURED CEASES UNDER THE POLICY
BECAUSE OF TERMINATION OF EMPLOYMENT OR MEMBERSHIP IN THE CLASS OR
CLASSES ELIGIBLE FOR COVERAGE UNDER THE POLICY, THE INSURED IS ENTITLED
TO HAVE ISSUED BY THE INSURER, WITHOUT EVIDENCE OF INSURABILITY, AN
INDIVIDUAL POLICY OF LIFE INSURANCE WITHOUT DISABILITY OR. OTHER
SUPPLEMENTARY BENEFITS, SUBJECT TO THE FOLLOWING CONDITIONS:

(1)      APPLICATION FOR THE POLICY MUST BE MADE AND THE FIRST
PREMIUM MUST BE PAID TO THE INSURER WITHIN 31' DAYS AFTER THE
TERMINATION OF EMPLOYMENT OR MEMBERSHIP;

(2)      THE INDIVIDUAL POLICY IS, AT THE OPTION OF THE INSURED, ON
ANY FORM, EXCEPT TERM INSURANCE, CUSTOMARILY ISSUED BY THE INSURER AT
THE AGE AND FOR THE AMOUNT APPLIED FOR;

(3)      THE INDIVIDUAL POLICY IS IN AN AMOUNT' THAT DOES. NOT
EXCEED THE AMOUNT OF LIFE INSURANCE THAT CEASES BECAUSE OF THE
TERMINATION OF EMPLOYMENT OR MEMBERSHIP, LESS THE AMOUNT OF LIFE
INSURANCE FOR WHICH THE INSURED IS ELIGIBLE UNDER THE SAME OR ANOTHER
GROUP POLICY WITHIN 31 DAYS AFTER THE TERMINATION OF EMPLOYMENT OR
MEMBERSHIP; AND

(4)      THE PREMIUM ON THE INDIVIDUAL POLICY IS AT THE INSURER'S
CUSTOMARY RATE APPLICABLE TO:

(I)       THE FORM AND AMOUNT OF THE INDIVIDUAL POLICY;

(II)     THE CLASS OF RISK TO WHICH THE INSURED BELONGS; AND

(III)    THE AGE OF THE INSURED ATTAINED ON THE EFFECTIVE
DATE OF THE INDIVIDUAL POLICY.

(B)     ENDOWMENTS.

FOR PURPOSES OF SUBSECTION (A)(3) OF THIS SECTION, INSURANCE THAT
MATURES ON OR BEFORE THE DATE OF THE TERMINATION OF EMPLOYMENT OR
MEMBERSHIP AS AN ENDOWMENT PAYABLE TO THE INSURED, WHETHER IN ONE
SUM, IN INSTALLMENTS, OR IN THE FORM OF AN ANNUITY, MAY NOT BE INCLUDED

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