Section 134. No policy of group life insurance shall be issued or delivered in the commonwealth until a copy of the form thereof has been on file for thirty days with the commissioner, unless, before the expiration of said thirty days, he shall have approved the policy in writing; nor if the commissioner notifies the company in writing, within said thirty days, that in his opinion the form of the policy does not comply with the laws of the commonwealth, specifying his reasons therefor, provided, that this action of the commissioner shall be subject to review by the supreme judicial court; nor shall any such policy be so issued or delivered unless it contains in substance the following provisions:
1. That the policy shall be incontestable after two years from its date of issue except for non-payment of premiums; and that the insurance on any person insured under the policy shall be incontestable after it has been in force for a period of two years during such person’s lifetime except for violation of the conditions of the policy relating to military or naval service in time of war.
2. That the policy, the application of the employer and the individual applications, if any, of the employees insured shall constitute the entire contract between the parties, and that no statement made by the employer or any employee or on their behalf shall be used in defence to a claim under the policy unless contained in a written application.
3. That the premium or the amount of insurance payable in the event of a misstatement of the age of an employee shall be equitably adjusted.
4. Except in the case of a policy issued under clause (c) or (f) of section one hundred and thirty-three, that the company will issue to the employer, for delivery to each employee whose life is insured under the policy, an individual certificate specifying his insurance coverage under the policy, the amount thereof and to whom payable, together with a provision to the effect that if his insurance, or any portion of it, ceases because of (1) termination of employment or of membership in the class or classes eligible for coverage under the policy, or (2) termination of the policy or amendment of the policy to terminate the insurance or any part thereof on the class of insured persons to which he then belongs after he has been insured thereunder for five or more years immediately preceding any such termination date, the employee shall continue to be insured thereafter for a period of thirty-one days, for the amount of life insurance which he is entitled to have issued to him under an individual policy in accordance with the provisions which follow; and that he shall be entitled to have issued to him by the company, without evidence of insurability, upon written application in a form satisfactory to the company and upon the payment of the premium applicable to the class of risk to which he belongs and to the form and amount of the policy at his then attained age, both within said period of thirty-one days, an individual policy of life insurance without disability or other supplementary benefits, effective at the expiration of said period, in any one of the forms of life policies then customarily issued by the company, except a term policy, for an amount not in excess of the amount of the insurance which ceases because of any such termination, or, at the option of the company, in the case of any termination described in clause (2), an amount which shall in no event exceed the lesser of (i) the amount of such employee’s insurance ceasing because of such a termination less any amount of life insurance for which he may be or may become eligible under any group policy issued by the same or another company within thirty-one days after such a termination and (ii) two thousand dollars; provided, that any amount of insurance which shall have matured on or before the date of any termination described in clause (1) or (2), as an endowment payable to him, whether in one sum or in instalments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount which is considered to cease because of any such termination; and, for the purposes of this provision, the date of termination of the policy in case of its expiration by its own terms shall be the effective date of such expiration irrespective of any grace period specified in the policy for the payment of any premium falling due on such date.
4A. In the case of a policy issued to a creditor to insure debtors of such creditor, a provision that the insurer will furnish to the policyholder for delivery to each debtor insured under the policy a form which will contain a statement that the life of the debtor is insured under the policy or in the case of a policy issued to an insurance company to insure persons granted policy loans, a provision that the policyholder will deliver to each person insured under the policy a form which will contain a statement that the life of the person granted the loan is insured, and that any death benefit paid thereunder by reason of his death shall be applied to reduce or extinguish the indebtedness or policy loan.
5. That to the group or class thereof originally insured shall be added from time to time all new employees of the employer eligible to insurance in such group or class.
6. That the employer is entitled to a grace period of thirty-one 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 employer shall have given the company written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy and, at the option of the company, a provision that the employer shall be liable to the company for the payment of a pro rata premium for the time the policy was in force during such grace period.
7. Except in the case of a policy issued under clause (c) or (f) of section one hundred and thirty-three, that any sum becoming due by reason of the death of the employee insured shall be payable to the beneficiary designated by the employee insured, that in the event no designated beneficiary as to all or any part of such sum is living at the death of the employee insured, any such sum shall be paid to the executors or administrators of the employee, and, that the company may, at its option, pay such sum to any one or more of the following surviving relatives: wife, husband, mother, father, child or children, brothers or sisters, and may pay a part of such sum not exceeding two hundred and fifty dollars to any person appearing to the company to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the employee insured.
A policy shall be deemed to contain any such provision in substance when, in the opinion of the commissioner, the provision is stated in terms more favorable to the employee, or at least as favorable to the employee and more favorable to the employer, than are herein set forth.
The word “employer” as used in this section, section one hundred and thirty-four A and section one hundred and thirty-seven shall include the trustees of a fund established as provided in clause (a) of section one hundred and thirty-three, a trade union or association of wage workers, a financial or other institution including subsidiary or affiliated institutions, a vendor of any property, an assignee of the indebtedness, an association of state, county or municipal employees, and the trustees of a fund established as provided in clause (e) of section one hundred and thirty-three, in the case of a policy issued under clause (a), (b), (c), (d) or (e), respectively, of section one hundred and thirty-three, and a charitable or religious association which meets the requirements of chapter one hundred and eighty. The word “employee”, as used in this section and section one hundred and thirty-five, shall include a member of such a trade union or other association of wage workers or of such an association of state, county or municipal employees or of a charitable or religious association which meets the requirements of chapter one hundred and eighty, and, as used in this section, shall include a borrower from such a financial or other institution including subsidiary or affiliated institutions, and a purchaser from such a vendor.
In any policy issued under subdivision (a) of section one hundred and thirty-three, the word “employees” may include the officers, managers and employees of subsidiary or affiliated corporations and the individual proprietors, partners and employees of affiliated individuals and firms, if the business of the employer and of such subsidiary or affiliated corporations, firms or individuals is under common control, through stock ownership, contract or otherwise.
Any policy issued under section one hundred and thirty-three may provide that the term “employee” shall include retired employees, and the partners or individual proprietors if an employer is a partnership or an individual proprietor, if such partners or proprietors are actively engaged in and devote a substantial part of their time to the conduct of the business of the proprietor or partnership, and if, in the case of a policy issued under subdivision (e) of section one hundred and thirty-three, the policy insures not less than an average of five persons, other than the partners or individual proprietors, per employer unit; provided, however, that so much of this paragraph as provides that a policy issued under said subdivision (e) of said section one hundred and thirty-three insure not less than an average of five persons, exclusive of partners or individual proprietors, per employer unit shall not be applicable in the case of any policy so issued covering employees of persons engaged in the business of conducting recreational or instructional summer camps for children.
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