HF 2997

as introduced - 87th Legislature (2011 - 2012) Posted on 04/05/2012 09:27am

A bill for an act
relating to life insurance; modifying provisions related to preneed group life
insurance and graded death benefits provided on preneed policies; amending
Minnesota Statutes 2010, sections 60A.02, subdivision 28; 72A.207.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 60A.02, subdivision 28, is amended to
read:

Subd. 28.

Group insurance.

"Group insurance" means that form of insurance
coverage sponsored by new text begin , or issued to new text end :

(1) an employer covering not less than two employees and which may include the
employees' dependents, consisting of husband, wife, children, and actual dependents
residing in the household, written under a master policy issued to any employer, or group
of employers who have joined into an arrangement for the purposes of providing the
employees insurance for their individual benefit. Employees' dependents, consisting of
husband, wife, children, and actual dependents residing in the same household, are not
employees for purposes of this definition except for a spouse employed on a regular
full-time basis by the same employer. This clause does not apply to chapter 62L;

(2) an association to provide insurance to its members; deleted text begin or
deleted text end

(3) a creditor to provide life insurance to insure its debtors in connection with
real estate mortgage loans, in an amount not to exceed the actual or scheduled amount
of their indebtedness deleted text begin . deleted text end new text begin ; or
new text end

new text begin (4) a trust, including a trust established by the insurance company, for a group of
individuals for the payment of future funeral expenses.
new text end

Sec. 2.

Minnesota Statutes 2010, section 72A.207, is amended to read:

72A.207 GRADED DEATH BENEFITS.

For the purpose of this section, a graded death benefit is a provision within a life
insurance policy in which the death benefit, in the early years of the policy, is less than the
face amount of the policy, but which increases with the passage of time.

No policy of life insurance paying a graded death benefit may be issued in this state
unless new text begin , during any period in which the benefit is graded or reduced, new text end the graded death
benefit is equal to deleted text begin at least four times the first year premium deleted text end new text begin or greater than the premiums
paid new text end . This section does not prohibit the return of premiums or premiums plus interest in
connection with the voluntary or judicially ordered rescission of the policy, or according
to the terms of the exclusions from coverage for suicide, aviation, or war risk.