Bill Text: NJ A2893 | 2010-2011 | Regular Session | Introduced
Bill Title: Codifies federal law notice, consent, and other requirements concerning certain employer-owned group life insurance contracts.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-06-14 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [A2893 Detail]
Download: New_Jersey-2010-A2893-Introduced.html
Sponsored by:
Assemblywoman VALERIE VAINIERI HUTTLE
District 37 (Bergen)
SYNOPSIS
Codifies federal law notice, consent, and other requirements concerning certain employer-owned group life insurance contracts.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain employer-owned group life insurance and supplementing P.L.2005, c.190 (C.17B:27-68 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. With respect to any group life insurance provided under an employer-owned life insurance policy to insure employees of the employer, as described in subsection (j) of section 101 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.101):
a. A policy shall not be delivered or issued for delivery in this State on or after the effective date of this section unless it is delivered or issued in compliance with the provisions of subsection (j) of section 101 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.101), in order to declare any death benefit proceeds under the policy as excluded from the employer's gross income, including any required notice to, and consent of, the insured under the policy.
b. (1) Notwithstanding any notice previously provided to an insured in accordance with the provisions of subsection (j) of section 101 of the federal Internal Revenue Code (26 U.S.C. s.101), an insurer shall provide notice to an insured of any existing policy issued or delivered in this State that is in effect on the effective date of this section, regardless of the initial date of issuance or delivery. The notice shall be provided to each insured under the policy within 90 days of the effective date of this section.
(2) This subsection shall not be construed to require any manner of consent by the insured with respect to the continuation of any existing policy.
2. This act shall take effect immediately.
STATEMENT
This bill codifies in State statute federal requirements concerning employer-owned group life insurance (EOLIs), as described in subsection (j) of section 101 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.101), expressly making these requirements applicable to any policy delivered or issued for delivery in this State. The requirements include notice and consent concerning the coverage of employees, directed to each prospective employee-insured as follows: 1) notice in writing to the employee that the employer intends to insure the employee's life, and the maximum face amount for which the employee could be insured at the time of issuance of the policy; 2) consent in writing by the employee to being insured under the policy, and to the continuation of coverage following the employee's termination of employment with the employer; and 3) notice in writing that the employer will be a beneficiary of the proceeds payable upon the employee's death.
The bill additionally requires that an insurer shall provide notice to every employee-insured under any existing EOLI already issued or delivered in this State that is in effect on the effective date of the bill, regardless of any notice previously provided to an insured in accordance with the federal law. The notice shall be provided to each employee-insured under the policy within 90 days of this effective date.
