18 Del. Admin. Code § 1211-4.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 1211-4.0 - Corporate Owned Life Insurance

4.1 In the case of an insurance policy issued to a corporation insuring the life of any active employee or retiree of such corporation who is a participant, or is eligible to participate in a welfare plan, the policy may be issued, without the consent of the insured, only if:

4.1.1 The corporation offers to its employees and retirees eligible to participate, a wellness plan which provides discounts on health care benefits, either in the form of a reduction in premiums assessed against each participant or an enhancement of the benefits available to each participant; and

4.1.2 The corporation provides the following statement to the carrier: "At the time coverage is issued, the total amount of insurance coverage issued to date to the corporation or trust under the authority of 18 Del.C., § 2704(c)(3) shall not exceed the cost of employee and/or retiree benefits already incurred in connection with such welfare benefit plan since the earliest date coverage on any employee or retiree was issued under this subsection, plus the projected future cost of such benefits as established as of the close of the employer's last fiscal year, plus the projected cost of the coverage issued to the employer or trust under the authority of 18 Del.C. § 2704(c)(3)."

The insurer may rely upon information concerning the plan provided by a corporation purchasing such a policy in determining that a wellness plan satisfies the criteria of this section and is established and operating for the benefit of employees pursuant to ERISA. The plan shall be submitted to the Commissioner within 30 days of issuance of the policy, and if the Commissioner has not disapproved the plan within 60 days, the plan shall be deemed approved.

For purposes of applying this section, the retiree upon whom a life or health insurance contract has been or is to be made or effectuated shall be deemed to have consented thereto where:

4.1.2.1 The insurer issuing coverage pursuant to 18 Del.C. § 2708(4) gives to the retiree, at his or her last known address as contained in the records of the employer, written notice which describes the retiree's rights under this section in substantially the form annexed to this regulation as Form I or as may otherwise be approved by the Commissioner; and

4.1.2.2 Within 30 days of the date of the written notice, the insured does not receive written notice from the retiree that he or she rejects such coverage. If timely written notice of rejection is received by the insurer before such insurance has become effectuated, coverage shall not be issued. If timely written notice is received by the insurer after such insurance has been effectuated, coverage shall be terminated and the insurer shall pay the proceeds which are payable as a result of the termination of coverage to the employer or trust, in accordance with the terms and conditions of such coverage. Unless the retiree complies with the requirements of this section, neither the retiree nor his or her successor in interest may contest the validity of the coverage.

18 Del. Admin. Code § 1211-4.0